Integrating Resilience into Investment Decision-Making

Most infrastructure assets are currently not integrating PCRs in their design, structuring and valuation. There are no real incentives to do so given that the impact of such risks is both difficult to assess and likely to take place in the long term. An incremental upfront capital expenditure in resilience may therefore not be financially rewarded. Yet there is potential for a systemic value dislocation relating to infrastructure assets globally as time goes by, the probability of PCRs increases and their materiality becomes more apparent.

In addition, transferring PCRs to insurers may not be a long term viable option as risk probability and materiality rise – the cost of insurance may become prohibitive for specific risks and there is no certainty that the insurance market will continue to insure against certain hazards over the long term. There is no currently recognized methodology for assessing PCRs at the asset level or incentives to report on such risk exposure.

This session brings together expert practitioners who have been active in design and development of methodologies for assessing PCRs and integrating them infrastructure investment decision-making; both at the onset in relation to an asset design, structure and initial investment, and over the life cycle of an asset as it is potentially refinanced and sold to other investors.

The virtual moderator will invite expert guests from a range of industries and sectors – engineering, data analysis, rating agencies, and government - to discuss the challenges, opportunities and implications of accurately integrating physical climate risks in investment decision making by developing a methodology to quantify the economic, social and financial benefits of incremental investments in resilience will provide a substantial and critical incentive for the financial markets and services to embed resilience upfront.

This session will be of interest to analysts, policy and decision makers from data , engineering, investment, rating agencies, government officials, public policy-makers, pension funds and insurance sector.

Integrating Resilience into Investment Decision-Making