Vancouver Co. Leading AI Charge To Predict Climate Change Risks

As heat records continue to be smashed worldwide and deadly and damaging weather events seem to be rising, one company, Vancouver-based Aisix Solutions Inc. (TSX.V: AISX;OTCQB: AISXF), is using artificial intelligence (AI) to try and predict risks facing companies and investors.

Aisix is a leading global climate risk and data analytics solution provider with risk products that implement AI to assess hundreds of socioeconomic and market variables, as well as the latest climate models.

The company has released its strategic plans for the coming year.

"Unlike climate risk firms that only suggest long-term value at risk, Aisix is committed to developing its suite of tools that can support partners facing multiple climate scenarios," the company said in its corporate presentation.

In a State of the company update issued to shareholders on January 24, Aisix said it is "strategically positioned to redefine risk analysis with advanced solutions."

"Climate change and digital transformation are the two most powerful trends of our century," the company has noted.

The company's goals for 2024 include introducing ground-breaking AI-driven analytics products; targeting new sectors such as insurance, finance, and property management; expanding to untapped markets, especially the United States and Europe; and developing a new enterprise-level user interface and user experience for its digital products.

"Our vision for 2024 is not just about advancing risk analysis technology; it's about empowering our clients with clarity and confidence in their decision-making processes in an uncertain world," Chief Executive Officer Mihalis Belantis said. "We are excited about this journey and are committed to driving positive change in how businesses understand and respond to climate risks. Aisix is not just navigating the present; we strive to shape the future of investment decisions."

The Catalyst: Getting Ahead of 'High Price Tag' of Disasters

Aisix said its total addressable market (TAM) for consumers includes 300 million buildings in the U.S., European Union, and Canada worth as much as CA$9.2 billion.

About 20 million annual home sales and new building permits in the U.S., EU, and Canada make up a serviceable addressable market (SAM) of CA$630 million, the company said.

And 9 million annual home sales and new buildings in Canada and the U.S. represent a service obtainable market (SOM) of CA$270 million, Aisix said.

For enterprise clients, the company said the TAM could be as high as CA$40 billion, the SAM could be as high as CA$4 billion, and the SOM as high as CA$595 million.

It's no wonder weather disasters "carry an outrageously high price tag," WTW reported last November. "Worldwide, the economic cost of weather and climate disasters was nearly (US)$1.5 trillion over the decade 2010-2019. So far in 2023, the United States has experienced 23 separate billion-dollar disasters, the highest number ever (and the year is not yet over)."

WTW noted that heat waves may have caused China’s gross domestic product to decline by more than a percentage point.

The climate risk digital solutions market was worth US$880 million in 2021, Verdantix reported. It predicted the market will reach more than US$4 billion in 2027.

To get those figures, Verdantix "analyzed macroeconomic factors, such as the recent volatility of energy prices and the high rate of inflation, alongside disclosed revenue data and global corporate survey data," Alice Saunders wrote for Verdantix in a blog.

"The increasing severity and frequency of weather events is compounded by the rising cost of insurance premiums," she wrote.

"Firms will invest in climate risk digital solutions to stay on top of policy risks," Saunders noted. "Firms must assess their investments based on physical and transition risks to ensure they are not left with stranded assets."

AI Addresses Multiple Climate Scenarios

Aisix's machine-learning techniques assess hundreds of socioeconomic and market variables, as well as the latest climate models. The company said it also committed to developing its suite of tools to support partners facing multiple climate scenarios.

Focusing on "organizations facing complex challenges" gives its clients an edge in the climate adaption race, the company said. 

"This strategic shift aligns with Aisix's commitment to being an industry leader that provides critical insight and support for mitigating the impacts of climate change," Aisix said in its State of the Company.

"This comes as regulators are moving to require disclosure of climate-related risks in emerging reporting regimes, including the new international IFRS (International Financial Reporting Standards) sustainability disclosure standards. In parallel, measuring exposure to extreme weather events is becoming increasingly important to investors."

The company changed its name from Minerva Intelligence Inc. last summer to reflect its shift toward novel AI-driven solutions.

Ownership and Share Structure

According to Reuters, about 12% of Aisix Solutions is owned by insiders, and the rest is retail.

Top shareholders are the CEO Belantis with 10.28% or 7.91 million shares, and Co-founder and Director David Poole with 1.8% or 1.39 million shares, Reuters said.

Aisix has a market cap of CA$3.88 million with 76.96 million shares outstanding, 67.66 free floating. It trades in a 52-week range of CA$0.13 and CA$0.02.

Important Disclosures:

1. Aisix Solutions Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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