Addressing challenges of physical climate risk analysis in financial institutions

As the financial cost of climate hazards such as flooding and heat stress rises, investors are looking for more transparency and precision in physical climate risk assessment tools. The ClimINVEST research project aimed to improve the level of knowledge and transparency in physical risk assessments. Bringing climate scientists and financial actors together, we focused on the following questions: • what information on physical risks is available for investors? • how can investors better secure the value of their portfolios against physical climate risk? • what risks require immediate attention from investors? Early on in the project key challenges identified by financial stakeholders included the lack of awareness and capacity within their institutions to understand and take steps to manage the risk of climate change impacts. To support capacity building and integration within financial institutions the ClimINVEST project has developed publicly available resources including an interactive online platform with indicators, maps, case studies, videos, and factsheets. The ClimINVEST project has taken steps towards improved transparency and information flows, but we still have further to go in developing transparent and systematic approaches. We look forward to further collaborative efforts with the financial sector as we prepare for our changing climate.