The findings from the implementation of the PCRAM – Physical Climate Risk Assessment Methodology – have been published. Investors that adopted the PCRAM have seen improvements in how they integrate physical climate risks into their investment processes, leading to stronger and more resilient management of assets.
PCRAM standardises risk assessment, bridging the gap between the infrastructure and financial sectors by providing a consistent approach for evaluating climate risks across both public and private finance. It was developed four years ago by the Coalition for Climate Resilient Investment, with the support of Mott MacDonald along with 35 different institutions.
Its development passed to IIGCC in March 2023 when CCRI moved to a legacy programme.
The success of PCRAM’s first phase has opened the door to PCRAM 2.0, led by IIGCC, which will broaden its application across various industries. We’ll also be hosting a discussion paper later this year to further engage the investment community.
Why it matters:
-
Standardisation: PCRAM offers a consistent, industry-wide methodology to evaluate and manage investments in climate-resilient infrastructure, and future-proofing investor portfolios.
-
Risk and opportunity: While traditional models often fixate on the downside, PCRAM focuses on the benefits of resilience—like more predictable cash flows, enhanced credit quality, and more efficient long-term cost management.
-
Efficient resource management: It encourages a holistic approach to risk management, ensuring that resources are allocated effectively to build stronger, more resilient assets.
PCRAM in practice:
We are publishing three key documents that showcase the practical applications and benefits of PCRAM. These reports dive into real-world case studies, demonstrating how the methodology is being used to enhance resilience across different infrastructure projects.
PCRAM in Practice: The report provides an overview of key case studies, showcasing the benefits of the PCRAM methodology and outlining the next steps for the development of PCRAM 2.0.
Case study #1: This case study explores the implementation of PCRAM at a hydropower facility, detailing the resilience-building efforts undertaken and sharing valuable lessons learned throughout the process.
Case study #2: This case study highlights how PCRAM was applied to a coastal wind farm, demonstrating the methodology's effectiveness in enhancing the project's resilience.