Some banks conducting an analysis of the creditworthiness of an enterprise applying for a long-term investment or mortgage loan take into account the issues of climate change, if these changes may affect the business profitability of a specific lending business venture. For example, in the case of a hotel application for a long-term investment loan operating on the sea, the level of which can rise and flood the hotel area.
Another example is a hotel located in the mountains, where winter sports tourists come. Climate change predictions may indicate that 10 years of snow will no longer be the place where this hotel in the mountains provides its services. Therefore, the bank may not grant credit due to the forecasted secondary effects of progressive climate changes and, above all, the rising average temperature.
On the other hand, companies are developing which produce components for new power plants producing electricity as part of renewable energy sources, produce electric car equipment components, e.g. electric motors, batteries, etc. More and more innovative startups are being produced as part of cooperation with large enterprises and renewable energy plants Wind turbine type subassemblies, charging devices for electric cars, etc. Other companies manufacture packaging from recycled materials, recycled or from biodegradable materials.
Other companies are developing innovative solutions for automatic sorting of rubbish. If eco-friendly products become popular and the state creates good institutional, legal and financial conditions for the development of such projects, then the process of implementing sustainable green economy based on the green economy concept will be implemented more quickly and business probes will become more and more profitable. Financial institutions, including banks, will gradually take into consideration eco-friendly processes and business activities of clients in concluded financial transactions.
Do you agree with me on the above matter?
In the context of the above issues, I am asking you the following question:
Are there banks and / or companies that take into account forecasted climate changes in their business decisions?
Please reply
I invite you to the discussion
Thank you very much
Best wishes
Yes, mainly investment in agricultural area become more and more risky if no insurance, but insurance price also.
Reinsurance companies are doing that profoundly and exactly, like Munich RE, for example.
Yes, mainly investment in agricultural area become more and more risky if no insurance, but insurance price also.
Yes mreinsurance companies in accedent of ships during bad weather so many companies which has fleet need to weather forecasting to protect work
Dear Colleagues and Friends from RG,
In the context of the above discussion, I propose to add to our considerations the following important issue:
Improving forecasting of complex natural processes and climate change through the use of ICT and Industry 4.0.
On the basis of the above considerations and conclusions from the discussion on interesting issues discussed, I formulated the following thesis that as part of improving the water management planning process in the situation of progressive climate changes, including drought occurring more and more often, prognostic methods should be used using computerized analytical platforms equipped with Business Intelligence research tools, Big Data Analytics, artificial intelligence and other advanced data processing technologies Industry 4.0. Below I have described the key determinants confirming the formulated research thesis. To the above discussion I would like to add the following conclusion formulated as a summary of my previous considerations on this topic: The use of ICT and Industry 4.0, including artificial intelligence, Business Intelligence research tools, Big Data Analytics and other technologies of computerized, multi-criteria, advanced data processing. The above discussion inspired me to formulate the following question:
Should the improvement of the water management planning process in a situation of progressive climate change, including drought occurring more and more often, use predictive methods using computerized analytical platforms equipped with Business Intelligence research tools, Big Data Analytics, artificial intelligence and other advanced data processing technologies Industry 4.0?
Clean water is primarily necessary for human life and for the functioning of biological ecosystems.
Clean water is essential for agricultural production and many industries. Because the resources of clean water are shrinking in many places around the world, it will be necessary to improve the technology of purifying polluted water in rivers, lakes, etc.
The issue of water purification is therefore one of the most important factors of sustainable pro-ecological development based on the concept of a new, green economy.
Climate change, i.e. the ongoing global warming process, drains many areas of the tropical and subtropics, and fresh water resources are therefore falling. This will probably be one of the most serious consequences and problems of the global warming process, which is moving faster and faster. The issue of falling fresh water resources is one of the most serious problems and challenges for humanity in the 21st century. It is also a problem for biological ecosystems that undergo drying, and therefore biodiversity, including flora and fauna biodiversity on Earth is also decreasing. Climate change, mainly in terms of the global warming of the Earth's climate will cause in many places stepping of existing forest areas. There will be droughts in areas where these negative weather anomalies have not occurred. these processes will reduce the amount of water both on the Earth's surface and in the subcutaneous layers of the soil. Also, underground watercourses located in shallower underground layers may dry out over a period of several years in the area covered by long-lasting drought. This type of negative process of warming and dehumidifying the climate in a given area may lead to desertification of areas where vegetation previously occurred. In addition, these considerations should also take into account the impact of agriculture on the condition of rivers, including the quality and purity of water in rivers is large. Fertilizers dripping into rivers change the biological ecosystem in rivers. Mountain rivers in some countries are the only ones that are not yet seriously polluted. Another issue is obtaining drinking water from desalinated sea water. Due to the fact that there is less and less clean water on Earth. In connection with the development of industry, increasing water consumption in households, deep water exploitation, increasing pollution of rivers, ponds, lakes and seas as well as the progressing global warming process, clean water resources are falling.
