Illustrative: an ensemble of trajectories, its quantile fan and the outcome as it is observed

Risk Academy, led by the Nexus Consortium · Finance and Economics · Department of Financial Markets and Investment

Physical and transition risk, scenario analysis, disclosure, nature dependencies and insurability

Climate and nature financial risk

Climate and nature financial risk covers how physical and transition climate risk and nature-related risk reach financial institutions and portfolios, and how they are assessed and disclosed.

01Scope

What the discipline covers

The subtopics its courses and labs teach.

Courses
In preparation
Levels
L2 Intermediate
Labs
Exposure lab, Trigger lab
  • Physical risk to portfolios
  • Transition risk
  • Climate scenario analysis
  • Climate-related disclosure
  • Nature-related dependencies
  • Adaptation and insurability
  • Transition plans
  • Data and model gaps

Courses in development extend the scope to further subjects: Nature-related risk assessment and disclosure; Nature as systemic financial risk.

02Maps

Build a twin of any place

Search any place or open the world; the layers and generators follow climate and nature financial risk on the planet map, the globe and in 3D.

Houston and the Ship Channel: a flat plan of the faculty twin. Terrain 0 to 66 m; 30 power plants, 11,875 MW; 7 refineries and chemical works; 2 port land; 29 named works; 154 named industrial sites; Surface water extent, OPERA DSWx (HLS): read live when the 3D twin opens; Built-up and settlement extent, HBASE 2010: read live when the 3D twin opens. Contours every 10 metres from the elevation grid; power plants as marks; refineries, terminals and industrial sites as marks.
Houston and the Ship Channel, United States. Flat plan of the same data: relief as contours from the inline grid, the plants by capacity, the industrial points by kind and the numbers below. The 3D twin opens on devices that can draw it, once its data and code have been checked.
  • Terrain 0 to 66 m
  • 30 power plants, 11,875 MW
  • 7 refineries and chemical works
  • 2 port land
  • 29 named works
  • 154 named industrial sites
  • Surface water extent, OPERA DSWx (HLS): read live when the 3D twin opens
  • Built-up and settlement extent, HBASE 2010: read live when the 3D twin opens
Credits and dates per layer are listed under the stage. Relief in the twin is exaggerated ×1.5 for legibility.

Drag to move, right drag or Shift with a drag to turn and tilt, Ctrl with the wheel to zoom. Keyboard: arrows move, Shift with arrows turn and tilt, + and – zoom, 0 resets, V steps through the views, Escape clears.

Flat plan of the same data: relief as contours from the inline grid, the plants by capacity, the industrial points by kind and the numbers below. The 3D twin opens on devices that can draw it, once its data and code have been checked.

The boundaries, names and designations shown do not imply any judgement on the legal status of any territory, or any endorsement or acceptance of such boundaries. Countries: Natural Earth (public domain).

03Live map

Habitat condition in Peru

Vegetation, land cover, fires and ocean productivity and warmth from NASA satellites, over Peru.

The interactive map needs JavaScript; the layer list and sources are below.

Layers 2

Habitat condition

Latest available

NASA GIBS / EOSDIS · ASTER GDEM (METI, NASA) · Blue Marble (NASA) · © OpenStreetMap contributors (ODbL) · Natural Earth

Loading the latest NASA imagery.

Drag to move. Ctrl or ⌘ and scroll, pinch or the buttons to zoom; hover for the values under the pointer; reset returns to the region.

Habitat condition, framed on Peru.Satellite and model products as NASA publishes them, each with its own date. They are indicators, not assessments of any place.

