# Physical Risk

*ESG & Sustainable Finance — Finicade finance glossary*

Physical risk is financial damage from climate change itself: acute events like floods and fires, and chronic shifts like heat and sea level rise.

Physical risk is financial damage from climate change itself — acute events like floods, fires and storms, and chronic shifts like heat, drought and sea level rise. It's already repricing insurance and property in exposed regions, with some markets losing private cover entirely. Because it's geographically specific, it's assessed asset by asset rather than at company level.

**Also known as:** climate physical risk, acute physical risk, chronic risk

**Related terms:** [Transition Risk](https://finicade.com/glossary/transition-risk), [Climate Stress Test](https://finicade.com/glossary/climate-stress-test), [TCFD](https://finicade.com/glossary/tcfd), [Insurance](https://finicade.com/glossary/insurance), [Catastrophe Bond](https://finicade.com/glossary/catastrophe-bond)

Source: https://finicade.com/glossary/physical-risk