Climate and Environmental Risk

Services

Climate and Environmental Risk

Lead the integration into your risk management processes

Climate and environmental risks are materially impacting organisations and play a crucial and ever-growing role in the risk management strategy. Integrating these climate risks into the entire organization can be challenging. Deloitte can help your organisation with the identification and integration of climate and environmental risks, including climate risk modelling, climate scenario analysis and stress testing, setting up a climate risk data infrastructure and climate risk disclosures.

Your challenge

Climate change poses risks and opportunities for organisations across all industries. It is essential to understand the physical, transition and liability risks to which your organisation is exposed. A purpose led approach will accelerate the integration of climate-related and environmental risks and opportunities within your organization. This will safeguard the management of climate- related and environmental risks, the determination of suitable mitigation strategies and ensures that also possible benefits are taken into account. Furthermore, alignment with internal stakeholders is key in achieving your targets, while also external stakeholders including investors and regulators, should be informed about your organisation’s climate risk profile. Deloitte can help your organisation to shape an appropriate approach to manage the climate-related and environmental risks, but also seize the climate-related and environmental opportunities. 

Why Deloitte

We combine our in-depth knowledge of climate risk identification, integration, modelling, stress testing, reporting, data and regulatory considerations with an integral approach. We bring added value by translating strategy and regulation into an efficient and effective implementation into your organisation. Our industry expertise and international network ensures that we can offer tailor-made solutions to complex challenges both on a national and an international scale for your organisation. 

Services

Identification and integration

Financial institutions and corporate organisations are exposed to climate-related and environmental risks. Climate related physical risks are a result of the irreversible and far-reaching changes to the climate system, leading to extreme weather events. At the same time, the transition to a low-carbon economy also results in transition risks for organisations. Next to climate related risks, organisations can be exposed to environmental risks resulting from a decline in the quality and abundance of nature due to for example land use change, natural resource use and pollution. In addition, governments can take protective measures (e.g. nitrogen restrictions) which impact the operations of organisations.  

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Modelling

The objective of climate risk modelling is to assess the impact of climate change on business models, sectors and organizations under different scenarios. Climate risk modelling allows organizations to  quantify potential risk and opportunities stemming from climate risk. Central banks, supervisors and society are increasingly demanding organisations to quantify climate risk. The results of climate risk modelling enable organisations to identify and mitigate the impacts that climate change will have on their business.

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Scenario analysis and stress testing

The objective of climate scenario analysis and stress testing is to assess the impact of climate related risks on an organisation’s business under different climate scenarios. The results enable organisations to identify the main climate related risks they are exposed to, as well as mitigating actions which enable them to better respond to the threat posed by climate related risks. Scenario analysis is widely used by organisations and also recommended by the Task Force on Climate-related Financial Disclosures (TCFD) as an important tool. 

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Data

Sustainability considerations are beginning to be genuinely embedded in every organisation’s strategy. This shift has already started to fundamentally transform business models. This strategic shift is gaining broad traction requiring data of its own to substantiate (commercial) decision making by means of Key Performance Indicators (KPIs). Societal expectations, strategic considerations and regulatory requirements are evolving continuously and will continue to do so at ever increased velocity. This results in new data needs and changing ways in which to process and manage data. The question is: how to keep up in this environment and implement these rapidly evolving requirements? 

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Disclosures

Deloitte supports organisations in navigating through the evolving global disclosure landscape. With new regulations and standards constantly being updated or introduced, the pressure for climate risk disclosures on organisations is increasing. The Financial Stability Board (“FSB”) introduced the Taskforce of Climate-related Financial Disclosures (“TCFD”) as a response to the demand for greater transparency on climate risks. The TCFD can be seen as a strategic risk management framework for climate risk and can feed into sustainability disclosures. Most importantly, it can be used as a tool to understand and integrate climate risk and opportunities into business processes.

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Contact

Eric de Weerdt

Eric de Weerdt

Partner

Eric is Partner of Deloitte Risk Advisory. His primary focus is on banking, both assurance and advice around regulatory reporting and IFRS. His specialization is in assurance and non-assurance engagem... More

Anne-Claire van den Wall Bake-Dijkstra

Anne-Claire van den Wall Bake-Dijkstra

Partner

I am a Partner within the Financial Risk team at Deloitte Risk Advisory. This team focuses on qualitative and quantitative risk management projects in the Netherlands. My main focus area is Sustainabl... More

Tobias Kamphuis

Tobias Kamphuis

Manager

Tobias focuses on Integrated Risk Management and the integration of ESG risks. (Link and link) Integrate Risk Management matches the broad interest and knowledge of Tobias, given that it is the place ... More