Review and Benchmarking of IFC's Climate Physical Risk Assessment Tools

Objectives: Over the past eight years, IFC’s Climate Business Department (CBD) has developed proprietary tools to assess physical climate risks in its investments, addressing a market gap where suitable alternatives were previously unavailable. The IFC Climate Risk Platform integrates these proprietary tools and modules with climate data and externally developed tools, offering a comprehensive approach to climate risk management. The Platform’s primary objectives include facilitating the identification of physical climate risks – particularly in the context of Paris Alignment – and identifying related opportunities that are material to IFC’s operations at the project level. It supports risk assessment, quantification, and mitigation planning while ensuring integration into IFC’s business cycle. The primary users of the Platform include IFC’s climate specialists, industry specialists, and environmental and social specialists, who use it to assess climate risk at the project level during IFC’s project life cycle. In addition, a broader range of IFC and World Bank Group (WBG) staff use the Platform for climate risk assessment at the portfolio and country levels. There are multiple other climate-related initiatives undertaken or in development at the WBG and IFC levels, some of which are described below.