Use case · Lender climate-risk diligence
“How is physical climate risk managed across your sites?”
A lender asking about physical climate risk is looking beyond whether a hazard exists. The useful answer connects site-level exposure with potential business consequences, existing controls, planned resilience measures and the organization’s ability to manage changing risk over time.
Four parts of a decision-useful answer
Where is the business exposed?
Identify the locations, assets and operations that matter, and screen the physical climate hazards relevant to them.
How could that exposure affect the business?
Connect physical impacts to downtime, revenue, costs, supply continuity, capital requirements or other consequences relevant to the financing decision.
What is already being managed?
Document existing physical, operational and management measures rather than starting from the assumption that the business has done nothing.
One evidence base, framed for a credit conversation
We structure the underlying climate-risk work so that the lender-facing summary is concise, traceable to the analysis and proportionate to the financing question. The same evidence may also support insurer or buyer conversations where requirements overlap.
What happens next?
Set out material gaps, priority actions and the process for reviewing whether additional adaptation is required.
Frequently asked questions
What climate-risk information might a lender ask for?
The exact request varies, but useful evidence can include material locations and assets, relevant physical climate hazards, potential business impacts, existing controls, planned resilience measures and how the organization oversees the risk.
Do SMEs need the same climate analysis as large companies?
Not necessarily. The analysis should be proportionate to the business, financing decision and materiality of the exposure. A smaller organization can still provide disciplined evidence without reproducing the climate-risk systems of a large financial institution.
Can this work support refinancing or a new facility?
It can provide evidence for climate-risk questions arising during financing discussions. Whether particular evidence is sufficient remains a decision for the lender.
Bring the lender’s question.
We will look at what they have asked, which sites or assets matter and how much analysis is proportionate to the financing decision.