Preparing for Mandatory Climate Reporting: How Climatics Enables Effective Physical Risk Reporting

The financial impacts of climate change are becoming more evident as severe weather events increase in frequency and intensity, posing risks to assets worth trillions globally. Governments are responding by implementing mandatory climate risk reporting frameworks, encouraging businesses to identify vulnerabilities and strengthen resilience. 

With the Task Force on Climate-Related Financial Disclosures (TCFD) framework becoming mandatory for many organisations in Australia from 2025 onward, businesses must act now to align their reporting practices.

Climatics offers a powerful solution to help meet these new regulatory requirements, providing a first-pass tool for seamless and efficient physical risk reporting.

What is Climate Risk Reporting?

Climate risk reporting involves identifying, quantifying, and disclosing climate risks that impact a business. It addresses two critical types of risks:

• Physical Risk: Risks from climate hazards, such as floods, heatwaves, or wildfires, which threaten business operations and assets.
• Transition Risk: Risks linked to the transition to a low-carbon economy, including regulatory, market, and technological changes.

The TCFD framework has emerged as the global standard for reporting, organised around four key areas: Governance, Strategy, Risk Management, and Metrics and Targets. Many disclosure mandates, including those in Australia, align with TCFD guidelines to ensure consistent industry reporting.

Upcoming Timelines for Mandatory Climate Reporting Compliance

The transition to mandatory climate disclosures will occur in phases:

Companies must report their climate-related financial disclosures in annual reports, focusing on both physical and transition risks across different time periods.

Why is Physical Climate Risk Reporting Essential?

Physical climate risk reporting plays a crucial role for various stakeholders:

• Financial Markets: Investors and lenders rely on high-quality disclosures to make informed decisions. A Deloitte survey shows that 86% of institutional investors consider climate change the most significant ESG factor in their investment choices.
• Governments and Regulators: Reliable data supports policy-making and national adaptation strategies, helping meet emission reduction goals.
• Business Operations: Proactive risk reporting builds resilience, providing a competitive advantage by identifying and seizing adaptation opportunities ahead of competitors.

According to S&P Global, 80% of the world’s largest companies already report exposure to climate-related risks. Effective physical risk reporting helps businesses attract talent, improve operational efficiency, and manage risks, including supply chain vulnerabilities.

How Climatics Supports TCFD-Aligned Physical Risk Reporting

Climatics simplifies the process of physical risk reporting with tools and insights tailored to meet TCFD requirements.

Asset-Level Risk Analysis
Climatics provides precise data on individual asset exposure to climate hazards, helping businesses prioritise adaptation efforts and understand both the 

Historical Data Integration
Access to historical weather data enables companies to track trends such as floods, bushfires, and extreme temperatures to align with TCFD’s forward-looking risk assessment.

Assistance With Compliance Reporting
Climatics offers easy-to-interpret visual reports, streamlining compliance and reducing administrative burdens.

Beyond Compliance: Building Competitive Advantage with Climatics

Effective climate risk reporting offers more than compliance—it drives innovation and competitive advantage. Embedding climate risk insights into strategic planning allows companies to anticipate policy changes, improve resource management, and boost operational efficiency.

Clear visibility of risks ensures that businesses can make informed decisions—whether it’s relocating vulnerable assets or capitalising on favourable conditions elsewhere.

Get Ahead of TCFD Regulations with Climatics

As new climate reporting regulations come into effect, companies that proactively address physical risks will position themselves for long-term success. By using Climatics as a first-pass tool for TCFD compliance, organisations can enhance their resilience, streamline reporting, and gain a competitive edge.

Act now to ensure your business is TCFD-ready. Climatics provides the insights, tools, and data you need to comply with regulations, manage risks effectively, and thrive in a changing climate.