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<\/div>\nApollo Global Management Inc. is building out its risk review process to reflect the impact on asset valuations of extreme weather.<\/p>\n
The decision comes amid a rise in the damage done to physical assets by floods, storms and wildfires. Apollo, which has been conducting so-called top-down analyses for such risks since 2023, is now broadening that approach to allow for a more granular process to identify company-level risks before closing deals, says Jaycee Pribulsky, Apollo\u2019s chief sustainability officer.<\/p>\n
\u201cBoth private equity and private credit teams are expanding bottom-up, asset-level evaluations of physical and transition risks,\u201d she told Bloomberg.<\/p>\n
\u201cClimate-driven disruptions can directly impact operating costs, supply chains and insurance markets,\u201d and that makes financial risk factors \u201cmore immediate,\u201d she said.<\/p>\n
The development feeds into a growing awareness that extreme weather events increasingly have the potential to dramatically alter asset values. That\u2019s as managers like Apollo look to reassure investors more broadly that valuation models in private markets are sound.<\/p>\n
When wildfires and floods rip through neighborhoods, asset values can collapse from one day to the next. Swiss Re estimates that natural catastrophes in 2025 led to $107 billion in global insured losses, with total economic losses hitting $220 billion.<\/p>\n
\u201cElevated natural catastrophe losses are no longer outliers but the new baseline,\u201d Monica Ningen, Swiss Re\u2019s chief executive of US Property and Casualty, said in a statement.<\/p>\n
Pribulsky says recent steps taken by Apollo include a deeper analysis of the impact of \u201cacute and chronic climate hazards\u201d on areas such as \u201cloan-level mapping in mortgage portfolios to evaluating drought, flood, heat, and wildfire exposure in hard-asset sectors, where these risks materially can influence collateral values and cash-flow durability.\u201d<\/p>\n
Advances in technology and data availability are allowing Apollo to refine its approach to measuring the physical and transition risks associated with adapting to a hotter planet, with such assessments now \u201cintegrated into every deal, across all asset classes,\u201d she said.<\/p>\n