Climate Physical Risk encompasses both acute hazards like hurricanes, floods, and wildfires, and chronic shifts such as rising sea levels, temperature changes, and precipitation pattern alterations. Organizations assess physical risk through climate modeling, asset exposure mapping, and scenario analysis across different warming pathways. These risks affect property values, insurance costs, operational continuity, and supply chain reliability. A coastal real estate investment trust might quantify that 15% of its portfolio faces high flood risk under a 2°C warming scenario, requiring asset disposals, enhanced flood defenses, or increased insurance coverage.