From Risk to Resilience: What Investors Expect from Companies on Physical Climate Risk

As the physical impacts of climate change intensify, investors are demanding stronger action from companies to assess and manage climate-related risks.

IGCC’s latest report — Investor Expectations of Companies on Physical Risk and Resilience — outlines what investors want to see from boards, executives and disclosure teams.

Key points:

• Physical risks are financial risks: Extreme weather and chronic climate shifts are already eroding asset values and disrupting supply chains — companies must treat these as core business risks, not sustainability issues.

• Investors expect board-level oversight: Governance of physical climate risk should sit clearly with the board, with clear accountability and capability to oversee resilience strategies.

• Integration into strategy and risk management: Companies should map and model physical risks across assets and operations, integrate findings into financial planning and capital allocation, and disclose adaptation actions taken.

• Transparent disclosure matters: Investors want clear, comparable data on how companies are assessing risks, prioritising material exposures, and measuring resilience outcomes — aligned with TCFD/ISSB standards.

• Resilience is an opportunity: Strengthening adaptation strategies can help protect long-term value, secure insurance, and maintain investor confidence in a more volatile climate.

Why it matters:
With mandatory climate reporting on the horizon, companies that proactively manage physical risks will be better positioned to attract capital, maintain market confidence, and support an orderly transition to a resilient net zero economy.

Read now