Sustainability Risks

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Sustainability Risks

Sustainability risks are different to traditional risk types, for instance, environmental risks tend to be non-linear in their propagation and occur over a longer time horizon. These can affect multiple risk categories simultaneously.

Physical and transition risk drivers impact economic activities, which in turn impact the financial system. This impact can occur directly, through for example lower corporate profitability or the devaluation of assets, or indirectly, through macro-financial changes.

There are multiple risks to assess in your ESG work:

  • Transition risks – a risk resulting from mitigation challenges as societies decarbonise
  • Physical risks – a risk of acute and/or chronic weather events which impact operations
  • Reputational risks – a risk that an ESG issue causes a detrimental impact to brand and reputation
  • Regulatory and reporting risks – a risk of non-compliance to sustainability disclosure regulation and/or marketing sustainable when not sustainable
  • Conduct risk – a risk that action leads to customer detriment or negatively impacts market stability

We can support your risk management and -processes in multiple ways

Governance - update risk frameworks and policies for relevant risk types and integration of climate risk within Risk Appetite and management reporting metrics.

Risk management - establish a uniform risk taxonomy and risk categories and support in creating tools to identify and assess physical and transition risks.

Climate risk and opportunity assessment - data-centric approach to assess the potential risks and opportunities at your organization. Supporting

Data and tools - scenario analysis, ESG scoring, risk and control assessments.

ESG in Internal Audit and in Internal Controls - reviews which help to highlight policies, controls, and responsibilities with respect to ESG strategies and tactics as of a particular point in time in specific ESG areas

Human rights risk and impact assessments – to evaluate your organizations impact on human rights and understanding the risks involved


ESG risk assessment provides you data and insight to explore the multiple opportunities:

  • Product and service innovation providing a competitive advantage
  • Resource and energy efficiency to ensure operations are effectively utilized
  • Enhancing your brand in the market resulting in a stickier client base
  • Demonstrating your resilience and transparency to the market
  • Communicating accurate and transparent data to the market

We also provide Sustainability as a Service which provides holistic support for clients and covers all sustainability-related services for the client, and range of sustainability professionals at your service.

Contacts

Iida Pulliainen

Iida Pulliainen

Business Development Manager, Climate & Sustainability

Iida Pulliainen työskentelee Deloitte Suomen vastuullisuusliiketoiminnan parissa. Hänellä on kokemusta vastuullisesta rahoituksesta ja taloudellisesta inklusiivisuudesta. Hän on toiminut asiantuntijat... Lisää