Purpose
Produce a fast, structured triage of a company's climate-related financial exposures — identifying which physical and transition risks are material, rating each by financial significance and time horizon, and naming the two or three areas that warrant a deeper quantitative assessment. Replaces the slow, consultant-led scoping phase with a same-day screen that an executive can act on.
When to Use
Invoke this skill when the user asks to:
- Triage a company's exposure to physical and transition climate risks
- Scope or prioritize a climate risk assessment before committing budget
- Prepare a first-pass risk inventory for TCFD, ISSB (IFRS S2), or CSRD disclosure
- Brief a board, audit committee, or CFO on where climate exposure concentrates
- Compare climate risk profiles across business units, sites, or acquisition targets
- Identify which risks need quantitative scenario analysis versus monitoring
Inputs Required
Before starting, collect:
- Sector: Primary industry and sub-sector (e.g., "diversified mining — thermal coal and copper")
- Geography: Where assets, operations, and key suppliers are located (countries/regions)
- Business model description: 3–5 sentences on what the company makes/sells, its revenue drivers, and asset intensity
- Asset profile: Owned physical assets, leased facilities, or asset-light — and any concentration in specific locations
- Value chain dependencies: Critical upstream inputs (water, energy, raw materials) and downstream customer base
- Time horizon of concern: Short (0–3 yrs), medium (3–10 yrs), long (10+ yrs), or all
- Disclosure context: Whether this feeds TCFD, ISSB, CSRD, internal risk register, or due diligence
If asset profile or value chain dependencies are missing, infer typical patterns for the sector and label those rows as assumption-based.
Instructions
Step 1: Establish the Risk Baseline for the Sector and Geography
Anchor the screen before generating findings:
- Identify the sector's carbon intensity tier: high (oil & gas, cement, steel, aviation, agriculture), medium (manufacturing, transport, real estate), low (services, software, finance).
- Note the geographic hazard profile: map the stated locations to dominant acute hazards (flood, wildfire, cyclone, drought, heat) and chronic hazards (sea-level rise, water stress, temperature shift).
- Note the policy exposure: carbon pricing regimes, disclosure mandates, and sectoral phase-out trajectories active or proposed in those jurisdictions.
- State two or three baseline observations that frame everything downstream (e.g., "asset-heavy, high-carbon, operating in a jurisdiction with a rising carbon price — transition risk dominates").
Step 2: Screen Physical Risks (TCFD: Physical)
Assess both hazard types against the asset and value chain profile.
Acute physical risks (event-driven):
- Flood, storm/cyclone, wildfire, extreme heat, drought — screen each against asset and supplier locations.
- For each material hazard: name the exposed asset or dependency, the mechanism of financial loss (asset damage, business interruption, insurance cost), and likelihood given the geography.
Chronic physical risks (long-term shifts):
- Sea-level rise, sustained water stress, mean temperature increase, changing precipitation.
- For each: name the affected operation or input, the financial mechanism (productivity loss, relocation cost, input scarcity), and the time horizon at which it becomes material.
Discard hazards with negligible exposure rather than padding the list — note them as screened out in one line.
Step 3: Screen Transition Risks (TCFD: Transition)
Assess the four transition risk sub-categories:
- Policy & legal: Carbon pricing, emissions caps, product bans, mandatory disclosure liability, litigation exposure. Tie each to the specific jurisdiction and sector trajectory.
- Technology: Substitution by lower-carbon alternatives, stranded asset risk, cost of retooling or R&D. Name the specific technology threat.
- Market: Shifting customer demand, repricing of carbon-intensive inputs/outputs, changing investor and lender preferences (cost or availability of capital).
- Reputation: Brand and stakeholder risk, customer attrition, talent attraction. Flag only where the business model is genuinely exposed.
For each material transition risk: name the driver, the financial mechanism (revenue, cost, capex, asset value, cost of capital), and the horizon.
