Climate Risk Stress Testing in California: A Geospatial Framework for Banking and Climate-Exposed Sectors
It provides a practical tool for banks and climate-exposed sectors to assess climate risks, but the framework is applied only to California and lacks quantitative results, making it an incremental contribution.
This paper develops a geospatial framework for climate risk stress testing in California, integrating physical hazard mapping and sector-specific exposure analysis to evaluate how wildfires, drought, flooding, extreme heat, and transition risks affect regional economic activity and financial stability.
This paper develops a geospatial framework for climate risk stress testing in California with applications to banking and climate-exposed sectors such as agriculture, real estate, and tourism. The study integrates physical hazard mapping, sector-specific exposure analysis, and scenario-based financial risk assessment to evaluate how wildfires, drought, flooding, extreme heat, and transition risks may affect regional economic activity and financial stability. The framework is intended to support portfolio monitoring, climate scenario analysis, and institutional readiness under emerging disclosure and risk-management standards. In addition, the paper provides a survey-based implementation guide for benchmarking current climate-risk practices and data needs across industry and academic stakeholders.