Sectorial models

Sectorial modelling is the modelling of physical climate risk for sectors of economic activity. Different classifications exist; for example within the European Union, NACE codes are defined https://ec.europa.eu/eurostat/web/metadata/classifications. It is assumed that the properties of the assets of a particular sector and region are not known in detail; the intent is rather to assign suitable vulnerability functions for the types of asset, the types being defined at a relatively coarse granularity.

Sectorial models are suitable for: - Comparative analyses (e.g. identification of most at-risk sectors/regions). - Bottom-up quantitative estimates of impact on entities (e.g. companies) within a sector.

Within physrisk sectorial models are defined in terms of the asset class, a ‘type’ field that provides a relatively coarse-granularity classification and a ‘location’ field.

Sectorial models are relevant to the subsequent sections that deal with inferring vulnerability functions from various sources.