Addressing challenges of physical climate risk analysis in financial institutions

This report summarizes the practical lessons and resources from a 3-year collaboration between climate experts and financial institutions for the ClimINVEST European research project. It explains how four major challenges were partly mitigated during the project:

1. the tragedy of the horizon;
2. the black box of climate services;
3. data accessibility;
4. the quantification of financial impacts.

The report also provides priority action points for financial institutions and their stakeholders. The report concludes that financial actors have a key role to play for the integration of physical climate risk in the financial sector. However, combined action of a broader range of actors is needed to quickly overcome the challenges.