SCR CEO Rémy Estran-Fraioli in Les Echos: Climate change could lead to $600 billion in infrastructure value loss — but we can identify the most vulnerable projects and fix them

 

Rémy Estran-Fraioli, CEO of Scientific Climate Ratings (SCR), told Les Echos, the leading French financial daily, that climate change could wipe out “nearly 600 billion dollars” in value across global infrastructure assets but it is possible to identify the most vulnerable projects and fix them.

Key insights from his interview with Thibaut Madelin, Berlin Correspondent of Les Echos:

• SCR quantifies the financial materiality of climate risk, assessing exposure to both physical and transition risks, covering more than 6,000 infrastructure assets worldwide, including airports, roads, data centers and power plants.

• One use case evaluates the exposure of an airport on Australia’s east coast, where the net asset value (NAV) is expected to decline from 100% to 69% by 2030 due to climate-related hazards, particularly storms and flooding.

• The ratings enable forward-looking assessments across multiple climate scenarios, illustrating the cost of inaction

Rémy Estran-Fraioli was quoted as saying:

“The total value of global infrastructure covered by our ratings is close to 2 trillion dollars. On average, our analysis shows that 13% of that value could be lost by 2035, and up to 29% by 2050 – nearly 600 billion dollars in cumulative losses. These, however, are not distributed in a single way. Those rated A and B, which make up about 20% of our coverage, account for only 2% of all losses. Meanwhile those rated F and G (the lowest) also represent nearly 20% of our coverage but are responsible for over 50% of all these losses.”

“Investors remain present, but their appetite is shifting. The initial enthusiasm for green finance has encountered a sense of disillusionment. The political climate, particularly in the United States, has weakened some voluntary climate initiatives, such as the ‘Net Zero’ alliances. Still, 2024 marked a record year, with 2.1 trillion dollars invested globally in the energy transition, up 11% from the previous year.”

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