CONTENTS
Physical risk refers to the potential for harm caused by climate-related hazards like floods, heatwaves, droughts, or windstorms. It includes both acute risks (e.g. extreme events) and chronic risks (e.g. long-term heat stress).
Example in context
You’re supporting a sustainability consultant preparing a CSRD report. One key section requires disclosure of physical risks to buildings in Spain, including exposure to heat and water stress over time. They use EarthScan to quantify these risks under different climate scenarios.
Why it matters
Understanding physical risk is fundamental to climate risk disclosure and asset resilience planning. Whether you're working on CSRD, TCFD, or investment due diligence, you need to know how climate hazards could affect the value, safety, or function of your assets.
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