Startups are predicting how climate change will affect global commerce.
What’s new: Companies that specialize in climate analytics are training neural networks to help businesses manage risks posed by a warming globe, The Wall Street Journal reported.
Changes in the air: These young companies model interactions among environmental data and factors such as commodity prices, consumption patterns, and import/export data. They sell the resulting insights to corporate customers who are concerned about the impact of climate change on their ability to buy goods and raw materials.
- ClimateAI, founded in San Francisco in 2017, trained its model on the output of long-range climate simulations. The model generates short-term forecasts — useful for identifying risks in the coming year — and predicts how crops will fare in various regions well into the future. The company, which has raised $16 million, predicted that 2020 would bring higher-than-average rainfall in a part of Australia, helping a seed company increase its sales by 5 to 10 percent.
- Gro Intelligence, a New York company that has raised $115 million since 2014, analyzes over 40,000 data sources including satellite imagery and precipitation reports to forecast the severity of future droughts, floods, and other extreme weather events as well as their impacts on over 15,000 agricultural commodities. Its customers include consumer goods giant Unilever (Ben & Jerry’s, Lipton, Knorr), fast-food conglomerate Yum! Brands (KFC, Pizza Hut, Taco Bell), and European financial titan BNP Paribas.
- One Concern analyzes data sources including Google Street View and satellite imagery to help customers plan for and execute disaster response plans, including those caused by climate change, on buildings, roads, and other infrastructure. The Menlo Park, California, company has raised $119 million since its founding in 2015.
Behind the news: Corporations are waking up to the hazards posed by climate change to their own well-being.
- A 2021 survey of 8,098 companies throughout the world estimates that climate change, deforestation, and water scarcity will cost corporations $120 billion over the next five years.
- The U.S. Securities and Exchange Commission, which regulates publicly traded companies, plans to require corporations to disclose known climate risks to investors.
- Earlier this year, Exxon Mobil shareholders elected new board members who promised to redirect the oil and gas giant toward clean sources of energy.
Why it matters: This year’s run of record-breaking wildfires, floods, and freezes are a preview of what to expect in a warmer world, according to the latest International Panel on Climate Change report. AI-powered forecasts can help businesses protect assets and revenue — and the rest of us prepare for further impacts to come.
We’re thinking: By calculating the costs of climate disaster, AI can make the very real danger posed by atmospheric carbon emissions feel as urgent as it is.