This document defines vulnerability and disaster risk. Vulnerability refers to characteristics that make individuals, communities, or assets susceptible to harm from hazards. It can be physical, social, economic, or environmental. Vulnerability depends on exposure to hazards as well as resistance and resilience. The Philippines, for example, is highly vulnerable to typhoons due to high exposure, lack of protection, and limited ability to recover. Understanding vulnerability is important for assessing disaster risk, which is a function of hazards and vulnerability moderated by response capacity. Reducing vulnerability involves measures like building codes, insurance, economic diversity, and preparedness.