Asset classes with long holding periods are at the forefront of these pressures, as climate variability affects operating costs, insurance availability, long term valuations and capital planning. Decision makers increasingly seek quantifiable and comparable metrics to understand how climate factors reshape risk-adjusted returns and capital allocation.

Many investors begin with high-level climate scores or ESG ratings that summarise company or sector exposure. While useful for screening, they rarely capture the complexity of real assets and climate dynamics. Two buildings in the same portfolio can experience entirely different climate trajectories depending on their location, asset type, and local regulations. Equally, industrial facilities in the same sector can face divergent levels of flood, heat or wind exposure due to micro-geography or adaptation measures. 

Aggregated corporate and sector-level views provide valuable context but are most effective when complemented by asset-level assessments that capture location-specific vulnerabilities. When asset-level granularity is missing, key operational dimensions, such as TICCS asset class representation, revenue exposure and location-specific climate hazards, are often insufficiently reflected. As a result, an entire sector may appear resilient despite notable underlying assets facing material disruption risk. Therefore, while high-level views often meet existing regulatory requirements, they offer limited insights into asset-specific value dynamics, constraining their usefulness for investment and portfolio analysis. 

This gap sets the stage for a more granular, scientific approach that connects climate science directly to asset-level realities.

Read the full ‘Thought Leadership’ article at the link below