The
Climate
Risk
Matrix,
developed
by
the
Intact
Centre
on
Climate
Adaptation,
is
a
tool
that
institutional
investors
can
use
to
identify
material
physical
risks
that
investee
companies
face
from
climate-related
extreme
weather
events.
Led
by
the
Intact
Centre
on
Climate
Adaptation
in
the
Faculty
of
Environment,
the
Global
Risk
Institute
and
Stanford
Global
Projects
Center
(Stanford
University),
a
global
survey
of
institutional
investors
managing
$2-trillion
(U.S.)
identified
a
need
for
concise
and
interpretable
information
regarding
risks
portfolios
face
from
physical
climate
change.
In
response,
many
of
these
investors
are
looking
to
a
new
risk-assessment
tool,
the
Climate
Risk
Matrix
(CRM).
The CRM, developed by the Intact Centre, is a tool that institutional investors can use to identify material physical risks that investee companies face from climate-related extreme weather events.
Globally, the Task Force on Climate-Related Financial Disclosures (TCFD), central banks and financial regulators warn that climate change threatens the stability of financial markets, and they advise that mandatory disclosure of climate-related risks is on the horizon. They are calling for a global, standardized method to assess such risks.
As highlighted by Sonia Baxendale, President and CEO of the Global Risk Institute, “Climate change is a risk, not only to our environment but to the long-term stability of our economy and global financial system. Investors need to understand the physical and transition risks that climate poses to their portfolio companies.”