CVaR stands for Climate Value at Risk. ClimateFirst CVaR represents the total anticipated increase in capital expenses due to projected chronic and acute physical climate risks, compared to current circumstances.
The CVaR for chronic hazards (heat and precipitation) reflects the total extra costs due to the accelerated deterioration of critical building components during a designated period. This CVaR is the gap between the expected costs to maintain the function of these critical building systems in a changed climate versus the current climate.
The CVaR for acute hazards (flood, wind, and wildfire) represents cumulative annualized loss for a designated period. Depending on the hazard, this may represent loss of the building, a portion of it, or a critical component.