Are your climate risk models already out of date?
Most companies still treat climate-risk assessment as a compliance task – a report for investors or regulators every couple of years.
But with climate change happening now, relying on outdated models is risky. It’s essential to prepare for future risks and scenarios to ensure your business remains resilient.
Climate Models Are Moving Faster Than You Think
When businesses run a climate-risk study, they usually rely on climate scenarios – scientific projections of how temperature, rainfall, storms, sea level rise, and weather patterns might change under different emissions pathways.
- CMIP6: The “Coupled Model Intercomparison Project, Phase 6” is a global collaboration of climate scientists. Its scenarios underpin many corporate reports and the UN’s IPCC assessments.
- NGFS scenarios: the central-bank community’s translation of climate science for finance, updated to Version 5 (Nov 2024) with the latest climate and economic data and policy commitments. Their short-term (to 2030) scenarios were added in May 2025.
- CMIP7: The next round of global climate projections. Due from late 2025, it will use updated forcings, finer-grained models, and the most recent emissions data – meaning a sharper, more realistic picture of risks.
These scenarios help estimate the likelihood of extreme events, such as floods or heatwaves, and changing weather patterns, supporting better risk assessment and adaptation planning.
This means: the assumptions you’re using today could be outdated within months.
Why Climate Risks Matter for Business Strategy
Outdated scenarios affect compliance and business decisions:
- Capital allocation: You might invest in assets or supply chains that appear safe in old models but look vulnerable to operational risks in new ones.
- Insurance & finance: Banks and insurers are starting to price risk using the latest data. If you lag, your profile may look artificially low or high, impacting your costs and revenues.
- Stakeholder trust: Investors and regulators now ask not just “do you report?” but “are your assumptions current?” Reputational risk can increase if outdated information leads to a loss of trust among customers and other stakeholders.
A lag in data = a lag in agility. Outdated scenarios can also hinder your ability to achieve strategic objectives.
A Smarter Way Forward
It’s tempting to wait for CMIP7 before doing another major study. But that means 2 years with no fresh insights – at the very moment risks are accelerating.
A better approach: treat climate risk as a living process, not a one-off report.
Modern platforms and systems make it feasible to identify and manage risks more effectively:
- Set up your data once (assets, supply chains).
- Plug in new scenarios as they’re published.
- Refresh analysis quickly and affordably – instead of restarting from scratch.
Integrating strategies and plans into your ongoing risk management ensures that planning is proactive and adaptive to new information.
This way, you gain insights today, and can update again tomorrow, ensuring risks are managed and planning is continuous.
Putting it into Practice
Three steps to build resilience:
- Move from project → process. Treat climate risk like a financial model – continuously updated. Prioritise adaptation actions and climate change adaptation as essential strategies for building resilience against climate impacts.
- Plan for re-runs. Budget and schedule for CMIP7 refreshes and focus on the development of processes to address both internal risks (such as employee safety and operational hazards involving employees) and external risks (like economic shifts and natural disasters).
- Integrate results. Feed updated scenarios into strategy, not just sustainability reports. Integrate results to manage and control risks effectively, ensuring that employee safety and the well-being of employees are considered alongside broader risk management objectives.
By following these steps, businesses can proactively deal with risks, manage uncertainties, and maintain control over both internal and external challenges.
Advisory but Urgent
This isn’t about chasing every new dataset. It’s about keeping pace as the science evolves.
Outdated data increases the business risk a business faces, including strategic, operational, and reputational risks that can impact profits and long-term success.
Businesses that act now will adapt faster, build stakeholder confidence, and stay ahead. Those that wait risk making big decisions on data already past its sell-by date.
To deal with, manage, and mitigate these risks proactively, organisations must regularly review and update their climate scenarios.
How often does your organisation update its climate scenarios? If it’s “every couple of years,” now is the time to rethink.
Want to explore how to build a living climate-risk process to manage and mitigate business risk? Let’s connect.
RedLines
At RedLines, we make climate risk simple, accessible, and actionable for businesses, supporting the building of climate resilience across organisations.
While most tools focus on probabilities and technical data, RedLines translates it into financial and operational insight – what business leaders actually need.
No more juggling multiple, complex models and datasets. RedLines brings everything into one intuitive platform, helping you understand your exposure, explore solutions, and build resilience with confidence through our comprehensive services.