Markets at Risk is a cross-Brookings collaborative initiative that runs the gamut of metropolitan to foreign policy and aims to examine the question of whether the impacts of climate change will create instabilities that ripple through the global financial system—and at what might be done to lower those risks. Over the last decade, the financial risks posed by climate change have been gaining the attention of key global corporate and regulatory actors, with most of that attention focused on the so-called “transition risk” that arises when companies, through policy or market forces, transition away from fossil fuels. However, the physical risks that arise from climate change, such as those that threaten communities and infrastructure from floods, hurricanes, and wildfires, may present an even greater danger. This project looks at what investors actually know today about climate-related risks, particularly those less understood but potentially devastating physical risks — focusing on the US and on disclosure in equities and debt markets. We also evaluate how federal policies invite homeowners, investors, and others to engage in risky behavior — for example, in where to locate houses — because they know they will be compensated when hit by weather-related disasters. Those disasters will get more frequent and severe with climate change, magnifying the costs to the country.