Climate Value at Risk (CVaR)

Climate Value at Risk (CVaR) is a quantitative method used to estimate the potential financial impact of climate change on assets, companies, or portfolios under different scenarios. It translates physical and transition risks—such as extreme weather or carbon pricing—into monetary terms, enabling forward-looking risk analysis. By modelling scenario-based losses and valuation changes, CVaR helps investors and organizations assess exposure, compare risks, and support disclosure and strategic decision-making.