2023 – Intact Centre on Climate Adaptation

Climate risk refers to the magnitude of a peril (e.g., flooding, wildfire, etc.) positioned relative to its probability of occurrence (including tail risk). Due to escalating climate change impacts, institutional investors must incorporate climate risk into portfolio management to satisfy fiduciary duty.

To meet this duty, this report presents Climate Risk Matrices (CRM). CRMs identify industry-specific top tier climate perils, their impacts, and risk mitigation strategies, that institutional investors should consider when deciding to include, exclude or adjust the weighting of a company in a portfolio.

The report presents a risk management protocol that can help financial market participants with 1) incorporating physical climate risk into investment decision-making and disclosure and 2) guide the implementation of adaptation measures across industry sectors.

Go to resource: Transitioning from Rhetoric to Action: Integrating Physical Climate Change and Extreme Weather Risk into Institutional Investing