Taxonomy

• Catastrophe modeling. It typically includes three modules, a hazard module – where it assesses the extent and intensity of climate hazards, a vulnerability module – that relates hazard to physical damage, and a financial model that translates physical damage to financial losses. Typically, the key output of a catastrophe model is the distribution of possible losses, expressed in financial terms, to the portfolio. The common set of outputs of catastrophe models include average annual loss, average probability of occurrence, annual exceedance probability curve, and return periods.
• Climate-related Financial Risk
• Climate Value at Risk
• Damage Function
• Monte Carlo Simulation
• Physical Risk
• Transition Risk
• Scenario Analysis
• Stress test
• Monte Carlo simulation

See Climate Scenario Taxonomy by the Financial Sector for more.