Module 1: Physical Risks

Module Overview

Physical risks arise when climate-related hazards (extreme weather events, wildfire, sea-level rise, etc.) interact with vulnerable human and natural systems. When those risks materialize, they can have a range of financial impacts on an organization, including (for example): direct costs for restoration and repair, lost sales revenues, declining consumer demand, and increased financing and insurance costs.

In this module, we’ll use case study examples to explore physical risks of climate change for private and public organizations in the face of a range of potential climate hazards. We’ll explore both direct physical risks (i.e., those related to an organization’s own vulnerabilities) and indirect risks (i.e., those that materialize elsewhere in an organization’s value chain, such as with its suppliers, transportation infrastructure, consumers, etc.)