How do Europe’s large listed companies handle physical climate risk? We ran Klever’s physical risk questionnaire on the latest annual and/or sustainability reports of 596 STOXX Europe 600 companies.
65% have assessed physical risk
65% of Europe’s 600 largest companies have analysed physical risk with their facilities’ location data. 66% of those that have done that assessment found physical risk material. Fewer go further. 19% have modelled potential losses in numbers, and 12% report losses that already happened.
RCP 8.5 is the default scenario
Among the 390 companies with an assessment, 82% use the high emissions scenario RCP 8.5. 44% also test the low emissions RCP 2.6. 46% include their supply chain.
57% combine their own team with outside help. Only 6% leave the work fully to a third party.
Heat is assessed most, floods turn material most
Heat stress is the most covered hazard. 81% of assessments include it. River flood comes second. It is also the hazard most often found material: 49% of the companies that assess it say it matters.
Few put a figure on losses
71 companies say physical events have already cost them money. Only 19 give an amount. Together these losses add up to €6.2 billion. The median is €79 million and the largest single loss €1.8 billion. Business disruption and asset damage are the most common losses.
Adaptation starts with planning
48% of companies have invested in adaptation. Early warning and business continuity planning come first. Flood protection and insurance follow. Only 31 companies say how much they spent. Together that is €1.6 billion, with a median of €3 million.
Spain leads, the UK trails
Practice varies by country. 93% of Spanish companies have assessed physical risk. In the UK, the largest group in the sample, the share is 46%.
