JUNE 2021

Physical Risks of Climate
Change (P-ROCC 2.0)
C A L L F O R L O C AT I O N D ATA

Map generated from Wellington’s Climate Exposure Risk Application (CERA)

P-ROCC 2.0

BAC KG ROU N D
We believe that the Physical Risks of Climate Change(P-ROCC) framework, released in September 2019 as acomplement to TCFD reporting and other climate disclosure
frameworks, provides a helpful how-to guide for company
management teams to integrate climate science-based
scenarios into their strategic planning and corporate
disclosures. Today, it has become clear that a next logicalstep for assessing company-level climate risk is throughimproved access to physical location data. This document
outlines how companies can share location data that will
enhance transparency and help investors make more
informed investment decisions.
For decades, nonprofit organizations such as CDP and Ceres
have advocated for enhanced climate disclosure. In recentyears, entities such as the Task Force on Climate-related
Financial Disclosures, Climate Action 100+, Institutional
Investors Group for Climate Change (IIGCC), and others
have also sought to promote corporate support for greatertransparency around climate exposure and resiliency. In2020, CDP reported that a record-breaking 9,617 companies
disclosed their climate exposures, including physical climaterisks. This is a 14% year-over-year increase and a 70% jump
since 2015, just prior to the Paris Agreement. While progressis clearly being made, companies comprising approximately
half of the global market capitalization have yet to disclose
these risks,1 and even those disclosures that are releasedlack some very basic data relevant to climate exposure,notably the location of a company’s physical assets.
I M P O R TA N C E O F P H Y S I C A L
L O C AT I O N D ATA
Providing physical asset location data is a crucial componentof disclosing material climate-related risks. It is also among
the simplest — arguably essential — first steps toward
promoting climate-risk transparency. Unfortunately, therecontinues to be a dearth of readily accessible information
around the location of physical assets associated withcompany operations. Outside of certain sectors such asenergy, utilities, and real estate investment trusts (REITs), we
find that comprehensive asset-location data is unavailable
or insufficiently addressed in corporate disclosures.
When location data is included, its granularity and quality
vary greatly.

Limited and/or incomplete location data poses a challenge
for asset owners and asset managers seeking to analyze
companies’ physical climate risks. Because climate data isinherently geospatial, lack of a standardized, comprehensive
method for accessing physical location data makes it difficult
to assess the absolute and relative impacts of climatechange at the company level. We believe addressing thisdisclosure gap will enable better management of climate risk
and ultimately help mitigate future losses associated withclimate change.
P R E S S U R E F O R C L I M AT E D I S C L O S U R E
IS GROWING
Government entities, including regulators and centralbanks, as well as capital market participants, are seeking
more climate-risk disclosure. On November 9, 2020, theUK’s chancellor of the Exchequer announced that the UK
will require certain companies to improve their climate-risk
reporting for reporting periods beginning in January 2021. By
2025, economy-wide climate-risk disclosures in accordancewith the TCFD are expected.2 In the US, a 2020 report by
the Commodity Futures Trading Commission (CFTC) called
for publicly traded companies, entities registered with theCFTC, and other regulators and financial institutions todisclose information about material climate-related risks inan adequate and timely manner.3
Central banks, including the Bank of England, the Bank ofFrance, the Australian Prudential Regulation Authority, andthe Bank of the Netherlands, have completed or are in theprocess of launching climate-risk stress tests for banks andinsurers. These processes rely on the availability of physicallocation data, which allows company-level climate risk to beincluded in portfolio-level risk, and ultimately, systematic
climate-risk assessment.
Asset owners, especially those with long or perpetualinvestment horizons, are likely to follow suit, requiring
additional transparency on companies’ physical locations,which enables them to better evaluate the potential impactof long-term climate risks on their investments. We believe
companies themselves will also benefit from more robust
climate disclosure as increased transparency could enhance
scenario analysis and transition planning.

1 “The A List 2020: Company scores,” CDP, 2020.
2 “Chancellor sets out ambition for future of UK financial services,” Gov.UK, 9 November 2020.
3 “Managing Climate Risk in the U.S. Financial System,” U.S. Commodity Futures Trading Commission, Market Risk Advisory Committee,
Climate‑Related Market Risk Subcommittee, 2020.

2

P-ROCC 2.0

OUR REQUEST
We ask that companies disclose a complete list of addressesof all owned, leased, or otherwise operated physical assets
in a publicly accessible format. Companies could include
this data on a corporate website, sustainability reports, 10-K
filings, and/or via a third party like CDP.
A sample suggested reporting format is shown below. A
basic set of data would include the street address, domicile
country, and high-level description of each facility. Ideally,we would like companies to include more detailed data,
including whether each facility is owned or leased, its
exact location in global coordinates, and a description

BASICof its materiality within the company’s operational andfinancial footprint.
We expect that investors and other stakeholders willappreciate this additional detail. In addition to greatertransparency into a company’s operations, location data will
help companies address existing and pending regulatory
expectations. We would like to see privately held companies
provide this information as well, as investors increasingly
seek to analyze private companies’ strategic planning andrisk-management approach, as they do with public issuers.

DE TAI LE D

STREET ADDRESSCOUNTRYT Y P E O F FA C I L I T Y

OWNERSHIPC O O R D I N AT E S

M AT E R I A L I T Y

123 Main Street,
Los Angeles,
California 94202

USAOffice building

Leased40.7 latitude-78.1 longitude

30% of global
employees

1234 Center Ave.,
Edmonton, Alberta

CanadaGas plant/gas wellOwned

58.5 latitude-117.4 longitude

15% of global
population

1234-3 Kamiosatsu,
Naka-ku , Nagoya
NagasakiJapan

Manufacturing plant

25% owned

35 latitude
139.2 longitude

Accounts for lessthan 20% of global
revenues

IN CLOSING
We believe climate change will profoundly affect society,economies, and capital markets. Information regarding how
issuers are responding to climate change risks is critical todiligent investment management. Currently, our ability toassess the risks climate change poses to issuers is limitedby the absence of a standard framework for climate-risk

disclosures. In our view, a common disclosure framework,
including company location data, would provide market
participants with the information necessary to identify andassess the climate-related risks facing issuers and the steps
issuers are taking to mitigate those risks.

S U P P O R T E D B Y:3P-ROCC 2.0

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