Business is under pressure to tackle the financial risks of climate change. KPMG can help.
Identifying and reporting climate-related financial risk: How KPMG can help.
Climate change is a clear, long-term risk facing the world. This was recognised in the World Economic Forum’s 2020 Global Risk Report as a systemic threat and should now be firmly on every organisations radar.
More frequent and severe weather events, such as bushfire and prolonged droughts, are pervasive with substantial adverse impacts for society and business. These are symptomatic of a changing climate. Similarly, as markets, governments and capital providers begin to pivot their activities towards the transition, the change will disrupt existing dynamics and drive innovation leading to new risks and opportunities for organisations.
As these climate risks or opportunities crystallise in the form of business disruption, policy uncertainty or stakeholder impact, organisations will need a more comprehensive approach, which includes understanding, identifying, assessing, responding to and disclosing climate risk.
|The Taskforce on Climate Related Financial Disclosures (TCFD) have created a step change in the content and standard of market disclosure, and consequently expectations and scrutiny from investors and the wider stakeholder universe will increase.|
How we can help
For more than a decade our specialist team has been helping businesses understand and respond to climate risk. Our team supports clients from the boardroom to the boiler room, helping navigate the complex interplay of physical climate change, economic implications and organisational requirements.
Whether it be understanding how to implement the TCFD recommendations or beginning the process of recognising how climate change will impact your business, KPMG professionals will work with you to help your organisation prepare and respond.
We provide the insights and advice to not only recognise exposure to climate risk; but to identify the necessary steps to ensure organisations are appropriately managing such risks.
Our services include
Governance and capacity building – Integrating climate change into risk, governance and operational frameworks and Board, executive and organisational capacity building.
Developing climate strategy - Helping organisations understand how to strategically respond to climate change. Through climate scenario analysis processes we can to help you understand the operational, capital, policy, people and stakeholder factors you need to consider – and how to respond over different business horizons.
Scenario analysis – We utilise the latest physical and social science of climate change to understand your risks and opportunities; identify impacts across the entire value chain; guide quantification of financial impacts at the asset and business level; integrate climate-risk in strategy and develop strategic responses; and factor climate risk in investment strategies.
Identify, assess and manage climate-related risks and opportunities – Analysing processes to identify and assess climate-risk; map direct and indirect climate-related risks throughout the value chain and across relevant geographies; and improve the management of climate-risk.
Develop metrics and targets, and annual reporting – Conducting gap analysis and benchmarking; drafting or reviewing climate-related narratives in annual disclosures; developing climate-related metrics and targets, including risk and opportunity assessment, emissions reduction or resilience metrics; reporting on green bonds and climate impact investing; and tools and data collection processes to monitor, manage, and report on metrics.