Physical risks: concepts, classifications and the regulatory landscape

Measuring the financial impact of exposure to physical risks has become a major concern. For financial institutions, this is a real challenge, as they must contend with heterogeneous data, scenarios that vary from one model to another, and indicators whose methodology is sometimes unclear.

To help them properly account for the financial materiality of physical risks, WeeFin’s Expertise team has published a new technical fact sheet to set out the fundamentals, map the applicable regulatory requirements and provide a better understanding of how to overcome the main obstacles.

Download the technical fact sheet to structure your approach to physical risks.

What you’ll find

• Precise definitions of the different categories of physical risks.
• Real-world examples of financial consequences: damage to assets, insurability, business interruption, water stress, productivity, and how these translate into credit, market, underwriting, liquidity and operational risks.
• The seven obstacles to overcome for reliable measurement.
• A comparative table of eight regulatory frameworks.