Climate risks: V1 and V2 methodology

It follows the IPCC climate risk framework: hazard, exposure and vulnerability. For each risk the hazard is a class from A to F, calculated from climate indicators in the IPCC scenarios and, for earthquakes and volcanic eruptions, from geological data; the vulnerability is the sensitivity of the site's production processes, with a damage factor for each class; the exposure is the asset value. The result is the value at risk: the part of the asset value exposed to that risk, in euro. The value at risk of the site is that of the highest risk, earthquakes and volcanic eruptions excluded. Indicators, class thresholds and damage factors of each risk are published in the methodology, with their sources.

It adds the probabilistic estimate of the loss: for each risk, how much is lost in euro, taking into account how often each event occurs. The expected annual loss is the average of the damage of all possible events, each weighted by its probability. The event loss is the damage of a reference event, for example the 100-year flood.

As in V1, every method is published in the methodology with its sources. Damage to buildings follows damage curves for each type of event (for example JRC for floods, ESRM20 and Hazus for earthquakes, Hazus for wind gusts) or, where the literature is not enough, declared xNatura estimates; damage to production depends on the site's employees (for example the working hours lost to heat, according to the ILO). The sensitivity of the processes comes from ENCORE. The expected loss of the site adds up those of the individual risks without counting the same damage twice; earthquakes and volcanic eruptions are excluded from the total. Where the literature does not yet offer a method for a single site, the risk has its class and an amount of 0 € (an xNatura estimate) or no amount.