including extreme precipitation, sea level rise, a warming and drying trend, and extreme temperatures. Physical risks may have financial implications for organisations, such as direct damage to assets and indirect impacts from supply chain disruption. Organisations’ financial performance may also be affected by changes in water availability, sourcing, and quality; food security; and extreme temperature changes affecting organisations’ premises, operations, supply chain, transport needs, and employee safety. Corporate governance Corporate governance broadly refers to the mechanisms, processes and relations by which corporations are managed. Effective corporate governance rules provide comfort that there is adequate oversight by the board on the company’s management and protection of shareholder rights. Corporate social responsibility (CSR) Corporate social responsibility (CSR) describes a corporation’s initiatives to assess and take responsibility for the company’s effects on environmental and social wellbeing. It is also often referred to as corporate citizenship, corporate responsibility or corporate sustainability. Most of the largest publicly-traded companies in developed markets have a dedicated CSR team in place. There is increasing distinguishment of whether CSR activities are philanthropic in nature, or are actual changes and improvements in a corporation’s core business activities. D Development finance Development finance is the use of public sector and/or philanthropic resources to facilitate private sector investment in low- and middle-income countries where the commercial or political risks are perceived to be too high to attract purely private capital, and where the investment is expected to have a positive developmental impact on the host country. Market terminology AllianzGI Sustainable Investing – Glossary 7