From risk evidence to diligence questions
A flood model, a grid dependency map or a cyber scenario does not answer a credit committee's question by itself. The Global Risks Alliance (GRA) restates each finding as the question a competent institution would ask, and records what would be needed to answer it. This page sets out the method and the scope of that translation: what goes in, what comes out, and where the work stops. It is the method behind every service on Finance and insurance readiness.
- 01InstitutionThe Global Risks Alliance (GRA)
- 02Service levelR0: information and enquiries
- 03In briefThe short answer
- 04The translationWhat scientific evidence becomes when a financial institution reads it
- 05TranslationFrom a hazard metric to a reviewer's metric
- 06Reviewer standardsThe yardsticks a competent institution will apply
- 07MethodFour moves, each leaving a record
GRA · Institution · service level R0
The short answer.
GRA's approach to finance readiness restates each scientific finding, such as a flood model, a grid dependency map or a cyber scenario, as the question a competent institution would ask, and records what would be needed to answer it. The page sets out what goes in, what comes out and where the work stops, in four recorded moves.
Financial centres and urban exposure in Brazil.
The cities where people, assets and financial activity concentrate, shown for Brazil as an example geography for this subject.
What scientific evidence becomes when a financial institution reads it.
| Risk evidence | The financial question | Who asks it | What is usually missing |
|---|---|---|---|
| Modelled flood depth for a river basin | Which insured and uninsured assets sit in the footprint, and what share of the loss falls on households and the public budget? | Insurers, reinsurers, finance ministries | Asset registers, insured values, local damage functions |
| Dependency of water treatment on one power substation | Could a single outage interrupt several borrowers or insured operations at once? | Banks, insurers, infrastructure lenders | Counterparty mapping, outage duration, restoration constraints |
| Heat and drought scenarios for a farming region | How would yields, input costs and household income move loan performance and food-import costs? | Agricultural lenders, development lenders, central banks | Loan-level geography, price pass-through, coping capacity |
| Concentration of payments on one cloud provider | What fails together, for how long, and who carries the cost? | Supervisors, banks, insurers writing cyber cover | Third-party inventories, recovery objectives, accumulation data |
The evidence in the first column comes from The Global Centre for Risk and Innovation (GCRI) and national source owners, with its methods and uncertainty. GRA's work is the second and fourth columns: the question and the gap.
From a hazard metric to a reviewer's metric.
Every row keeps the science value's own uncertainty and evidence label; the restatement never upgrades it.
| Science output | Financial restatement | Who reads it |
|---|---|---|
| Flood depth at a return period | Change in collateral value and loss given default | Credit risk and collateral teams |
| Annual exceedance probability of wind speed | Points on an exceedance probability curve after policy terms | Underwriters, reinsurance buyers, actuaries |
| Drought index by season | Revenue and repayment stress for agricultural borrowers; parametric trigger design questions | Agricultural lenders, insurers, ministries of finance |
| Outage duration at a facility | Business interruption and impact-tolerance breach | Operational resilience and continuity functions |
| Transition pathway by sector | Revenue, cost and stranded-asset questions under NGFS scenario families | Credit and investment risk, disclosure teams |
The yardsticks a competent institution will apply.
- Banks: the Basel Framework and the BCBS climate principles for credit and concentration questions.
- Insurers: IAIS Insurance Core Principles, Solvency II or local equivalents, and IFRS 17 for measurement.
- Development lenders: IFC Performance Standards, the Equator Principles and the joint MDB climate finance methodology.
- Public finance: the IMF-World Bank debt sustainability frameworks and the IMF fiscal transparency code.
- Governance questions that no reviewer owns go to GRF resilience finance governance.
Four moves, each leaving a record.
- 01
Label the evidence
Every source carries one label: observed, officially reported, institution-reported, estimated, modelled, forecast, scenario, expert judgement or unknown.
- 02
Trace transmission
Read the evidence for credit, insurance, market and fiscal channels, described as mechanisms, not measured strengths. See Financial-system risk.
- 03
State the question
Write each finding as the question a named kind of institution would ask, with its horizon.
- 04
Register the gap
Record what would be needed to answer it, in a diligence-question register that feeds readiness dossiers.
Inside and outside the method.
Questions and gaps
Transmission channels, protection gaps, scenario framing, safeguard questions and the evidence a reviewer would need.
Decisions and advice
No recommendation to lend, insure or invest, no rating or score, and no view on price, terms or counterparties.
Sometimes insufficient
A translation may conclude that evidence is insufficient. That finding is recorded and returned, never presented as readiness.
Terms used on this page.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Due diligence | The independent investigation a lender or investor carries out before committing finance. |
| Evidence label | A tag naming the kind of evidence, such as observed or modelled, that should survive every summary. |
| Readiness file | A document set describing a programme's evidence, risks, governance and data so that a competent institution can carry out its own independent review; it is not an approval, rating or offer of finance. |
Where this page's references lead.
The bodies and documents this page is read against. Status and editions change; each link goes to the issuing body.
- Basel Framework (consolidated standards)
- BCBS Principles for the effective management and supervision of climate-related financial risks (2022)
- IAIS Insurance Core Principles and ComFrame, including the Insurance Capital Standard (adopted December 2024)
- IFC Performance Standards on Environmental and Social Sustainability (2012)
- Equator Principles EP4
- IMF-World Bank Debt Sustainability Framework for Low-Income Countries (LIC DSF)
- NGFS climate scenarios: long-term Phase V (November 2024; Phase VI announced for 2026) and short-term scenarios (May 2025)
Questions and answers.
Is the translation a credit or underwriting assessment?
Where does the underlying science come from?
Can we use the method ourselves?
How do I start?
Around GRA.
Start with an enquiry.
The current service level is R0: information and enquiries. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.