1. We identify relevant risks
First, we identify relevant physical and transition risks based on applicable standards (such as the ESRS), sector insights, and the value chain. Where do the risks occur, are they acute or chronic, and within what timeframe do they take place? To assess them correctly, we simultaneously collect information on the locations and key data of your sites and suppliers.
2. We analyse physical risks
To assess physical risks, we use climate scenario analyses, such as those of the IPCC. We combine these with external climate data. As a result, we are able to determine the severity of each risk per site, taking into account the importance of a site or supplier, and estimate the probability of a risk.
3. We analyse transition risks
We approach transition risks in a similar way. Here, we assess severity (based on expected financial impact), probability and timeframe. This creates a clear picture: where transition risks may occur, and what the potential consequences are.
4. We calculate and describe the impact
We estimate the impact of the identified risks. Think of loss of production capacity, disruptions in the supply chain, higher energy or carbon costs, or declining sales. We make a qualitative estimate of the impact, and determine the order of magnitude of the financial impact. The result: a clear overview of relevant climate risks and how they can affect your markets, processes and revenues.
5. We analyse your climate resilience
Finally, we examine the resilience of your strategy to these risks. In the resilience analysis, we assess the adaptability of your business model to the identified risks at three levels: organizational, technical and financial.
A key part of this is analysing the locked-in issues of your key assets and products. We examine whether those issues could affect your CO2 targets, potentially creating new transition risks.
Based on that analysis, we formulate recommendations and draw up an adaptation plan. This not only helps you manage the risks, but also to respond strategically to new opportunities in a changing climate and the climate transition.
The final result is a clear report that gives direction to your climate strategy, boosts stakeholder confidence, and makes your company resilient in the long term. The content of this report can be used for your CSRD or sustainability report.
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