Over One Third of Italian SMEs Are Exposed to High Physical Climate Risk

The Italian business landscape continues to face growing exposure to physical risks linked to climate change. This is one of the key findings of the thematic focus included in CRIF's ESG Outlook 2026, the annual sustainability observatory now in its fourth edition.

The analysis covers 315,000 SMEs and more than 600 large Italian companies, using data from CRIF's ESG Data Lake updated as of December 2025.

"Unfortunately, more than one-third of SMEs in our country are exposed to high or very high levels of physical risk: a significant figure that cannot be ignored. Physical risks arising from extreme natural events are no longer a future scenario, but a present, measurable variable that is becoming increasingly relevant in credit and investment decisions. In this context, CRIF has developed highly granular analytical tools that enable banks and businesses to assess and manage this exposure in a structured and informed way," commented Marco Macellari, CEO of CRIF Synesgy Ratings.

The Physical Risk Profile of Italian SMEs

The physical risk assessment methodology, developed through the partnership between CRIF and RED (Risk Engineering and Development S.p.A.), estimates each company's exposure through high-resolution hazard models, considering 18 risk factors (acute, chronic and seismic) across three dimensions: geographic hazard, vulnerability and exposure. Projections extend to 2049 and generate a score ranging from 1 (Low Risk) to 5 (Very High Risk).

The overall picture for 2025 shows substantial stability compared with the previous year, although there has been a limited shift toward the highest risk classes. The Medium Risk class remains the most common, accounting for 39.5% of SMEs. The High and Very High Risk classes together account for 36.6% of companies (30.0% and 6.6% respectively), slightly increasing from 36.3% in 2024.

From a credit exposure perspective, 34.3% of financing granted to SMEs is associated with the highest risk classes (up from 33.4% in 2024), further increasing the importance of measuring and monitoring this exposure through appropriate analytical tools.

The Most Significant Risk Factors: High Temperatures, Floods and Earthquakes

Among the 18 risk factors considered by the analysis, heat stress and heatwaves continue to represent the most relevant factors in terms of exposure to at least a moderate level of risk (PEAR – Potential Exposure At Risk). Flood risk recorded the most significant increase compared with 2024.

Regarding exposure to at least a high level of risk (PESAR – Potential Exposure Seriously At Risk), earthquakes remain the most significant factor and have remained stable over time, as they are independent of climate-related changes.

The most significant year-on-year variations concern floods and landslides, consistent with updates to the related risk assessment models.

Geographic Distribution of Physical Risk

The geographic distribution confirms significant regional heterogeneity, broadly unchanged from 2024. Sicily, Calabria and Emilia-Romagna rank among the regions with the highest physical risk levels, while Piedmont, Molise, Lombardy and Tuscany show comparatively lower levels. In terms of regional PESAR values, the highest levels are recorded in Aosta Valley, Calabria and Sicily.

"The physical risk profile of Italian SMEs remains broadly stable compared with the previous year, but the gradual shift toward the higher risk classes reminds us that this is a structural rather than cyclical phenomenon. The geographical heterogeneity highlighted by our analysis underlines the need for detailed, georeferenced assessments: only by accurately measuring risk through advanced analytical tools can it be effectively managed, both in credit decisions and corporate strategies. The objective of ESG Outlook is to support financial institutions, businesses and policymakers in understanding ESG dynamics by providing concrete data to guide strategic and operational decisions towards a sustainable transition. Today, sustainability is no longer an optional element, but a structural driver of risk management and long-term value creation," concluded Marco Macellari.