A hospital runs a battery of tests on a patient: blood pressure, oxygen, glucose, kidney function. It averages the results. The number is 72. Is the patient healthy?
You don’t know. Averaging across independent health indicators tells you nothing useful. A blood pressure score of 95 and a glucose score of 49 don’t average to a blood pressure problem of moderate severity. They’re separate conditions requiring separate attention. The average hides both.
This is what happens when companies report a single aggregate climate risk score for a site, an asset, or an operation. It might be the clearest example in this whole series of a Planet Simple trap producing answers that are actively misleading.
How the trap works
Physical climate risk assessments typically evaluate a range of perils: heatwave, drought, flooding, storms, sea level rise, wildfire. These are different phenomena with different probabilities, different onset characteristics, and different impact profiles. They’re also largely independent of each other.
The standard practice is to combine the individual scores into an aggregate climate risk metric. One number. Comparable across sites. Comparable against other business risks.
Take two sites. Site A has elevated exposure across a moderate range of perils. Site B has low sea level rise exposure, but severe storm and heatwave risk. An averaging exercise can easily produce a higher aggregate score for Site A. So the investment dollars go to Site A. Is that right? Almost certainly not. Storm and heatwave impacts get exponentially worse as severity rises. The average misses that. The average says, implicitly, that the absence of sea level rise at Site B somehow softens the heatwave risk there.
No one would reason that way out loud. The aggregate score does it for them.
Why the averaging happens
The impulse to aggregate is understandable. Decision-makers are busy. They want a number. They want to stack climate risk against other business priorities and allocate accordingly.
That’s Planet Simple at work. The drive to reduce complexity to something measurable, rankable, and manageable with familiar tools. The problem is that climate risk doesn’t behave like a single quantity with a magnitude. It’s a collection of distinct physical phenomena with different time horizons, different impact profiles, and different implications for how you run the business.
Collapsing all of that to one number hides the risk you’re claiming to manage.
What a more useful approach looks like
Assess each peril on its own terms. Understand how it could affect operations at the site level. Make investment decisions on the basis of those individual assessments.
Climate risk is also a driver of existing business risks. The risk of more extreme weather expresses itself as operational risk: damaged assets, disrupted production, lost working days, broken supply chains.
The aggregate climate risk metric replaces the problem with a number, and then manages the number. The simplification is the trap.
That’s Planet Simple in its purest form.
This is part of the Planet Simple Traps series, exploring the tools and frameworks that look rigorous but quietly reinforce the assumptions holding corporate sustainability back. Based on Leaving Planet Simple by Dr. Alex Gold.