The Physical Climate Risk Appraisal Methodology (PCRAM) provides systematic, objective, and replicable guidelines for integrating physical climate risks into investment decision-making.
PCRAM 2.0 expands the application of the methodology across various industries and tested its applicability with mainstream institutional investors. The methodology was initially developed by the Coalition for Climate Resilience Investment (CCRI), with special contribution from Mott MacDonald.
The updated version, available below, includes four new case studies and is cross-compatible with The IIGCC Climate Resilience Investment Framework.
This new iteration outlines refreshed guidelines for integrating physical climate risks in real estate and infrastructure investment appraisal, having undergone consultation earlier this year.
Building on the success of Physical Climate Risk Divergence: PCRAM for investors, PCRAM 2.0 incorporates feedback from practitioners and insights from new case studies to enhance its methodology and applicability. New enhancements include:
- An investor portfolio and fund lens
- Systems analysis
- Value enhancement assessment and insurability considerations
- Nature-based solutions as resilience building
- Real estate applicability
PCRAM 2.0 combines climate science, engineering, and finance to present a robust approach, adaptable to individual contexts.
This updated version can help investors, asset managers, and developers make better decisions by factoring in physical climate risks, such as floods, heatwaves and storms. Looking beyond risk, it can support investors to identify resilience investment opportunities according to financial materiality.
Collaborative and case-study led
Grounded in practice and open source, PCRAM 2.0 is informed by four new real-world case studies which have improved the methodology and broadened its application. Read the case studies in full below or as a summary in the core document.
- Solar and mini hydro, Italy, provided by Stafford Capital Partners
- Ferry and port infrastructure, Lake Victoria with ports in Tanzania and Uganda, provided by Private Infrastructure Development Group (PIDG)
- Solar plant analysis, Europe, provided by Octopus Energy Generation
- Real estate, Spain, provided by AXA Investment Managers (coming Dec 2025)
These case studies demonstrate multidisciplinary collaboration and contributions from experts in engineering, climate science, finance and insurance. Balancing scientific and strategic rigor with a language that speaks to key decision makers.
Mott MacDonald, Howden, Swiss Re, LSE Grantham Institute on Climate Change and the Environment, and the Oxford University Environmental Change Institute were instrumental in making these case studies a success. We are grateful for their ongoing operationalisation of PCRAM going forward.
With climate change already affecting real assets, PCRAM 2.0 gives investors and asset owners a clear way to assess these risks and make more resilient, future-proof investments.
Thank you to our funder, the UK Foreign, Commonwealth and Development Office, and to our case study participants (listed alphabetically):
- AXA Investment Managers
- Howden
- LSE Grantham Institute on Climate Change and the Environment
- Mott MacDonald
- Octopus Energy Generation
- Oxford University Environmental Change Institute
- Private Infrastructure Development Group (PIDG)
- Stafford Capital Partners/Theia Investments
- Swiss Re