Organizations Involved: Vanderbilt Law School Energy, Environment, and Land Use Program
Source: Vanderbilt Law Research Paper
Abstract
This white paper examines the concept of corporate physical climate risk and how it is reported in company disclosures. First, the paper presents the emerging market of climate analytics and how various firms in this market purport to measure physical climate risk. Next, the paper examines the current state of governance of physical climate risk disclosure, looking at both the physical risk reporting frameworks developed by private institutions and the public disclosure requirements that have emerged in their wake. The paper also provides examples of federal laws that already require regulated entities to consider physical risk more generally; those existing laws may signal how regulators will approach physical risk in new contexts. Lastly, the paper synthesizes these governance approaches to physical risk and the state of the risk-calculation industry both to explore how to conceptualize corporate physical climate risk and to identify the lingering challenges that exist for defining physical risk.
