Physical Risk
Physical risk is the potential financial and operational impact on organisations from the direct effects of climate change, including extreme weather events, rising temperatures, and sea level rise.
What is Physical Risk?
Physical climate risks are divided into acute risks (event-driven, such as floods, storms, and heatwaves) and chronic risks (longer-term shifts, such as rising sea levels, changing precipitation patterns, and sustained temperature increases). Physical risks can damage assets, disrupt operations and supply chains, increase insurance costs, and reduce asset values. Climate scenario analysis models these risks under different warming pathways.
Practical Examples
A logistics company identifies 12 distribution centres at high flood risk, investing in flood defences and business continuity planning.
An agricultural company models the impact of changing rainfall patterns on crop yields across its supply chain regions.
How Climatise Helps
Climatise tracks site-level emissions data that feeds into physical risk assessments and helps organisations understand which locations have the highest climate exposure.
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