Assessing Physical Risks from Climate Change: Do Companies and Financial Organizations Have Sufficient Guidance?

The paper evaluates physical climate risk guidance from six major disclosure initiatives (CDP, CDSB, NFRD, GRI, SASB, and TCFD) against IPCC standards. It finds significant gaps in terminology, hazard coverage, and the availability of quantitative metrics, suggesting that private sector entities may be overlooking critical risks. The authors propose the development of open-source scientific translations, peer-reviewed datasets, and a standardized science-based risk assessment framework to improve corporate resilience and financial decision-making.

• Existing disclosure guidance lacks consistent terminology and does not align with the IPCC's physical risk function, which defines risk as the interaction of hazards, exposure, and vulnerability.
• There is a significant gap in the coverage of physical climate hazards within disclosure guidance; while sea level change, water stress, and sustained temperature rise are well-covered, other hazards are entirely absent.
• Most disclosure initiatives fail to provide a comprehensive set of metrics for quantifying the different factors of physical climate risk, with 16 of the 18 identified IPCC hazards lacking hazard-specific metrics.
• Water stress and flooding are the only hazard areas with extensive sets of metrics and data sources cited across the analyzed initiatives.
• The lack of robust, standardized guidance may lead to unmanaged risks and financial losses for companies and financial organizations relying on these resources.
• The authors recommend the creation of an open-source, science-based framework that includes a standardized taxonomy of hazards and methods to quantify exposure and vulnerability.

APA

Pinchot, A., Zhou, L., Christianson, G., McClamrock, J., & Sato, I. (2021). Assessing Physical Risks from Climate Change: Do Companies and Financial Organizations Have Sufficient Guidance? World Resources Institute. https://files.wri.org/d8/s3fs-public/assessing-physical-risks-climate-change.pdf

Chicago

Pinchot, Ariel, Lihuan Zhou, Giulia Christianson, Jack McClamrock, and Ichiro Sato. Assessing Physical Risks from Climate Change: Do Companies and Financial Organizations Have Sufficient Guidance? World Resources Institute, 2021. https://files.wri.org/d8/s3fs-public/assessing-physical-risks-climate-change.pdf.

Wikipedia

{{cite report |last1=Pinchot |first1=Ariel |last2=Zhou |first2=Lihuan |last3=Christianson |first3=Giulia |last4=McClamrock |first4=Jack |last5=Sato |first5=Ichiro |title=Assessing Physical Risks from Climate Change: Do Companies and Financial Organizations Have Sufficient Guidance? |publisher=World Resources Institute |date=February 2021 |url=https://files.wri.org/d8/s3fs-public/assessing-physical-risks-climate-change.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{pinchot2021assessing, author = {Pinchot, Ariel and Zhou, Lihuan and Christianson, Giulia and McClamrock, Jack and Sato, Ichiro}, title = {{Assessing Physical Risks from Climate Change: Do Companies and Financial Organizations Have Sufficient Guidance?}}, institution = {World Resources Institute}, year = {2021}, month = feb, url = {https://files.wri.org/d8/s3fs-public/assessing-physical-risks-climate-change.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }