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Physical: Water risk and rising sea levels

As global temperatures rise, physical water risks and sea level rise are emerging as some of the most material threats to infrastructure, economies, and investment portfolios. These risks are not abstract future concerns—they are unfolding now, reshaping the operational landscape for businesses worldwide.

Water risk includes both scarcity and excess. In water-stressed regions, competing demands from agriculture, industry, and communities can restrict supply, inflate costs, and prompt regulatory intervention. For sectors such as food production, textiles, and energy, water scarcity can severely limit output, disrupt supply chains, and impact long-term viability.

Rising sea levels present a persistent and escalating threat to coastal infrastructure.Industrial facilities, ports, transportation hubs, and real estate developments are at growing risk of inundation, salinisation, and erosion. These impacts can lead to soaring insurance premiums, declining land values, and the permanent loss of critical assets.

When combined, these risks increase the likelihood of asset devaluation, stranded infrastructure, and chronic operational disruption. In high-exposure areas, entire business models may become untenable.

NatureAlpha’s Geoverse 2.0 offers detailed, real-time mapping of water stress and sea level exposure, enabling organisations to identify at-risk assets and adapt strategies—helping safeguard both environmental integrity and long-term financial performance.

NatureAlpha Team
April 11, 2025

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As environmental regulations tighten and public scrutiny intensifies, litigation and liability risk is becoming a critical transitional issue for businesses and financial institutions.

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Transitional: Policy change and activism

As awareness of biodiversity loss and environmental degradation rises, policy change and activism are rapidly reshaping the operating environment for businesses and investors.

Transitional: Natural resource availability

As the global economy shifts toward sustainability, natural resource availability is becoming a central transitional risk. Businesses that rely heavily on finite or declining resources are increasingly exposed.

Transitional: Regulatory and compliance changes

As global momentum builds around sustainability and biodiversity protection, regulatory and compliance changes are emerging as a key transitional risk for businesses and financial institutions.

Physical: Pandemics and social impact

The interconnectedness of human health, biodiversity, and business has never been more evident. Pandemics and their cascading social impacts present significant physical risks to businesses.

Physical: Biodiversity & ecosystem loss

As the natural world continues to degrade, biodiversity and ecosystem loss is becoming a major driver of physical risk—undermining the very systems businesses rely on for resources, resilience, and stability.

Physical: Water risk and rising sea levels

As global temperatures rise, physical water risks and sea level rise are emerging as some of the most material threats to infrastructure, economies, and investment portfolios.

Physical: Droughts, deforestation and landslides

As climate change accelerates and ecosystems are degraded, physical risks such as droughts, deforestation, and landslides are becoming more severe and financially consequential.