Lender Physical Climate Risk Assessment Consultants | SLP Thailand
Physical Climate Risk Assessment for Education Assets in Chiang Mai
SLP Environmental conducted a Physical Climate Risk Assessment (PCRA) for an international education company with five major assets in Chiang Mai, Thailand, supporting investment due diligence and Equator Principles requirements. The study assessed the portfolio’s exposure to acute and chronic climate hazards using TCFD-aligned analysis and IPCC climate scenarios across baseline and future time horizons through 2050. Findings on flooding, drought, water stress, tropical cyclones and wildfires helped the client evaluate potential climate impacts on its proposed investment.
The primary objective of the (PCRA) was to assess the potential physical risks (as defined by the Task Force on Climate-related Financial Disclosures (TCFD)) to the portfolio of assets, and thereby gauge the level of exposure of the potential investment to the physical consequences of climate change under a number of varying scenarios as recommended by the Task Force on Climate-related Financial Disclosures (TCFD).
Climate Physical Risks are those risks resulting from climate change, which involve event driven (acute) or longer-term shifts (chronic) in climate patterns. Acute physical risks refer to those that are event-driven, including increased severity of extreme weather events such as cyclones, hurricanes, or floods. Chronic physical risks refer to longer-term shifts in climate patterns (e.g., sustained higher temperatures) that may cause sea level rise or chronic heat waves.
SLP performed a scenario-based analysis to evaluate the potential physical climate risk against different physical climate change scenarios adopted by the Intergovernmental Panel on Climate Change (IPCC) in its 6th Assessment Report (AR6). These included Optimistic, Business as Usual and Pessimistic scenarios, which were assessed against defined timeline horizons (Baseline, 2030, 2040/50).
Potential hazards assessed under the assignment included Riverine Flooding, Drought, Water Stress, Tropical Cyclones and Wildfires.
Performing a TCFD-aligned physical climate risk assessment at the site level allowed our client to better understand the potential future impacts of climate change on the portfolio of assets, thereby aiding their decision making process.
The PCRA study was presented in a bespoke standalone report which included figures and charts to illustrate key findings.