Fig. 3: Scatter plot showing, for each firm (dot), the acute, chronic and equity shocks.
From: Asset-level assessment of climate physical risk matters for adaptation finance
Selected scenario: Shared Socioeconomic Pathway 3-Representative Concentration Pathway 4.5 (SSP3-RCP4.5), year 2040. Sample size: 86 firms with available asset-level data. X axis: chronic shock, defined as the loss in sectoral output for the business lines in which a given firm is engaged, weighted by the respective revenues. A negative number indicates a loss (e.g., −0.04 indicates a 4% chronic shock) and a positive number a gain. Y axis: acute shock on assets representing the asset-level losses borne by a firm, described by the average across all assets of − ηa, as defined in Eq. (9). A more negative value represents a higher shock and a value of 0 represents no losses on assets. Colour: equity shock, i.e., final outcome of the full Climate Dividend Discount Model (CDDM). A negative value (darker colour) represents a larger negative shock on equity valuation. The figure highlights four firms with different business lines, chronic, acute, and combined shocks. The left hand-side box discusses the implications of pairwise comparisons across these highlighted firms.
