The European Banking Federation’s C-ESG Risk Roundtable has published a practical guide to help banks assess and model physical risk. Developed under the leadership of ING and BNP Paribas using the experience of 12 participating banks, it links hazards to physical and operational impacts, financial outcomes and banking risk. This focus complements the roundtable’s October 2025 roadmap for improving climate and environmental credit risk data and modelling.
The framework extends beyond damage to individual assets to capture disruption transmitted through supply chains, infrastructure, essential inputs and the wider economy. Practical guidance covers hazard and vulnerability modelling, including the use of proxies, supported by public datasets, tools and literature. Together, these resources provide a basis for identifying where adaptation, resilience and financial protection measures could change outcomes and assessing their potential costs and benefits. The report also identifies the integration of physical risks related to climate and nature as an area where practice needs to evolve.