Climate risk and resilience

climate risk and resilience

What we do

Climate resilience is the ability to anticipate, prepare for, and respond to hazardous events, trends, or disturbances related to climate. Improving climate resilience involves assessing how climate change will create new, or alter current, climate-related risks, and taking steps to better cope with these risks.

Businesses prepare for risks every day and must factor climate risks into existing risk management frameworks to become more climate resilient.

How we do it

Climate resilience is often associated with acute events – like heat waves, floods, hurricanes, or wildfires – that will become more frequent or intense as the climate changes. However, good resilience planning also accounts for chronic events, like rising sea levels, worsening air quality, and population migration. We collaborate with our partners so they evolve their risk management process, given that climate change is a “threat multiplier” that makes existing enterprise risks worse. In disclosing climate risks to investors, we leverage the Taskforce for Climate-related Financial Disclosures (TCFD) to provide a framework for assessing risks and opportunities:

Governance: Disclose the organization’s governance around climate-related risks and opportunities
Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s business, strategy, and financial planning
Risk management: Disclose the process used by the organization to identify, assess, and manage climate-related risks
Metrics and targets: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities

The process to risk management must be integrated to understand the complexity of the climate risks and drive solutions, all while aligning with TCFD. Key steps include:

On a more operational level, we also encourage our partners to build resilience by developing disaster recovery plans, adding onsite energy resources, and identifying backup supply and distribution chains.

Why we do it

Climate change is reshaping industries. Real assets and infrastructure are threatened by extreme weather. Financial firms face rising loan risks. Energy companies must adapt to a low carbon economy.

Climate-exacerbated disasters cost companies and investors billions. Natural capital costs were 77% higher than net income for major global companies in 2019, and 66% of such companies will have at least one asset under high physical risk in 2050.

Even as we work to avert the worst potential impacts of climate change, we must become more resilient to those impacts that are now unavoidable. These impacts often disproportionately affect low-income communities and communities of color, reinforcing the need for equitable and proactive resilience planning and resource allocation.

Learn more about
our capabilities

We bring a portfolio of mutually reinforcing services to support organizations to accelerate their ESG journeys and ensure positive ROI for shareholders and stakeholders.