In connection with the progress of civilization, the development of an industry that consumes large amounts of water, and also in connection with the progressive warming of the Earth's climate, the accelerating process of global warming, increasingly frequent cataclysms and climatic anomalies, such as the increasing frequency of droughts, the resources of available, clean water are decreasing. As part of protecting natural resources, techniques for efficient and economical water resource management should be improved. The industry should be developing technology for purifying and reusing water. In addition, water purification and reuse techniques in households and agriculture should be improved. As part of the purification of the environment, sewage treatment plants should be built in each city so as to reduce the discharge of sewage containing toxins harmful to living organisms, to reduce the flow of sewage into rivers, lakes, seas and oceans, which are increasingly polluted.
Due to the growing need to implement the principles of sustainable pro-ecological development in recent years, ecological innovations arise mainly in the field of renewable energy sources, improvement of waste segregation techniques, recycling, treatment of polluted water, reclamation of a devastated natural environment, energy-saving construction, electromobility of the automotive industry, etc. more ecological innovations, new technological solutions and technical improvements that are part of sustainable ecological development are also emerging in many other fields of science.
Droughts that are becoming more frequent in many green and agricultural areas are also associated with decreasing rainfall. Rain is necessary in many climatic zones for biological life to exist, for biodiverse natural ecosystems. In addition, rain in many climate zones and countries is essential for agricultural development. Rain is also a source of water in many geographical places, which then penetrates deep into the Earth, feeds water, subcutaneous watercourses, underground, deep water streams. In addition, rain supplies water to rivers and lakes, the living environment of many species of aquatic plants and animals, etc. Rain is necessary for the efficient functioning of ecosystems, but also for people. In some places on Earth there is less and less rain. This is a threat to the natural environment, to biological ecosystems, and long-lasting droughts appear. It is associated with global climate change, probably with global warming, global warming, and rising global annual temperatures.
Sustainable development can be achieved by various methods. Which methods will be chosen is determined by many factors of the environment, the environment of specific economic processes as well as the specifics of economic undertakings and the national economy. However, in the absence of a key development factor, a key raw material, such as water, may be a significant cost barrier to the implementation of the process of achieving sustainable development. Sustainable development in a situation of constant irrigation of agriculture is not excluded, but will generate high costs. In such a situation, profitable projects should be developed in the national economy that will finance the costs of the said irrigation. It cannot be ruled out that irrigated poor quality soil will produce high yields with appropriate fertilization and use, high crop production will be generated and after a period of several or more years it will be possible to create more complex flora ecosystems, including forest next to arable fields and in this the process of achieving sustainable development can be successively improved. Then sustainable development will be analyzed, implemented and improved in terms of the national economy.
In connection with the progress of civilization, the development of an industry that consumes large amounts of water, and also in connection with the progressive warming of the Earth's climate, the accelerating process of global warming, increasingly frequent cataclysms and climatic anomalies, such as the increasing frequency of droughts, the resources of available, clean water are decreasing. As part of protecting natural resources, techniques for efficient and economical water resource management should be improved. The industry should be developing technology for purifying and reusing water. In addition, water purification and reuse techniques in households and agriculture should be improved. As part of the purification of the environment, sewage treatment plants should be built in each city so as to reduce the discharge of sewage containing toxins harmful to living organisms, to reduce the flow of sewage into rivers, lakes, seas and oceans, which are increasingly polluted.
Sustainable ecological development is a necessity, it is a challenge for humanity to quickly implement it in order to slow down the global warming process. Sustainable pro-ecological development is a necessity for humanity to avoid extermination being a derivative of the increasingly faster global warming process and the forecasted increase in the scale of climate cataclysms that may appear at the end of the 21st century if on the global scale in the next several decades ecological innovations, widespread renewable sources of energy, electromobility will not be developed, the efficiency of waste segregation, recycling, management of clean water resources, etc., however, objective measurement of ongoing processes towards implementation of sustainable ecological development is difficult. In my opinion, the methodology for measuring sustainable sustainable economic development should be built on a set of key expected effects of implementing this type of development. In addition to the effects of sustainable sustainable economic development, the methodology of scoring analysis should also take into account all the important determinants of ecological reforms, including, first of all, the issues of implementing ecological innovations, the scale of development of renewable energy sources, electromobility, increasing the efficiency of waste segregation, recycling and also improving management of clean water resources management, etc. .
The analysis of predictions and the continuation of specific processes could relate to e.g. climate, market, space, geological, natural, economic processes, etc.
