Physical Risk Guide for Asset Owners and Asset Managers
Preview
Translating physical climate risk analysis into portfolio decisions requires clear accountability and consistent execution across functions. The challenge is that investment, risk, sustainability and reporting teams each approach it from different starting points and priorities.
This guide is designed to meet each of them where they are, covering the full arc of physical risk integration in one place.
What’s inside:
- How to measure and monitor portfolio exposure to physical climate hazards, starting with asset location and building to a full geographic picture
- A three-step materiality workflow using real company examples for identifying and prioritizing the risks most likely to affect financial outcomes
- Practical guidance on integrating physical risk into investment strategy, risk management and oversight across teams
- A Hazard Adaptation Matrix (HAM) for evaluating company preparedness and identifying which holdings to engage first
- How to align physical risk analysis with evolving regulatory and stakeholder expectations, including ISSB IFRS S2 and ESRS E1
Measuring physical risk is only part of the challenge. Connecting that analysis to portfolio decisions, consistently across functions, is what this guide is designed to support.
.svg)
Source: MSCI Sustainability and Climate Research, March 2026.
Read the full paper
Provide your information for instant access to our research papers.
Is Physical Risk Financially Material?
Physical risk is pricing into equities now, not in future scenarios. In this piece, we examine how hurricane exposure affected listed company performance and what it means for investment decision-making.
Hidden in Plain Sight: Physical Risk in Asset Owner Portfolios
Where assets are located matters. MSCI and Swiss Re Risk Data Solutions uncover how physical hazards are reshaping asset-owner portfolios — and how insight can drive resilience.
The content of this page is for informational purposes only and is intended for institutional professionals with the analytical resources and tools necessary to interpret any performance information. Nothing herein is intended to recommend any product, tool or service. For all references to laws, rules or regulations, please note that the information is provided “as is” and does not constitute legal advice or any binding interpretation. Any approach to comply with regulatory or policy initiatives should be discussed with your own legal counsel and/or the relevant competent authority, as needed.