Quantifying the Financial Impact of Physical Climate Risk for Financial Institutions

As global regulatory requirements evolve, financial institutions are increasingly called upon to assess the financial implications of physical climate risks in alignment with the Task Force on Climate-related Financial Disclosures (TCFD) or International Sustainability Standards Board (ISSB). Recent events, such as wildfires in California and floods in North Carolina, have underscored the tangible financial impacts of these risks on businesses and assets.

Climate change amplifies traditional financial risks like credit and market risks, potentially leading to broader economic instability through significant losses and asset repricing. Mitigating financial losses tied to physical and transition risk remains a top priority of global financial institutions. It is crucial for investors, banks, insurers, and Real Estate Investment Trusts (REITs) to evaluate the financial exposure across their portfolios and identify specific hotspots.

Join us for an insightful session where we will delve into the quantification of physical climate risk and its financial impact on financial institutions. Our discussion will cover:

• Analyzing physical climate risk across various asset classes
• Accessing asset-level information for equity and fixed income exposure
• Quantifying financial impact based on unique vulnerabilities of assets
• Translating physical risk impacts into probability of default and loss given default
• Incorporating adaptation strategies into risk mitigation plans