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Understanding Climate Risk

A systematic approach to identifying and analyzing climate-related threats

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Section 1 of 5

Introduction

Hazard Analysis

Vulnerability Mapping

Risk Quantification

Key Takeaways

What Is Climate Risk Assessment?

Climate risk assessment is the systematic process of identifying, analyzing, and evaluating the potential adverse effects of climate change on people, assets, ecosystems, and systems.

🎯Why It Matters

Informed decision-making requires understanding what climate risks you face, how severe they are, and which are most urgent to address.

📊The Goal

Translate complex climate science into actionable insights about specific risks to specific assets, communities, or operations.

🔄Iterative Process

Risk assessment isn't one-and-done. Climate science evolves, vulnerabilities change, and adaptation actions alter the risk landscape.

Climate Risk Equation

Risk Formula

Risk = Hazard × Exposure × Vulnerability

⚠️Hazard Intensity5/10

Severity and frequency of climate hazards (floods, droughts, heat waves)

🎯Exposure Level5/10

People, assets, and systems present in hazard-prone areas

🛡️Vulnerability Index5/10

Sensitivity to harm and capacity to adapt or cope with impacts

Overall Climate Risk

1.0/10

Low Risk

Interpretation: Manageable risk. Standard adaptation measures sufficient.

The Three Pillars of Climate Risk

⚠️1. Hazard: The Climate Threat

Climate hazards are the physical events or trends driven by climate change.

Acute hazards: Extreme weather events like floods, hurricanes, heat waves, wildfires

Chronic hazards: Long-term shifts like sea-level rise, temperature increase, changing precipitation

🎯2. Exposure: What's in Harm's Way

Exposure is the presence of people, assets, infrastructure, or natural systems in places where climate hazards occur.

Coastal cities exposed to sea-level rise and storm surge
Agricultural regions exposed to drought and extreme heat
Infrastructure exposed to flooding and landslides
Supply chains exposed to climate disruptions

🛡️3. Vulnerability: Susceptibility to Harm

Vulnerability reflects how sensitive a system is to climate impacts and its capacity to cope, adapt, or recover.

SensitivityHow susceptible to damage (e.g., elderly more sensitive to heat)

Adaptive CapacityResources and ability to adjust (e.g., wealth, technology, institutions)

Coping CapacityAbility to manage immediate impacts (e.g., emergency response, insurance)

Remember:

You can have a severe hazard with low risk if exposure or vulnerability is low. Conversely, even moderate hazards can create high risks when exposure and vulnerability are high. This is why adaptation focuses on reducing exposure and vulnerability, not just the hazard itself (which is often beyond local control).