Physical Risk
From Open Risk Manual
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Definition
Physical Risks are typically defined as risks which arise from the physical effects of climate change and environmental degradation. [1]
They can be categorised either as acute - if they arise from climate and weather-related events and an acute destruction of the environment, or chronic - if they arise from progressive shifts in climate and weather patterns or a gradual loss of ecosystem services.
Examples
Issues and Challenges
The definitions of physical risks vary among international organisations, central banks, supervisors, policymakers and researchers
References
- ↑ EBA Report: On Management and Supervision of ESG Risks for Credit Instituions and Investment Firms, EBA/REP/2021/18