Data: NASA GIBS · ASTER GDEM · Blue Marble · © OpenStreetMap contributors · Natural Earth · NASA EONETSources and licences

  • We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS). Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • MODIS land products (vegetation indices, gross primary production, land cover), NASA LP DAAC and LANCE; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • NASA Fire Information for Resource Management System (FIRMS), VIIRS 375 m active fire product, NASA LANCE; vector tiles via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • GHRSST Level 4 MUR analyses, NASA Jet Propulsion Laboratory; distributed by the NASA Physical Oceanography DAAC (PO.DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • MODIS Aqua ocean colour, NASA Ocean Biology Processing Group; distributed by the NASA Ocean Biology DAAC (OB.DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • VIIRS near-real-time products (flood, land surface temperature, snow cover, corrected reflectance), NASA LANCE; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • ASTER GDEM is a product of METI and NASA (ASTER Global Digital Elevation Model V003, NASA LP DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). Cite as: NASA/METI/AIST/Japan Spacesystems and U.S./Japan ASTER Science Team (2019). ASTER Global Digital Elevation Model V003. doi:10.5067/ASTER/ASTGTM.003. NASA open data
  • Made with Natural Earth. Free vector and raster map data @ naturalearthdata.com. Public domain
  • © OpenStreetMap contributors (ODbL), via NASA GIBS (coastlines, boundaries, roads and place names). Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). ODbL
  • Blue Marble, NASA Earth Observatory; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into H3 cells where shown (modified). NASA open data
  • Context on the globe and flat map: coastlines, boundaries, roads and place names from NASA GIBS reference layers (OpenStreetMap data, ODbL, © OpenStreetMap contributors); Blue Marble imagery as an optional base; 3D terrain and the elevation read-out from the ASTER GDEM elevation colour index (5 m to 200 m classes, exaggerated for legibility). Boundaries are drawn as published and imply no position on any territory.
  • Globe: MapLibre GL JS 6.9.1, BSD-3-Clause, © MapLibre contributors.
  • Live events: NASA Earth Observatory Natural Event Tracker (EONET); events are indicative and keep their original source links.
  • NASA GIBS: We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS).
  • Optional layers (5 sources in the layer list: live, forecast, observed and context) print their provider credit on the map and here when switched on; forecasts are model output and derived indices are estimates.

Layers and dates

  • Enhanced vegetation index, rolling 8 days: MODIS Terra EVI, NASA LANCE · 13 Oct 2026
  • Active fires and thermal anomalies: VIIRS NOAA-20 375 m (FIRMS), NASA LANCE FIRMS · 13 Oct 2026
  • Land cover type (IGBP), yearly: MODIS Terra and Aqua land cover (MCD12Q1), NASA LP DAAC · 2024
  • Gross primary production, 8-day total: MODIS Aqua GPP (MYD17), NASA LP DAAC · 30 Sep 2026
  • Sea surface temperature anomaly: GHRSST MUR25, NASA JPL PO.DAAC · 12 Oct 2026
  • Ocean chlorophyll-a concentration: MODIS Aqua ocean colour, NASA OB.DAAC · 12 Oct 2026
  • True colour: VIIRS NOAA-20 corrected reflectance, NASA LANCE · 13 Oct 2026

04The subject

The subject, methods and measures and debates and bodies

The field and its scope

For risk, sustainability and disclosure staff in financial institutions, and for supervisors and analysts who need to assess how climate and nature risk reach portfolios and balance sheets.

05The method

From a carbon price to a probability of default: transition risk in a loan

A carbon price raises a high-emitting borrower's costs, lowers the value of its assets and shortens its distance to default; the lender reads the change as a climate-adjusted probability of default and acts on pricing, limits and engagement.

Sources: Battiston, Mandel, Monasterolo, Schutze and Visentin, A climate stress-test of the financial system (2017); Basel Committee on Banking Supervision, Climate-related risk drivers and their transmission channels (2021); Merton, On the pricing of corporate debt: the risk structure of interest rates (1974); Bolton, Despres, Pereira da Silva, Samama and Svartzman, The green swan (2020).

06Signature

How climate and nature financial risk connects the sectors

Select corners to build a signature, then hover a line to read what each sector gives and receives.

Select corners · hover lines6 / 15 relations

Signature

Biodiversity and its partners

Biodiversity gives pollination and soils to food (0.6), watershed regulation to water (0.5) and zoonotic spillover and medicines to health (0.4).

