Introduction

The Climate Resilience Investment Framework (CRIF) sets out a structured approach for investors to manage material physical climate risks that affect asset performance, creditworthiness, and portfolio resilience. Developed by IIGCC from work begun in 2021/22, it builds on prior guidance on physical climate risk, scenario analysis, and the Physical Climate Risk Appraisal Methodology (PCRAM). The framework focuses on improving financial resilience while supporting real-economy adaptation and identifying adaptation investment opportunities.

Conceptual underpinnings

Physical climate risk is defined as the interaction of hazards, exposure, and vulnerability. CRIF focuses on reducing vulnerability by improving adaptive capacity and reducing sensitivity, rather than attempting to eliminate hazards or exposure. PCRAM underpins the methodology, providing an iterative, process-based approach covering scoping, materiality assessment, resilience building, and value enhancement. Adaptation pathways are emphasised over outcome targets, recognising uncertainty, dynamic materiality, and data limitations. Nature is integrated across PCRAM steps, and specific attention is given to emerging markets and developing economies (EMDEs), where risks and adaptation opportunities are often more acute.

Structure and levers

CRIF adopts a structure aligned with the Net Zero Investment Framework, enabling dual use. It identifies levers across governance, portfolio construction, asset-level action, stewardship, policy advocacy, and market engagement. Portfolio construction can influence concentration risk and exposure to adaptation opportunities, while stewardship and macro-stewardship address system-level risks that individual investors cannot manage alone.

Governance and strategy

Investors are expected to assess and disclose physical climate risks in line with legal obligations and frameworks such as TCFD, ISSB, and TNFD. Responsibilities for adaptation and resilience (A&R) plans should be assigned to senior management and overseen by boards. Investors are encouraged to integrate A&R plans into mandates, manager selection, incentives, and reporting, and to ensure adequate organisational skills and resources.

Objectives

CRIF translates qualitative resilience ambitions into portfolio-level objectives. Core actions include disclosing the proportion of assets under management (AUM) aligned with A&R plans, setting objectives to increase portfolio resilience and allocation to adaptation investments, and clarifying how these objectives influence investment decisions. Advanced actions include expanding scope over time and, where appropriate, increasing exposure to EMDE adaptation opportunities.

Strategic asset allocation

Physical climate risk assessments, including PCRAM and scenario analysis, should inform asset allocation alongside traditional risk-return considerations. Investors are encouraged to update capital market assumptions, consider supply-chain exposure, and explore risk transfer tools such as insurance once resilience investments are optimised. Transparency on data gaps and proxy use is emphasised.

Asset level assessment and targets

CRIF introduces asset-level alignment criteria covering ambition, governance, business continuity, A&R plans, disclosure, and capital allocation. Investors should set five-year targets to increase the share of AUM at least “aligning” to an adaptation pathway and define engagement thresholds. Disclosure of methodologies, scenarios, progress, and constraints is encouraged.

Real estate

Guidance covers all real estate types and investment structures. Investors should assess material physical risks through PCRAM, integrate adaptation options into capex and opex, disclose residual risks, and engage tenants and managers. Targets focus on increasing assets at least “aligning (planning)” to adaptation pathways and using engagement to improve lagging assets.

Infrastructure

Infrastructure guidance applies to equity and debt across greenfield and brownfield assets. Due diligence should reassess new investments that cannot be aligned. Investors are encouraged to prioritise adaptation solutions, integrate resilience into management agreements, disclose PCRAM results, and engage borrowers and developers, particularly at refinancing.

Policy advocacy

CRIF highlights policy engagement as essential to overcoming barriers to adaptation. Investors should advocate for robust climate risk disclosures, open data, systemic adaptation policies, and investment-ready National Adaptation Plans, including fiscal stress testing of physical climate risks.

Stakeholder and market engagement

Investors are encouraged to engage data providers, peers, rating agencies, insurers, and development finance institutions to improve data quality, standards, and blended finance solutions. Such engagement supports consistent implementation of A&R plans and mobilisation of capital towards resilience, particularly in EMDEs.