Benefits for Energy and Financial Services

Benefits for Energy and Financial Services Professionals

Gain actionable investment insights from weather forecasts and climate analysis
Leading mutual and hedge fund managers and energy traders are using weather intelligence from AER to manage their investment strategies. They’re also gaining insights from scientific analysis of the latest climate research.

“In 2009, as climate change became a more pressing issue for U.S. businesses, [Dan Rice] grew concerned about the coal companies in his portfolio; he wondered if climatologists knew something he didn't. Rice commissioned Atmospheric & Environmental Research (AER), a Lexington (Mass.) consultancy to synthesize the climate literature. After he sat down to read AER's 35-page report, he says, “I was humbled by how little I know—and how much uncertainty there is in the existing science.”
-- Dan Rice, managing director of BlackRock's $1-billion Energy & Resources Fund, from The Rise of the Climate Consultant: As the SEC asks for climate risk disclosure, an industry blooms, in Bloomberg BusinessWeek, June 6, 2010.

Managers can adjust the risk of their weather sensitive financial securities or properties by understanding the seasonal forecast or short term weather such as a hurricane’s predicted landfall location, timing and intensity.

Industry Value
Energy
  • Monitor potential weather impacts on energy assets in the Gulf, and renewable generation assets along the East and Gulf coasts.
  • Analyze and trade futures contracts based on the Chicago Mercantile Exchange’s Hurricane Index (CHI)
Financial Services
  • Use weather forecasts to gauge heating demand that moves the natural gas, oil and coal markets.
  • Adjust portfolio holdings based on potential weather and climate impacts.
Insurance and reinsurance
  • Assess and mitigate potential financial impact of tropical storms and tornado or hail forecasts.
  • Determine risk implications and identify new market opportunities.

Weather Forecast Services
The AER weather forecast and climate risk assessment services enable financial services professionals to make decisions with confidence based on the latest, most accurate forecasts.