Assessing Climate Risk, Framing Resilience, and Reporting Impact

This guide by the Climate Policy Initiative (CPI) provides a framework for climate finance practitioners to manage physical climate risks and design investments that enhance climate resilience. It outlines a three-goal process: assessing and managing climate risk to meet international standards, defining a clear adaptation investment thesis to secure funding, and designing impact measurement strategies to track resilience outcomes.

• Climate risk management is essential for financial vehicles to protect business performance, avoid maladaptation, and comply with global standards. Proactive management reduces exposure to climate shocks and aligns vehicles with private investors, as 200 of the largest companies have estimated over USD 1 trillion in climate change-related financial risk.
• The International Sustainability Standards Board (ISSB) Standards serve as the global baseline for climate-related financial disclosure. These standards, which deepen the pillars established by the Task Force on Climate-related Financial Disclosures (TCFD), are being mandated or aligned with in jurisdictions including Canada, France, Germany, Singapore, and the UK.
• CPI recommends a five-step process for assessing and managing physical climate risk: listing end-users, assets, and supply chain nodes; determining geographic bounds; identifying climate hazards (acute and chronic); narrowing down material hazards; and building a risk management plan. The guide emphasizes using multiple climate scenarios, such as RCP4.5, RCP6, or RCP8.5, to avoid underestimating risk.
• An adaptation thesis is a clear, evidence-backed narrative that links identified climate hazards and beneficiary vulnerabilities to a specific intervention. For vehicles seeking Multilateral Development Bank (MDB) funding, theid the thesis must demonstrate that the context of vulnerability is set out, there is an explicit intent to reduce it, and a direct link exists between project activities and those vulnerabilities.
• Measuring adaptation impact is challenging due to context la little11sne the context-specific nature of1 and the difficulty of measuring counterfactuals. CPI suggests a framework based on a Theory of Change, linking activities to outputs, outcomes, and broader impacts, while prioritizing data that is realistically and affordably collectable.
• CPI'1's Global Innovation Lab for Climate Finance and the Catalytic Climate Finance Facility have supported over 40 adaptation-relevant financial vehicles. Examples include parametric insurance for wildfires, debt facilities for climate-smart agri-SMEs, and a 'Cooling as a Service' model that addresses extreme heat risk.

APA

Richmond, M., Maguire, L., & Sherikar, P. (2026). Assessing Climate Risk, Framing Resilience, and Reporting Impact. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2000/01/Adaptation-and-Climate-Risk-Primer.pdf

Chicago

Richmond, Morgan, Liam Maguire, and Pallavi Sherikar. Assessing Climate Risk, Framing Resilience, and Reporting Impact. Climate Policy Initiative, 2026. https://www.climatepolicyinitiative.org/wp-content/uploads/2000/01/Adaptation-and-Climate-Risk-Primer.pdf.

Wikipedia

{{cite report |last1=Richmond |first1=Morgan |last2=Maguire |first2=Liam |last3=Sherikar |first3=Pallavi |title=Assessing Climate Risk, Framing Resilience, and Reporting Impact |publisher=Climate Policy Initiative |date=January 2026 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2000/01/Adaptation-and-Climate-Risk-Primer.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{richmond2026assessing, author = {Richmond, Morgan and Maguire, Liam and Sherikar, Pallavi}, title = {{Assessing Climate Risk, Framing Resilience, and Reporting Impact}}, institution = {Climate Policy Initiative}, year = {2026}, month = jan, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2000/01/Adaptation-and-Climate-Risk-Primer.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }