Climate Assessment Use Cases for Corporate Issuers

Here is a strong example from Nestlé of how to assess and identify physical climate risks that are relevant for an industry with global operations. In its Non Financial Statement 2025, Nestlé presents a modeled analysis of projected crop yield changes by 2040 compared to 2024 under an intermediate emissions scenario. The visualization maps expected increases or decreases in yields across key raw materials and sourcing countries. It covers commodities such as coffee, cocoa, maize, wheat, dairy and palm oil, and links them to specific geographies. The analysis shows how changes in temperature, precipitation patterns and extreme weather events can alter growing conditions. As a result, certain regions may experience yield reductions, while others may see moderate increases. For a company that relies on agricultural inputs across multiple continents, these shifts translate directly into supply availability risks, cost volatility and sourcing complexity. This is not a generic climate narrative. It is a forward looking assessment of commodity exposure. By modeling yield impacts at country and crop level, the company can identify where supply chains are most vulnerable and where strategic adjustments may be required. Consequently, physical climate risk becomes a procurement and capital allocation issue. It affects long term contracting, supplier engagement, regenerative agriculture investments, water management and geographic diversification. In other words, climate resilience must be embedded in core business planning, not treated as a separate sustainability topic. This example illustrates how climate risk assessment can move from disclosure to decision making. Source: Nestlé, Non Financial Statement 2025 

California's #SB261 - the climate risk disclosure law - is in abeyance as the 9th Circuit considers a request for a preliminary injunction that would stop the California Air Resources Board (#CARB) from enforcing the law while the lower courts work through constitutional challenges to the law. Notwithstanding the 9th Circuit's temporary stay of enforcement, many companies have voluntarily submitted their climate risk reports in CARB's public docket. What do these reports reveal? Across sectors, companies are describing both acute and chronic physical risks: extreme storms, flooding, wildfires, heatwaves, long term temperature rise, water stress, and sea level rise. They are addressing these as concrete threats to assets, operations, and communities. Many companies map those risks to specific locations and asset types such as coastal facilities exposed to storm surge, Western operations facing wildfire and extreme heat, and water dependent operations subject to drought. Physical climate risk data such as models provided by First Street have been used to evaluate how much of a portfolio or a company's critical operations are subject to elevated physical climate risks and to prioritize resilience investments and enterprise risk planning. Importantly, a number of companies have translated this analysis into financial terms - pointing to higher insurance costs or reduced insurability, capex for hardening or relocating assets, potential asset write downs, and increased operating expenses for cooling, backup power, and redundancy. Many other companies who have not yet posted their SB 261 climate risk reports surely have performed similar assessments and are working to build their resilience. There clearly is greater awareness of climate risk than there was even a year ago in the corporate space - even if these reports sit within the walls of companies for now. This awareness is good and surely will lead to greater resilience and integration with enterprise risk management and disaster recovery programs. #Climaterisk #PhysicalClimateRisk #CaliforniaClimate

🙅♀️ “Avoided emissions claims cannot be trusted.” That’s what we often hear: they’re not robust, not comparable, and therefore impossible to use seriously in financial evaluations or target setting. 🌍 This is exactly why we created Climate Dividends. An extra-financial indicator and mechanism that turns avoided emissions into standardised and verified data, making them finally usable in financial decision-making. 💰But how to objectify #Climate #Positive #Impact in #Investment #decisions and #DueDiligence? -> that’s what our new White Paper “Rethinking Climate Metrics” does, via financial use cases. 📊 Discover 3 key ratios to integrate climate performance into investment processes: 1️⃣ Climate Dividends Efficiency (CDE) measures real #climate #efficiency: CO₂e “spent” but for what impact? 2️⃣ Climate Dividends Intensity (CDI) aligns revenues with #climate #impact. 3️⃣ Climate ROI (C-ROI) compares #climate #performance across different investments. 💡With case studies (Eurazeo Team for the Planet ADEME Investissement Portzamparc Groupe BNP Paribas CVE (Changeons Notre Vision de l'Energie) ACORUS), best practices, and practical tools. 👉 Download the White Paper: link in comments! Many thanks to all those who collaborated with us for this big work Erwann Le Ligné Audrey LAMBRY Samuel Vionnet Mathieu Joubrel Guillaume Coqueret Noelia Pacharotti Jérémy Rasori Damien Didier Ronan LE MOGUEN Fabio Lancellotti Stefano Bonelli, PhD Annelyse Potié Anthonin David Clémence Lacharme Alice PÉGORIER Karine Mérère Clémentine de Butler Philippe Benquet &Yohan Rossetto Marion Henriet Mehdi Coly Denis GALHA GARCIA Arthur Auboeuf, and of course Laura Beaulier for coordinating all this brain effort!

How do you compare similar, regional utility companies on their climate risk? The Answer: Climate Analytics on Spatial Portfolios Current methodologies to analyze climate risk tend to be bespoke and costly, making it challenging to analyze multiple companies consistently. Like all of you, I’ve been reading all about the ESG bashing. Now is the time for greater transparency in environmental and climate risk metrics. Data-driven analysis for climate resilience is only effective when connected to meaningful, transparent metrics derived from performant physical climate risk projections at high spatial resolution.   In our most recent white paper from Sust Global in partnership with Spatial Risk Systems, we introduce a knowledge-graph-based approach for analyzing spatial-level risk at a portfolio, sector, or index level. This significantly eliminates the complexity and expense of organizing the data for spatial-level analysis.    Through an end to end example of this workflow applied to the US #utilitiesindustry, we unpack hidden risk from future extreme climate events across 3 leading US #utilities issuers. Using a knowledge graph-based approach, equity research and portfolio management teams can: 1️⃣ Identify concentrations of baseline (past) climate-related risks at the issuer level. 2️⃣ Study correlations between electric utilities' financial performance and baseline climate-related risk impact at the issuer level. 3️⃣ Identify future concentrations of climate-related risks to portfolios of issuers over near-term (12-36 months) and long-term (5+ year) windows. 4️⃣ Evaluate the weighting of issuers across the portfolio by accounting for climate risk as an additional risk factor. 5️⃣ The ability to leverage a single turn-key warehouse solution that can quickly yield insights eliminates the time and costs of data onboarding and preparation to conduct the analysis. Please follow the link below to access the White Paper: Beyond Opaque ESG Metrics Ken Zockoll | Alex Vengerovsky | Josh Gilbert | Charlie Sidles #portfoliomanagement #portfolioconstruction #spatialanalysis #spatialdata #spatialintelligence #geospatialinnovation #climaterisk

Physical climate risk is now an investment risk—not a future one 1. Increasing frequency and intensity of floods, heatwaves, storms and droughts are directly affecting asset valuations, operating expenses, insurance costs and creditworthiness. Investors can no longer treat climate impacts as long-term externalities; they are material risks today. 2. Asset-level vulnerability is becoming clearer—and more costly High-resolution climate modelling (like First Street) now shows how specific facilities, supply chain nodes, retail sites, and infrastructure assets are exposed. Even resilient manufacturing facilities can face regional ecosystem collapse, supply disruption, or infrastructure failure that interrupts operations. Climate events may damage assets temporarily, but valuation recovery lags, creating long-term financial drag. 3. Risk assessment is shifting from qualitative to data-driven Institutions are increasingly integrating top-down portfolio exposure models (sector, region, hazard) with bottom-up company-level scoring (critical assets, revenue dependencies, adaptive capacity). Although data remains patchy and non-standardised, investors are adopting third-party analytics, scenario models, and geospatial hazard data to build credible assessments. 4. Climate resilience is now a driver of competitive advantage Companies with strong adaptation measures—storm-resistant design, raised electrical systems, water-resilient floors, strengthened local infrastructure—show: Lower downtime Lower insurance costs More stable revenues Higher long-term asset values Investors increasingly reward issuers that quantify adaptation capex, demonstrate climate-ready supply chains, and disclose how they safeguard critical assets. 5. Identifying adaptation solutions unlocks new investment opportunities Moving from risk avoidance to opportunity spotting: Growing demand for green bonds focused on adaptation, climate-resilient infrastructure, water systems, flood defenses, resilient agriculture, and nature-based solutions. Adaptation-enabling businesses—those producing resilient materials, sensors, weatherproof systems—can outperform during climate volatility. Infrastructure, real assets, and utilities are well positioned to benefit from adaptation finance flows. 6. Integration into investment decision making is becoming standard practice Investors are embedding climate risk in: Due diligence and investment committees Discount rate adjustments for hazard probability Portfolio construction and manager mandates Engagement and stewardship dialogues Physical Climate Risk Assessments (PCRAs) increasingly influence design, structuring, and operations of investments—especially in real assets and infrastructure. Continued in the comment section below

Introducing the Climate Vulnerability Ranking Delivered as a one-page report, the Climate Vulnerability Ranking provides a concise, board-ready overview of corporate exposure to physical climate risk, grounded in rigorous scenario analysis incorporating billions of climate simulations. At the heart of the Ranking is a system that quantifies how many of a company’s physical assets are at elevated risk due to climate-driven hazards. This risk is assessed relative to industry peer group and across a universe of 13,000 global companies. To generate the Ranking, RiskThinking.ai’s Climate Digital Twin (CDT™) platform conducts geo-specific analyses of over 6 million material physical assets these companies own and operate worldwide. Each asset is classified based on tail-risk exposure identified through multi-hazard stress testing, using the following four categories: Low Risk: Assets projected to have minimal exposure to physical climate hazards, with low potential for disruption to operations or value. At Risk: Assets projected to face moderate exposure to physical climate hazards, potentially requiring adaptation measures to maintain resilience. Stressed: Assets projected to face significant climate-related disruptions, likely requiring targeted adaptation strategies to preserve functionality and value. Stranded: Assets projected to face climate-related damages exceeding their replacement cost, rendering continued operation potentially more costly than beneficial without substantial adaptation efforts. Companies are ranked according to the share of their physical assets classified as Stressed or Stranded due to climate-driven hazards. This methodology enables meaningful comparisons across firms of varying sizes and highlights the relative intensity of exposure both within and across industry peer groups. The Rankings are provided as a global index of corporate physical risk, with each company’s position reflecting its relative standing among the CDT’s company universe. Using our platform, users can customize and re-index the rankings by global industry sectors, market indices, headquarters country, or any combination of filters relevant to portfolio construction or risk assessment. Create a Custom Report Download and complete the Sample Form below to create a custom Climate Vulnerability Ranking at no cost. For all other inquiries, get in touch at cdt@riskthinking.ai #rankings #climate #corporations #IFRS