Our paper examines why today’s dominant physical climate risk tools fail to meet investor needs. Originally designed for property insurers, these models calculate building repair costs, but miss the broader business disruptions, supply chain shocks, and market ripple effects that drive enterprise value.

The paper highlights this mismatch: investors are paying premium prices for asset-level precision that adds little value to portfolio management, while the systematic risks that truly move markets go unmeasured.

Emmi proposes a different path. By integrating market signals with climate science, we outline an approach that captures how physical risk actually affects portfolios. Rather than underwriting data repackaged for finance, investors gain clarity on where climate events reshape sectors, shift market share, and reveal resilience.