Loss and damage associated with climate change has gained increasing importance in international climate change negotiations, research, and policy making in recent years. It is a significant consequence of inadequate action from the international community on delivering climate action. Loss and damage is already happening in developing countries like Nepal and it is important to understand how this can be assessed and addressed at national and sub-national level. This study examines how the issue of loss and damage is evolving in international policy and in Nepal. Most importantly, by reviewing the existing risk and impact assessment tools and proposing how these can be strengthened, it aids the national policy process in understanding how loss and damage will impact communities and nature.