Climate risk is now a core business issue. Climate change is reshaping the business landscape, through physical disruptions to assets and operations, accelerating the urgent need to transition to a low-carbon economy. For companies of all sizes, understanding and managing these risks is no longer optional.
Climate change creates severe risks on companies’ assets, sites and business activities both in direct operations and across value chains. These may originate from physical hazards such as floods or droughts, as well as transition pressures that include new regulations, carbon pricing, or shifting market conditions. These risks can significantly affect business viability, while lenders, investors, and regulators are increasingly expecting companies to identify, assess, and disclose them.
Yet for many organisations, knowing where and how to start remains the biggest challenge for many organisations.
To help address this, we publish a practical guidance on conducting climate risk assessments, which looks at the needs and critical steps for both small companies and those with more companies handling complex business models. Our aim is to make the process more accessible, proportionate and focused - whether businesses are running a first screening or refining an already established methodology.
The guidance walks through the full assessment process step by step: from defining the project objective and selecting sites and economic activities, through mapping climate hazards and transition events, to conducting qualitative and quantitative analysis and presenting results. It also addresses how to use assessment findings effectively, embedding them into risk management, resilience planning, transition strategies, and sustainability reporting.
A key principle throughout is proportionality and prioritisation: the guidance is designed to be useful for organisations with straightforward business models and limited resources, as well as for larger companies with complex operations and geographically dispersed assets. The aim is to move beyond a tick-box exercise and help organisations treat climate risk assessment as a genuine strategic tool.
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New reporting rules require certain large EU companies to include in their management report a non-financial statement. These companies need to begin gathering and auditing information in order to be prepared to publish the required information within good time after the end of the 2017 financial year. Frank Bold recently published a short guide on the Non Financial Reporting Directive that identifies who will be affected and explains how to comply with the new reporting requirements.
