Climate Services

Climate services, as defined by the World Meteorological Organization's (WMO) Global Framework for Climate Services (GFCS), is the process of transforming climate data into customized products and information for decision-makers. It provides science-based insights to help users manage climate variability and change. Within enterprise risk management, climate services are essential for implementing standards like ISO 14090:2019 (Adaptation to climate change) and fulfilling disclosure requirements under IFRS S2 (incorporating TCFD). Unlike weather forecasts, which are short-term, climate services focus on long-term trends and probabilities (months to decades), enabling companies to assess and formulate strategies against physical and transition risks by providing actionable intelligence, such as future flood probabilities for a specific facility.

Enterprises apply climate services in a structured process. Step 1: Risk Identification, using climate projection maps to identify key physical risks like floods or droughts affecting assets and supply chains. Step 2: Scenario Analysis, employing climate models under various scenarios (e.g., SSPs) to quantify potential financial impacts, such as production loss from extreme heat. Step 3: Strategy Integration, embedding the quantified risk insights into business continuity plans, investment decisions, and disclosures aligned with IFRS S2. For instance, a major Taiwanese semiconductor firm used long-term precipitation forecasts to assess water scarcity risks, leading to a significant investment in water recycling facilities. This action mitigated operational risk and enhanced their ESG rating, demonstrating resilience to investors.

Taiwanese enterprises face three primary challenges. First, a lack of high-resolution, localized data, as global climate models often fail to capture Taiwan's complex microclimates. Second, a talent gap in interpreting complex climate science and translating it into business impact. Third, difficulty in justifying the high initial cost, as the ROI is often long-term risk mitigation rather than immediate profit. To overcome these, companies should partner with local institutions like Taiwan's NCDR for downscaled data. They can establish cross-functional teams and engage external consultants for capacity building. Starting with a pilot project on a critical asset can demonstrate value and secure management buy-in for a broader rollout, proving the long-term strategic necessity of climate services.

Winners Consulting specializes in climate services for Taiwan enterprises, delivering compliant management systems within 90 days. Free consultation: https://winners.com.tw/contact