Is your company prepared for SS5/25?
On the 3rd December 2025, the Bank of England published SS5/25. Replacing it’s predecessor (SS3/19) the update details new Prudential Regulation Authority (PRA) expectations for how UK Banks and Insurers’ manage their climate-related risks. The update represents a major paradigm shift in climate reporting requirements and disclosures. As firms close in on the PRA deadline of the 3rd June 2026 to have completed their internal reviews and gap analysis, TransZero discusses what this update means for Physical Climate Risk modelling requirements.
Compared to the earlier climate guidance on disclosures (SS3/19) published in April 2019, the Bank of England’s new supervisory statement (SS5/25) is more than double the length and lays out 41 pages of detailed guidance on the expectation of Banks and Insurers to manage and disclose their climate-related risks. The overriding summary of the new disclosures is a move away from climate-risk awareness towards firms embedding climate-risk as a material board level concern, with greater accountability proactive risk management of climate risk. As firms move to embed climate risk management into their core governance, scenario analysis, and disclosure frameworks, we look specifically at six key takeaways from SS5/25 relating to the physical climate risk modelling and where TransZero solutions can help.
Key Takeaways for Physical Risk Climate risk modelling in SS5/25 :
Recommendation for high resolution climate-risk models – companies are expected to assess their exposures at a ‘suitable level of geographic granularity to capture physical impacts’. The report is clear that assets exposed to flooding really need to assessed with appropriate resolution hazards models.
TransZero hazard modelling captures property flood risk down to a very high grid resolution (5m resolution). High resolution modelling is critical for accurate damage assessment due to flood depth inundation. Whereas continuous perils wind or temperature may not require such resolution, river flooding, surface water and coastal risk are discontinuous perils.
Catastrophe modelling - the report makes clear recommendations for firms to adopt catastrophe modelling toolkits and approaches to capture acute perils such as Tropical cyclones, floods, droughts, heat waves.
Our platform models 10 x climate perils including flood risk (river, surface water), storm surge, wind (Tropical and Extra-Tropical Cyclone), wildfire, hail, drought, landslide, extreme temperature, subsidence, and sea level rise.
Consideration of non-UK exposure - firm are advised to consider the impact of physical damage to cross-border exposure and broader supply-chain risk.
TransZero’s hazard coverage is global, allowing the quantification of risk for anywhere in the world at any lat/lon input. Clients can use the supply chain module to quantify how risks impact their direct operations as well as from first and second tier suppliers.
Call to action – a key difference in SS5/25 is the paradigm shift away from climate-risk ‘awareness’ to climate risk as a strategic financial concern that is embedded in decision-making as part of core governance and general risk management.
Use TransZero web or TransZero API to continually monitor changes in your portfolio. Compare and contrast how the climate risk of your matures, what adaptations have the greatest potential to mitigate losses.
Disclosures should be led by ‘risk’ not by company size – SS5/25 makes clear that all firms manage and disclose their material climate-related risks (and that this doesn’t just apply to large banks and insurers). They recommend a proportionality-based approach whereby climate risk management is appropriate to the severity of the risk. A two-step approach is recommended, whereby first the company identifies key climate risks on their risk register and then a second step to consider their risk management response (including mitigation / adaptation). Materiality is based on risk not size of company.
TransZero’s loss and risk metrics quickly identify the highest contributing assets to climate-risk. Drill down and understand which perils and regions are driving that risk as well as modelling potential resilience improvements and mitigation plans.
Litigation risk – climate litigation has increased substantially in recent years across most global jurisdictions as well as in their scope. Banks and Insurers are increasingly vulnerable to a range of climate litigation risks, from the fines of non-disclosures and inaccurate submissions to the broader general liabilities of failing to adapt to the physical risks of climate change.
Use the TransZero platform to auto-generate statistics and report-ready climate risk summaries and charts to support your board reports, submissions and disclosures.
Contact TransZero to learn how we can support your bank or insurance company is climate-related risk modelling and disclosure reporting.
Transzero are a team of dedicated climate risk specialists, helping companies understand how climate risk will impact their business. If you’re interested to learn more about the Transzero’s climate risk services, please contact us via our web page or info@transzero.co.uk
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