range between those expecting a return in the short-term (within 5–10 years) to those
expecting a continuous return over 20 years or more.
Over the long-term, the climate change impacts bring in risks such as the
sustainability of the rate of return. Thus, when investors are considering long-term
investment in infrastructure, they will surely factor in the climate and adaptation risk
when taking decisions in order to reduce risks over their financial returns.
When the physical impacts of climate change, are likely to affect investors and
their companies, it is essential that the investors:
(1) integrate climate change associated risks and potential opportunities when
taking decisions during their investment analysis.
(2) confirm that the companies have the proper management systems and appropriate governance safeguards.
(3) scrutinise the risks associated with adaptation in their portfolios, and request the
companies for a more effective risk management.
(4) request disclosure of climate risks in order to be aware and understand the
actions taken by companies towards adaptation.
(5) assess, using their own due diligence, the vulnerability to climate change and the
way it is going to be handled over the expected lifetime of the infrastructure.
(6) develop financial models to provide incentives for planning, designing, building
and operating infrastructure, keeping in mind, both present and future climate
risks.
10.3.5 Infrastructure Owners and Operators
In the past, it was common for the same organisation to build an infrastructure and
operate it (or provide the service) itself. This is no longer so, and very often the
owner and the operator are two different organisations. However, the consequences
of climate change are likely to affect both of them in the following ways:
(1) The value of the asset is directly affected (usually downwards).
(2) Weather might disrupt the services offered, and hence not satisfy the customers’
needs. This would probably entail an increase of associated service fines.
(3) Any disruption of the services offered would also imply extra costs for restoring
the services and/or inefficiencies. In turn, this would increase operating costs and
reduce revenues.
(4) Any disruption of the services offered would affect the reputation of both the
owner and the operator, probably jeopardising their chances to attract future
investment or contracts.
National infrastructure owners and operators should therefore:
(1) consider adaptation as a key by-word to permeate their organisation from bottom
to top, including the decision making process.
(2) integrate adaptation into the maintenance schedules of existing infrastructure.
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expecting a continuous return over 20 years or more.
Over the long-term, the climate change impacts bring in risks such as the
sustainability of the rate of return. Thus, when investors are considering long-term
investment in infrastructure, they will surely factor in the climate and adaptation risk
when taking decisions in order to reduce risks over their financial returns.
When the physical impacts of climate change, are likely to affect investors and
their companies, it is essential that the investors:
(1) integrate climate change associated risks and potential opportunities when
taking decisions during their investment analysis.
(2) confirm that the companies have the proper management systems and appropriate governance safeguards.
(3) scrutinise the risks associated with adaptation in their portfolios, and request the
companies for a more effective risk management.
(4) request disclosure of climate risks in order to be aware and understand the
actions taken by companies towards adaptation.
(5) assess, using their own due diligence, the vulnerability to climate change and the
way it is going to be handled over the expected lifetime of the infrastructure.
(6) develop financial models to provide incentives for planning, designing, building
and operating infrastructure, keeping in mind, both present and future climate
risks.
10.3.5 Infrastructure Owners and Operators
In the past, it was common for the same organisation to build an infrastructure and
operate it (or provide the service) itself. This is no longer so, and very often the
owner and the operator are two different organisations. However, the consequences
of climate change are likely to affect both of them in the following ways:
(1) The value of the asset is directly affected (usually downwards).
(2) Weather might disrupt the services offered, and hence not satisfy the customers’
needs. This would probably entail an increase of associated service fines.
(3) Any disruption of the services offered would also imply extra costs for restoring
the services and/or inefficiencies. In turn, this would increase operating costs and
reduce revenues.
(4) Any disruption of the services offered would affect the reputation of both the
owner and the operator, probably jeopardising their chances to attract future
investment or contracts.
National infrastructure owners and operators should therefore:
(1) consider adaptation as a key by-word to permeate their organisation from bottom
to top, including the decision making process.
(2) integrate adaptation into the maintenance schedules of existing infrastructure.
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10 Climate Change and Infrastructure