Climate change has done more than just trigger the melting of polar ice caps, rising sea levels and extreme weather—it has changed daily life, and business along with it.
In an increasingly turbulent climate, companies need to know the specific risks that climate change poses to their business—from what they are, to where or when they could occur, to how much financial damage they could incur. However, up until recently, most companies didn’t have the resources or expertise to calculate this. That’s where Durham’s The Climate Service comes in.
Designed for the age of climate change, The Climate Service is a climate analytics company offering a SaaS solution—called Climanomics—which quantifies a business’s climate risk. It is a culmination of CEO James McMahon’s extensive scientific background at Harvard University and the Massachusetts Institute of Technology, as well as his experience working at the National Centers for Environmental Information at the National Oceanic and Atmospheric Administration (NOAA).
“When I saw that the financial world was going to need the kind of climate data that I understand from my academic background and working at NOAA,” McMahon said, “I knew that the time was right to form a startup.”
In 2015, the Financial Stability Board—an international body created by the G20 major economies in the wake of the Great Recession—formed the Task Force on Climate-related Financial Disclosure in order to encourage businesses to outline how they are affected by climate change. It established climate risks as material financial risks that should be disclosed. This spurred the demand for a way to synthesize climate data.
The Climate Service was established roughly two years ago in The Collider, an Asheville-based, non-profit co-working space for climate entrepreneurs. It now boasts an advisory board with four Nobel Prize laureates, and in September, it was selected to participate in the Wells Fargo Startup Accelerator, a virtual program for fintech startups.
In June, The Climate Service moved its headquarters to Durham. It will soon be hiring technologists, full-stack developers, systems administrators and analysts to work at its Durham location.
“We love the Durham community—the Durham startup community, the Durham technology community,” McMahon said. “And so far, it has served us well.”
The company also has a presence in Asheville and Washington, D.C., and it is opening an office in New York with leadership from The Economist alumnus Joseph Lake, who recently joined the team as COO.
“We want to embed climate-risk data into every decision around the world,” Lake said, “and in my view, The Climate Service has built the best model in order to do that. This is by far the most important and pressing issue facing mankind over the next few decades, so it’s a privilege to join the team.”
Climate change continues becomes a growing problem and it is certain that it will not be going away any time soon, added Terrence Thompson, a Co-Founder of The Climate Service.
“What gets me up in the morning is realizing that this is a worldwide and pressing problem,” Thompson said. “The quantification of climate risk into financial terms will drive, in part, the machinery of capitalism to help solve this problem.”