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Scenario Analysis

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Corporate disclosures on physical climate risks

Since 2017, when TCFD recommendations were published, thousands of companies have disclosed their physical climate risks and materiality analyses. What do these disclosures look like?

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Climate-related information for materiality assessment

Companies withdraw from certain areas because of floods, droughts, water scarcity, and wildfire risks. These risks don't have to be catastrophic at all, but simply recurrent and impactful.

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Scenario Analysis

High quality scientific climate risk assessment is GOLD. Timely awareness and communication of climate risks has no price.

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Supply Chain

In 2022 during extreme drought, the economic loss due to Mississippi River disruptions was estimated at $20 bn

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Integrating physical climate risk into credit risk modelling

Extreme weather catastrophically affects both borrowers and lenders. Statistics show that 40% of small businesses do not reopen after an inundation, and another 25% fail within a year. Additionally, homeowners fail to pay mortgages for 2 years following a flood, especially if they have no flood insurance

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Climate risk knowledge for strategic planning

Once risks are understood, strategic planning focuses on prioritizing urgent investments, establishing a timeline, and mobilizing finance for critical projects with high risk.

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Corporate risk management of Climate Risks

When a company is paying $1 M annually for flood insurance, it means (a) the risk is high, and (b) urgent preventive / anticipative action is needed to reduce financial expected loss and irreversible material damage.