How to Perform a Climate Risk Assessment for EU Taxonomy Compliance

The Climate Risk and Vulnerability Assessment (CRVA) is the single most common compliance requirement across EU Taxonomy building activities. Every activity in the Construction and Real Estate sector - from new construction (7.1) to renovation (7.2) to acquisition (7.7) - requires one. Yet many companies struggle with the practical question: how do you actually do it?

This guide walks through the CRVA process as defined in Appendix A of the Climate Delegated Act (EU) 2021/2139.

What the Regulation Requires

Appendix A sets out a two-phase approach:

Phase 1 - Screening: Identify which of the 28 physical climate hazards are relevant to the activity, considering its location, sensitivity, and the climate projections for the asset's lifetime.

Phase 2 - Detailed Assessment: For hazards identified as material in Phase 1, conduct a detailed vulnerability and exposure analysis, identify adaptation solutions, and develop an adaptation plan.

The regulation also specifies that the assessment must use "state-of-the-art climate projections at the highest available resolution" and consider scenarios consistent with the expected lifetime of the activity - at minimum, 10–30 years.

Step 1: Define the Scope

Before screening hazards, establish the assessment boundaries:

• Asset type and location - a single building, a development site, or a portfolio of assets. Location determines which climate data sources are relevant.
• Expected lifetime - new buildings typically have a design life of 50+ years, but the taxonomy requires a minimum 10–30 year projection horizon. Use the actual expected lifetime where it exceeds 30 years.
• Activity code - which taxonomy activity is being assessed (7.1, 7.2, 7.7, etc.). This determines the specific DNSH criteria that apply.
• Value chain scope - the regulation requires consideration of risks "in its own operations and along its value chain." For buildings, this includes the construction phase, operational phase, and the surrounding infrastructure on which the building depends.

Step 2: Screen All 28 Physical Hazards

Appendix A categorises physical climate hazards into four groups:

Temperature-Related

Chronic: changing temperature, heat stress, temperature variability, permafrost thaw, wildfires Acute: heat waves, cold waves, frost

Water-Related

Chronic: changing precipitation patterns, sea level rise, water stress, ocean acidification, saline intrusion Acute: floods (coastal, fluvial, pluvial), heavy precipitation, glacial lake outburst, drought

Wind-Related

Chronic: changing wind patterns Acute: storms (including blizzards, dust, sand), cyclones, tornadoes

Solid Mass-Related

Chronic: coastal erosion, soil erosion, soil degradation, solifluction Acute: avalanches, landslides, subsidence

For each hazard, assess whether it is relevant to the asset's location and type. Not every hazard applies everywhere - permafrost thaw is irrelevant in Mediterranean cities, and coastal flooding does not affect inland sites. But the screening must be explicit and documented. Simply omitting hazards without explanation does not satisfy the requirement.

Key principle: screen broadly, then narrow. It is better to screen in a hazard and conclude it is not material than to skip the screening entirely.

Step 3: Obtain Climate Projections

For hazards identified as potentially relevant, obtain climate projections under three RCP scenarios:

• RCP 2.6 - strong mitigation, temperature rise limited to ~1.5°C
• RCP 4.5 - moderate mitigation, temperature rise of ~2.5°C by 2100
• RCP 8.5 - high emissions, temperature rise of ~4.5°C or more by 2100

The taxonomy requires all three because the future emission pathway is uncertain. An asset that is safe under RCP 2.6 but at serious risk under RCP 8.5 needs adaptation measures to be resilient across plausible futures.

Data Sources

Several sources provide climate projections for European locations:

• Copernicus Climate Data Store (C3S) - free, gridded climate data at various resolutions
• Euro-CORDEX - regional climate model ensemble providing downscaled projections for Europe
• National climate services - many EU member states provide country-specific high-resolution projections
• IPCC WGI Interactive Atlas - useful for initial screening, though not at building-level resolution

The Resolution Question

This is where many CRVAs fall short. The taxonomy requires "the highest available resolution." For regional climate data, this is typically 12.5 km grid cells (Euro-CORDEX) or national products at 1–5 km resolution.

