Climate-related risks pose inevitable threats to investors and the assets in which they invest. Institutional investors have become increasingly concerned about-climate-related risks, but physical risks, which represent the direct physical impacts from climate change, are not well understood.

Climate-related disasters are increasing in frequency and severity and both economic and human losses are climbing. Unfortunately, developing countries, which are the least equipped to deal with disasters, are often impacted the most. Over the past two decades, new financial tools have emerged to help developing countries cope with disaster.