W · E · I · F · H · B

Sectors
4 of 6
Relations
6 of 15
Coupling
0.46 share of total

Strongest relations in play

  • Food → Biodiversity · land conversion0.6
  • Water → Food · irrigation0.8
  • Water → Biodiversity · environmental flows0.6
  • Food → Health · nutrition0.7
Teaching values for a typical city-region, not measurements for any place. Coupling is the summed strength of the relations in play, as a share of all fifteen.
07At a glance

At a glance, with 5 related topics

Climate and nature financial risk at a glance

risksacademy.comfinance-economicsdiscipline

Climate and nature financial risk: 0 primary courses open, 4 in preparation and 1 also taught here, across 8 subtopics and 2 connected disciplines. Courses: RAT-227 L2 in preparation, RAT-228 L2 in preparation, RAS-423 L3 in preparation, RAT-255 L2 in preparation, RAN-301 L2 also taught here.40L1L2L3L424
Climate and nature financial risk at a glance
  • Open, 0
  • In preparation, 4
  • Also taught here, 1
  • Subtopics, 8
Course codes from the curriculum; study levels L1 to L4.
Twin builderBuild a twin of any placeWorked example: Houston and the Ship Channel · 5 generators · 11 layers · 3 instruments
08Labs

How the subject is practised in labs

LabWhat you do in itCourses using it
Exposure labOverlay people and assets with hazard footprints2
Trigger labSet forecast thresholds, pre-agreed actions and messages1
09Console

How Climate and nature financial risk is taught, as a process you can run

Press Play to run this process from this page's own data.

10Practice

Practice, learning and connections

How technology helps and what risk it brings

11Take part

Take part in Finance and Economics

Start from who you are.

12References

Core references and where to begin

Start with Carney, then Basel Committee on Banking Supervision, then Battiston.

13Questions

Questions, answers and key terms

Is study here free?
Yes. Every course and learning material of Risk Academy, led by the Nexus Consortium, is free to study, self-paced or with a cohort. Ordinary participation has no fee; paid work, internships and fellowships are separate arrangements.
What does completing a course give me?
A completion record: the course, its version, the date and what was assessed, private by default and shared by you. It stacks into discipline, department and programme achievements. A record states what was studied and assessed and does not certify competence; it is not a licence, a professional title or an employment status.
Where do the data and the places come from?
Every faculty teaches on a twin of a real place built from open data; each layer carries its provider, licence and date, and every result on the Academy states its source. Maps and figures are indicators for teaching, never an assessment of a place.
How do I take part beyond the courses in climate and nature financial risk?
Form a competence cell of three to seven people, study a shared pathway, take a supervised assignment in the National Working Groups, or bring a cohort from your institution. For organisations.

Key terms

Term

Physical risk

Financial risk from the physical effects of climate change, acute or chronic.

Term

Transition risk

Financial risk from policy, technology and market changes on the path to a low-carbon economy.

Term

Climate scenario

A coherent description of a possible climate and economic future used to test exposures, such as the NGFS scenarios.

Term

Double materiality

Considering both how sustainability issues affect a firm and how the firm affects people and the environment.

ReportsContribute

Contribute evidence from this page.

Reports is the Consortium's quarterly publication. What you know about this subject can become evidence, a case or a correction in the next edition, credited to you and published under CC BY 4.0 where it is your own work.

Risk Academy
Climate and nature financial risk

Start with an open course

The catalogue lists each course with its outcomes, labs, hours and level.

Risk Academy

Courses · practice · credentials

Not for profit

Our articles, maps and twins are free to read and free to republish. Readers and partners keep it that way.

Partner with us

Who funds us

Risk Academy is a not-for-profit institution. To ask who funds a piece of work, use the funding questions form.

Independence

Editors and the expert reviewers named on each article decide what we publish. Funders and partners do not review or approve articles before publication.

Licence

Articles: CC BY 4.0. Figures, maps, twins and data: CC BY 4.0. Other uses: ask through the permissions form.