Assessment of climate-related risks: A 6-step methodology

Climate risk assessment (CRA) builds the foundation for effective climate risk management (CRM). CRA aims to identify risks; assess the magnitude of impacts on people, assets, value chains, (critical) infrastructure, settlements and ecosystems; and ascertain the possible options for action. CRAs can support evidence-based and risk-informed decision making and planning in the context of climate change. Important characteristics of GIZ’s 6-step CRA methodology include: Participation of stakeholders in the risk assessment process; Matching information needs with a customised methodology that utilises various and appropriate methods and tools; Assessment of climate risks triggered by the entire spectrum of hazards from slow onset processes to extreme weather events; Estimation of risk tolerance levels of the concerned system (e.g. vulnerable households); Identification of a smart mix of risk management measures (e.g. from a range of tried and tested climate change adaptation and disaster risk reduction measures including risk finance and insurance schemes); Consideration of non-economic losses and damages beyond the evaluation of economic losses and damages; Integration of results into a CRM framework that encompasses monitoring and evaluation and supports continuous learning.