Should the basic components of this type of system be the following components of computerized technologies for advanced information processing typical of the current technological revolution known as Industry 4.0.?:
- Big Data database system,
- Business Intelligence analytical platform,
- data processing in the cloud computing,
- artificial intelligence.
In addition, if this system should have convenient access from the Internet, this type of solutions can be enabled through the Internet of Things technology. In this way, access to the system or some of its modules could be implemented e.g. from smartphones, tablets, laptops and other mobile devices.
Therefore, if you have advanced research instruments that help you carry out prognostic analyzes. For example, tools that allow you to perform sentiment analyzes on large sets of information downloaded from the Internet and stored in Big Data database systems. If this type of analytics is combined with advanced information processing instruments on Business Intelligence analytical platforms, then it is possible to build accurate research tools enabling precise analysis of predictions of anticipated processes for subsequent periods in the future.
Can this type of research help analyze key processes in environmental issues, natural ecosystems and biodiversity? Can this type of research be helpful in precisely defining complex, multi-faceted progressive processes regarding:
- changes in environmental pollution diagnosed in specific areas of the globe?
- precise diagnosis and analysis of the effects of progressing processes undertaken in the field of environmental protection, natural ecosystems and biodiversity?
- observation, data collection, examination and analysis of the progressive process of greenhouse gas emissions?
- observing, collecting data, examining and analyzing the progressing global warming process and examining the effects of this process diagnosed in specific areas of the globe?
- collecting data that could help in forecasting more and more frequent weather anomalies and climatic disasters?
- collecting data that could help in forecasting further natural disasters, e.g. developing viral, fungal, bacterial diseases and caused by insects and other pests in arable fields?
- analysis of the change in the state of clean, potable surface, subcutaneous and deep water in green, agricultural and also those that are draining and sterilizing?
In my opinion, currently developed techniques of satellite information gathering for the needs of analyzes carried out on large data sets carried out in Big Data database systems can be helpful in the research topics presented above. What other research topics can be implemented in support of satellite information collection for the needs of analyzes carried out on large data sets made in Big Data database systems?
In view of the above: Do you agree with my opinion that in the context of the projected acceleration of the global warming process, humanity should, in order to avoid a global climate disaster, should prioritize in the 21st century the change of the classic economy to a new green economy to develop economies according to the concept of sustainable pro-ecological development, in replace classic energy sources based on burning minerals with renewable energy sources. In addition, greenhouse gas reduction programs and improvement of management and management of clean water resources should be launched in economic processes as soon as possible and as much as possible. Therefore, it is also necessary to develop ecological, material and energy innovations, including the improvement of renewable energy technologies so that pro-ecological energy solutions are becoming cheaper to implement and develop, and become more common. The key issue is also to improve the management and management of clean water resources and also to develop ecological innovations for obtaining clean, potable water from deep deposits located underground, e.g. under the Sahara Desert in Africa, obtaining water from the atmosphere using liquefaction processes and by improving seawater desalination technology.
In line with the above, in my opinion, as part of improving the water management planning process in the event of progressive climate change, including drought occurring more and more frequently, forecasting methods should be used with the use of computerized analytical platforms equipped with Business Intelligence, Big Data Analytics, artificial intelligence and other research tools advanced data processing technologies Industry 4.0.
Do you agree with me on the above matter?
In view of the above, I am asking you the following questions:
- What is the impact of the global warming process on freshwater resources and biodiversity on Earth?
- Improving the technology of purifying polluted water as an element of sustainable pro-ecological development based on the concept of a new, green economy?
- Is it possible to objectively achieve sustainable development in the absence of a significant production factor in the national economy?
- What is the impact of agriculture on the purity of water in rivers?
- What technologies for water purification and desalination should be developed?
- Is there a need for water purification in the environment, in industry and for household needs?
- What elements of information technology should consist of an analytical and database system used to forecast the continuation of trends for multi-faceted processes?
- Does technological progress contribute to the improvement of techniques for conducting analyzes of forecasting future processes?
- Are you familiar with the techniques, goals and functions of satellite information collection for the purposes of analyzes carried out on large data sets of information collected in this way and stored in Big Data database systems?
- Should improvement of the water management planning process in the event of progressive climate change, including drought occurring more often, use prognostic methods using computerized analytical platforms equipped with Business Intelligence research tools, Big Data Analytics, artificial intelligence and other advanced processing technologies Industry 4.0 data?
- Do you have multifactorial models that use the results of advanced analysis of large data sets in Big Data database systems that could help diagnose the main determinants and predict the pace and negative effects of the progressing global warming process, climate change, future forest fires and drainage of agricultural land and green?
- How to build a model methodology for measuring sustainable sustainable economic development?
