Physical Risk & Resilience

This indicator assesses whether the entity has processes in place to understand and manage physical risks that could disrupt operations. Strong physical risk management helps protect asset resilience and continuity of service, reducing the likelihood and impact of climate- and weather-related disruption.

Select ‘Yes’ or ‘No’. If ‘Yes’, provide context to support the interpretation of the entity’s responses to this aspect’s indicators.

Open text box: The content of this open text box is not used for scoring, but will be included in the Insights and Benchmark Reports. Participants should use this open text box to provide further details, context, or comments related to the subject.

Terminology

Physical climate-related risks

Physical risks emanating from climate change can be event-driven (acute) such as increased severity of extreme weather events (e.g., cyclones, droughts, floods, and fires). They can also relate to longer-term shifts (chronic) in climatic patterns such as precipitation and temperature changes.

Physical climate-related resilience

The ability of the entity to withstand, adapt to, and recover from climate-related risks and impacts over time.

No evidence required.

This indicator assesses whether the entity has processes in place to understand and manage physical risks that could disrupt operations. Strong physical risk management helps protect asset resilience and continuity of service, reducing the likelihood and impact of climate- and weather-related disruption.

Select ‘Yes’ or ‘No’. If 'Yes', select all applicable sub-options.

Other: State the other process(es) the entity has in place. Ensure that the other answer provided is not a duplicate of the selected option above.

Terminology

Incident

An unplanned, undesired event with actual or potential adverse impacts.

Material

Information is material if omitting, misstating, or obscuring it could reasonably be expected to influence decisions that primary users of general-purpose financial reports make based on those reports, which include an entity's relevant environmental, social, or governance disclosures.

Materiality assessment

The process for determining and prioritizing which environmental, social, and governance issues are material to an entity.

Physical climate-related risks

Physical risks emanating from climate change can be event-driven (acute) such as increased severity of extreme weather events (e.g., cyclones, droughts, floods, and fires). They can also relate to longer-term shifts (chronic) in climatic patterns such as precipitation and temperature changes.

Risk mitigation

Risk mitigation refers to the process of implementing strategies, controls, or actions to reduce the likelihood of identified risks occurring or to minimize their potential impact if they do occur. It involves proactive planning and resource allocation to address vulnerabilities and build resilience against potential threats to an organization's operations, assets, or objectives.

Resilience

Resilience refers to the ability of systems, organizations, or communities to withstand, adapt to, and recover from environmental, social, or economic disruptions while maintaining essential functions. It involves building adaptive capacity, diversifying resources and strategies, and creating flexible systems that can respond effectively to challenges like climate change, resource scarcity, or supply chain disruptions.

Scenario analysis

Scenario analysis refers to the systematic use of scenarios in order to better understand the relevant impacts on an organization, and facilitate the creation of robust strategies under probable and potential future developments. It can help the participant to inform their financial planning process and provide insights into their strategies’ resilience to different climate-related scenarios.

Value enhancement assessment

The process for evaluating how sustainability-related actions, initiatives, or improvements may enhance an entity’s long-term value.

Vulnerability to physical risk

The extent to which an entity is exposed and sensitive to adverse impacts from acute or chronic physical climate-related hazards.

Evidence

The evidence provided will be subject to manual validation.

The evidence should support each of the selected issues. The provided evidence must cover the following elements:

• Scoping & data gathering inputs: any document section showing scope/objective + hazards/time period/projections approach + required inputs/data sufficiency.

• Materiality assessment (current): any output indicating physical + financial materiality thresholds / severity logic applied to quantify vulnerability.

• Materiality assessment (future): same as above plus explicit use of projected climate change / scenarios / horizons.

• Resilience building: any list of adaptation options tied to hazards, with costs/benefits and/or where intervention occurs.

• Value enhancement assessment: any indication of an “investment case for resilience” and/or insurability optimization and/or risk/reward sharing framing.

Other Answer

The other answer(s) provided will be subject to manual validation.

State the other process and ensure that the process is a formal and documented component of the entity's physical climate risk and resilience management approach.

The scoring of this indicator is equal to the fraction assigned to the selected option, multiplied by the total score of the indicator.

Evidence: For selections subject to manual validation, the validation status acts as a multiplier to determine that selection's final score.

If any requirements are not met, the evidence may not be accepted, depending on the level of alignment with the requirements.

Other: The 'Other' answer is manually validated and assigned a score, which is used as a multiplying factor, as per the table below:

​Scoring Basics