Physical climate risks: how to assess them site by site
Floods, heat, drought and landslides: the assessment of exposure by site, the climate scenarios and the intervention priorities.
Physical climate risks are the direct effects of the changing climate on the company's activities: floods that stop the plant, heatwaves that inflate energy costs, droughts that hit supplies. Banks and insurers already assess them; companies that measure them first negotiate from a better position.
Acute risks and chronic risks
A distinction is made between acute risks, one-off extreme events (floods, storms, landslides), and chronic risks, gradual changes (rising average temperatures, water stress, sea-level rise). Both are assessed per site: the same company can have a warehouse in a flood zone and offices without relevant exposures.
The method: exposure, scenario, horizon
The assessment crosses three elements: the location of each site (real coordinates, not the municipality), the recognised climate scenarios that describe how the hazards evolve, and the time horizons (short and long term). The result is an exposure score by hazard and by site, with the intervention priorities.
Envify runs this analysis automatically on the sites uploaded in the platform, with output ready for the ESG VSME report and for the bank requests.
What to do with it, in practice
Three immediate uses. Reporting: the Comprehensive module of the VSME and the bank questionnaires ask precisely for this analysis. Insurance: knowing the exposure before the policy renewal avoids surprises on premiums. Investments: the priorities per site guide where to intervene first, from draining the yard to cooling the warehouse.
Physical climate risk is assessed site by site, on real coordinates and recognised scenarios. A generic judgement at company level serves neither the bank nor the operational decisions.
