The European Green Deal, the EU’s ambitious one trillion euro plan to make the EU climate neutral by 2050, has been referred to as Europe’s “man on the moon moment” by EU Commission President Ursula von der Leyen. The EU initiative is a direct response to the ticking time bomb that is climate risk.
Naturally, Belgium’s business executives understand that climate risk is something that must be addressed. Although they may not have the skills or strategy yet, there is a growing awareness that the inherent risks associated with climate change could have a serious financial impact if not appropriately dealt with.
The COVID-19 pandemic has demonstrated the catastrophic effects a health crisis can have for the global financial system and has sharpened the focus of business leaders on climate change as a similar health hazard.
Understanding climate risk in the wider sense and how to address it is a brand-new area for many companies, and it presents its own set of challenges. Recognizing climate risk is one thing, having a clear strategy and implementing it is another. It requires a thorough understanding of the issues and how to tackle them.
A significant amount of knowledge, solutions, and finance (the EU Green Deal) to tackle the effects of carbonization is already available. However, much work needs to be done to inform and educate companies about the different types of solutions and expertise that are needed to (a) identify and measure climate risk, (b) adapt a company’s business and its wider supply chain to reducing its carbon footprint, and (c) entrench the philosophy of adaptability into its core business model to mitigate climate risks and capitalize on climate opportunities.
In the first report of its kind, KPMG and Eversheds Sutherland surveyed the opinions of business leaders from more than 500 global companies about the risks and opportunities that climate change poses to their organizations. The survey found that corporate leaders are well aware of the risks associated with climate change and that climate risks equate to financial risks. At the same time, most leaders felt they weren’t yet equipped to deal with the challenges of creating a net zero-carbon business. Nevertheless, facing internal and external pressures, a majority indicated that they will need to take more aggressive steps toward decarbonization, recognizing that such a strategy is not only good for the environment but also good for business.
Corporate leaders need to address the risks associated with climate change and move toward decarbonization.
Download the survey report to learn more:
To learn more about this report and insights discussed, or to discuss your climate risk roadmap, please contact your local KPMG advisor or the contributors in this report.