CONTENTS
CVaR, or Climate Value at Risk, is a metric that estimates the potential financial loss to an asset or portfolio caused by future climate hazards like floods, droughts, or extreme heat. It translates physical climate risk into monetary impact.
Example in context
You’re working with a real estate investor reviewing acquisitions in Southern Europe. They ask for CVaR data to understand how future drought and wildfire risk could affect long-term asset value — helping them compare investment options and avoid costly surprises.
Why it matters
CVaR helps decision-makers turn abstract climate hazards into concrete financial terms. It’s especially useful for investment teams and insurers evaluating long-term exposure, or consultants preparing CSRD-aligned reports that include physical risk metrics. EarthScan calculates CVaR using return periods, climate scenarios, and asset attributes.
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