For most rural and suburban locations, this resolution is adequate. But for urban buildings, particularly in dense city centres, regional data misses the Urban Heat Island effect, street-canyon wind effects, and localised flood risk from impervious surfaces.

The regulation does not prescribe a specific resolution threshold, but it does require that the analysis is appropriate to the identified risks. For buildings where heat stress is a material hazard in an urban area, microclimate simulation provides the building-level resolution that regional data cannot.

Step 4: Assess Vulnerability and Exposure

For each material hazard, evaluate:

Exposure - the degree to which the asset is physically exposed to the hazard. A ground-floor commercial space is more exposed to pluvial flooding than a fifth-floor apartment. A south-facing facade is more exposed to heat stress than a north-facing one.

Sensitivity - how susceptible the asset is to damage or disruption from the hazard. A building with single-glazed windows is more sensitive to heat waves than one with high-performance solar control glazing.

Adaptive capacity - the extent to which existing features or systems reduce the impact. A building with a green roof and natural ventilation has greater adaptive capacity for heat stress than one relying solely on mechanical cooling.

The combination of exposure, sensitivity, and adaptive capacity determines vulnerability. This is not a numerical score (though some methodologies use scoring matrices) - it is a reasoned assessment of whether the hazard poses a material risk to the asset.

Step 5: Identify Adaptation Solutions

For each material risk, define adaptation measures that reduce vulnerability to an acceptable level. The taxonomy explicitly states that solutions should "consider the use of nature-based solutions or rely on blue or green infrastructure" where feasible.

Examples of adaptation measures for common building hazards:

Nature-based solutions are particularly effective because they often address multiple hazards simultaneously: a green roof reduces heat stress, manages stormwater, and supports biodiversity - contributing to DNSH across several objectives.

Step 6: Document and Plan

The CRVA must be documented in a way that is verifiable by auditors. The documentation should include:

1. Scope definition - asset description, location, expected lifetime, activity code
2. Hazard screening matrix - all 28 hazards with relevance assessment and justification
3. Climate data sources - which projections were used, at what resolution, for which time horizons
4. Vulnerability assessment - exposure, sensitivity, and adaptive capacity for material hazards
5. Adaptation plan - specific measures for each material risk, with implementation timeline
6. Monitoring plan - how the effectiveness of adaptation measures will be tracked

The adaptation plan should include cost estimates and integration with the building's design or renovation programme. Adaptation measures identified after construction are far more expensive to implement than those integrated during design.

Common Mistakes

Screening only obvious hazards. A CRVA that only assesses flooding because the site is near a river, without screening temperature, wind, and solid mass hazards, is incomplete. The regulation requires screening all 28 hazards.

Using only one RCP scenario. Some assessments use only RCP 4.5 as a "middle ground." The taxonomy requires assessment under RCP 2.6, 4.5, and 8.5.

Relying on historical data alone. Historical climate data tells you what happened. The taxonomy requires projections of what will happen. Past performance does not predict future climate.

Ignoring the urban microclimate. For urban buildings, regional climate data underestimates heat exposure. If heat stress is identified as a material hazard in an urban context, the assessment should address whether regional data adequately captures local conditions.

Treating the CRVA as a one-time exercise. The taxonomy requires that the assessment be proportionate to the activity's lifetime. For long-lived assets, the CRVA should be periodically reviewed as climate projections are updated.

Tools and Resources

• EU Taxonomy Compass - interactive tool for exploring activities and criteria
• Appendix A hazard list - the full 28 physical hazards with descriptions
• CRVA process overview - our detailed breakdown of the CRVA methodology
• UBA Climate Risk Assessment Guidance - German Environment Agency methodology guide
• EU Technical Guidance on Adapting Buildings - 2023 Ramboll/EC JRC guidance

For buildings in urban areas where the UHI effect is significant, CFD-based microclimate simulation provides the high-resolution analysis that standard data sources cannot deliver.