Researchers from the universities of Zurich, Vienna and Utrecht have revealed significant flaws in current climate risk assessment techniques that could lead to a serious underestimation of climate-related financial losses for businesses and investors.

A study by Stefan Battiston from the Department of Finance at the University of Zurich and his co-authors, published in Nature Communications , identified critical gaps in the way climate-related risks to corporate assets are currently assessed .

Many current estimates of climate-physical climate risk rely on simplified and proxy data that do not accurately represent society's true exposure to risk. This can lead to a significant underestimation of climate-related losses, with serious implications for business investment planning, asset valuation and climate change adaptation efforts. (Melanie Nyfeler, University of Zurich, more at phys.org)