Step 4: Rate Financial Materiality
Score every retained risk on a consistent scale:
- Magnitude: High / Medium / Low — potential financial impact relative to the company's earnings or asset base.
- Likelihood: High / Medium / Low — probability within the relevant horizon.
- Time horizon: Short / Medium / Long.
- Materiality rating: derive a composite — Critical (high magnitude × near-term), Significant, Monitor, or Low. State the rule used so ratings are reproducible.
Distinguish gross exposure from any obvious existing mitigant (e.g., insurance coverage, diversified geography) and note it briefly.
Step 5: Flag Priority Areas for Deeper Assessment
From the rated set, name the 2–4 risks that warrant quantitative scenario analysis next. For each:
- Why it ranks as priority (materiality + uncertainty).
- The specific next analysis (e.g., "model coastal asset exposure under RCP 8.5 sea-level scenarios," "quantify carbon-price pass-through under a $130/tonne 2030 scenario").
- The data or expertise required to do it.
Also note risks that are material but well-understood and need monitoring rather than analysis.
Output Format
- Structure: Baseline framing → physical risk table → transition risk table → priority assessment shortlist → one-paragraph executive summary at the top
- Length: 800–1,200 words
- Format: Two materiality tables (one physical, one transition) with columns for Risk / TCFD sub-category / Affected asset or driver / Financial mechanism / Magnitude / Likelihood / Horizon / Materiality rating; prose for baseline, priorities, and summary
- Sections: Executive Summary → Risk Baseline → Physical Risk Screen (table) → Transition Risk Screen (table) → Materiality Rating Logic → Priority Areas for Deeper Assessment → Risks to Monitor
- Tone: Risk director briefing the CFO — concise, decision-oriented, explicit about uncertainty and assumptions; no advocacy, no hedging into vagueness
Quality Checklist
Before delivering output, verify:
- [ ] Every risk is mapped to a specific TCFD sub-category (acute physical, chronic physical, policy & legal, technology, market, reputation)
- [ ] Each retained risk names a concrete financial mechanism — not just "this is a risk"
- [ ] Materiality ratings follow the stated composite rule consistently across both tables
- [ ] Priority shortlist contains 2–4 risks, each with a named next analysis and required data
- [ ] Assumption-based rows are explicitly flagged where asset or value chain inputs were inferred
- [ ] Hazards and transition drivers with negligible exposure are noted as screened out, not silently omitted
Notes
- This is a screen, not a quantification — the deliverable's value is in correctly ranking what to model next, so resist inventing precise dollar figures the inputs cannot support.
- For asset-heavy, high-carbon companies in carbon-pricing jurisdictions, transition risk almost always outranks physical risk in the medium term — lead with it.
- For asset-light service businesses, the live exposures are usually market, reputation, and value-chain physical risk (suppliers, data centers), not own-operation hazards — screen the value chain harder than the balance sheet.
- If the geography spans multiple regions with divergent hazard and policy profiles, split the physical table by region rather than averaging.
- Align rating language to the user's disclosure context: ISSB and CSRD both use "material" with specific definitions — note when a risk is material to the enterprise versus material for double-materiality reporting.
How to use this skill
This file is a Claude Code skill in Anthropic's standard format — markdown with YAML frontmatter at the top.
Installing in Claude Code:
~/.claude/skills/<folder-name>/SKILL.md— auto-loads in every session anywhere on your machine (recommended for skills you'll use across multiple projects)<your-project>/.claude/skills/<folder-name>/SKILL.md— auto-loads only when working in that project (recommended for project-specific skills)
Restart Claude Code or open a new session to register.
Using in Claude.ai, ChatGPT, Gemini, or other AI tools:
- Drag this file into a new chat, or copy and paste its contents
- Send your task or request as your next message — the AI will apply the skill where it fits
For Claude Code skill details: https://docs.anthropic.com/en/docs/claude-code/skills