- Are there banks and / or enterprises that take into account forecast climate change in their business decisions?
- How should the application of Industry 4.0 technology be developed to forecast complex natural processes and climate change?
- What do you think about this topic?
- What is your opinion on this topic?
Please reply
I invite you to discussion
thank you very much
Best wishes
Dariusz Prokopowicz
Dear Stephen I. Ternyik, Karen A. Darbinyan, Karen A. Darbinyan, Md NAZMUS Sadekin, Mohamed Elbessa, G. Levy, Abhijit Mitra, Thank you very much for participating in this discussion and providing inspiring and informative answers to the above question: Are there banks and / or companies that take into account forecasted climate changes in their business decisions?
Thank you very much for your inspiring, interesting and highly substantive answer This discussion confirms the importance of the above-mentioned issues and the legitimacy of developing research on this subject. I also believe that the impact of new pro-ecological reforms, implementation of the principles of sustainable development into economic processes, pro-ecological transformation towards green economy / circular economy, etc., is also increasingly included in the strategies and missions of the development of financial institutions, e.g. in the credit policy of banks commercial. Best wishes,
Have a nice day,
Dariusz Prokopowicz
Yes...for risk analysis... During the last years, climate change and its consequences to the global economy have become more transparent. Hence, financial regulators are trying to mitigate the negative impacts, by setting out a framework for a transition to a greener economy. Climate change is not an issue that will arise difficulties in the future, it is happening now and constitutes a main issue for the financial, among any other sector. A number of EU initiatives put climate change at the forefront of the financial regulatory agenda, and it is clear that the regulators will continue to hold an active lead. Banks and other financial institutions must effectively collaborate with regulators to focus on the financial risk that arises from climate change. Trying to adapt and transit their business models to a low-carbon economy may affect the business models and creditworthiness of the companies to which they are exposed to, as Banks need to re-design their governance, policies, and processes...(deloitte, 2020).
This paper examines the channels via which climate change and policies to mitigate it could affect a central bank’s ability to meet its monetary and financial stability objectives.... argues that two types of risks are particularly relevant for central banks. First, a weather-related natural disaster could trigger financial and macroeconomic instability if it severely damages the balance sheets of households, corporates, banks, and insurers (physical risks). Second, a sudden, unexpected tightening of carbon emission policies could lead to a disorderly re-pricing of carbon-intensive assets and a negative supply shock (transition risks). Climate-related disclosure could facilitate an orderly transition to a low-carbon economy if it helps a wide range of investors better assess their financial risk exposures... Batten, S., Sowerbutts, R., & Tanaka, M. (2016). Let's talk about the weather: the impact of climate change on central banks. .
Insurance industry is developing the Actuaries Climate Index and the Actuaries Climate Risk Index which have the objective of informing the insurance industry about the impact of extreme weather and its associated risks.... Miljkovic, T., Miljkovic, D., & Maurer, K. (2018). Examining the impact on mortality arising from climate change: important findings for the insurance industry. European Actuarial Journal, 8(2), 363-381.
Hedging companies... The variability of weather conditions is expected to continue to rise because of climate change. Manufacturers can choose to do nothing and suffer the financial consequences, or transfer the weather risk partly or wholly to others. This paper presents an approach to transfer weather risks to risk takers and reduce sales volatility using weather index-based financial instruments... Brusset, X., & Bertrand, J. L. (2018). Hedging weather risk and coordinating supply chains. Journal of Operations Management, 64, 41-52.
Derivative trading... One of the interesting financial instruments, which can potentially utilize big data analysis and algorithms in several different ways are weather derivatives. Unlike other financial instruments, their research combines both market and weather analysis.... Bondarenko, I., Phapale, P. B., & Robila, S. A. (2019, May). Visualizing Weather Financial Impact on Industries and Weather Derivatives. In 2019 IEEE Long Island Systems, Applications and Technology Conference (LISAT) (pp. 1-7). IEEE.
Dear D A Gayan Nayanajith,
Thank you very much for interesting information and references to literature sources in the field of green finance, green banking, etc. Indeed, in recent years, the importance of financing pro-ecological enterprises by financial institutions, including the growing role of green finance, green banking, green credits, etc. In my opinion, green finance , green banking, green credits, etc. are an important determinant of the pro-ecological transformation of the traditional brown economy to a sustainable green economy / circular economy. The topic is important and requires continuation both in the field of science and in the context of the pro-ecological transformation also taking place in financial institutions.
Best regards,
Dariusz Prokopowicz
Yes, an example is the development of green finance, green banking, green credits, etc., under which financial institutions, banks, investment funds, enterprises finance the implementation of pro-ecological economic ventures.
Best regards,
Dariusz Prokopowicz
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