The transitions of economies, industries and organizations to low carbon are already triggering significant changes in economic activity, asset values and profitability across the world. These shifts mean both identifying and executing optimal choices on low carbon transitions are becoming increasingly complex.
When you face multiple potential transition pathways and increasing volatility, your success will depend on your ability to assess how each pathway and strategic choice could impact your business model and potential to deliver strategy. And when the drivers of transition risk are changing – from regulations, consumer and investor preferences to shifts in technology and policy – your resilience will also rely on regularly reviewing and updating your chosen transition pathway and disclosures.
To strengthen your resilience on the journey to a lower carbon economy, we help transform your transition risk stance from reactive to proactive by identifying, quantifying and managing your transition risks.
Identify climate transition risk
Identify your climate transition risks and how they’re amplifying your existing exposures with our industry-specific climate insight and enterprise risk management expertise.
What’s driving your transition risks and which of these are the most material? How do you compare against peers in your industry?
We work collaboratively with you to reveal the answers, evaluating the potential impacts on your business model by analyzing changing markets, consumer behaviors, policies and technological advancements.
We partner with you to identify and prioritize the transition risks specific to your industry, reviewing all the key value chains where you have transition risk exposure.
Quantify climate transition risk
Managing your transition risk effectively starts with putting credible and meaningful numbers against both your exposures and your options for mitigating risks and maximizing opportunities. Getting this right and avoiding underestimating your potential liabilities or losses means using robust quantification methods. We help you consider a breadth of factors that reflect emerging drivers of transition risks and opportunities in the sectors and markets where you operate.
We help you achieve a wider view of transition risk strategy by quantifying, where plausible, the impacts on future revenue, opex or capex across multiple transition risk scenarios.
Manage climate transition risk
Working closely with you, we integrate transition risk management strategies into your existing processes. We can also advise on how you can capitalize on the opportunities of the transition to a lower carbon economy. This analysis can support you in meeting increasingly complex disclosures requiring risk quantification, such as Corporate Sustainability Reporting Directive (CSRD) and International Sustainability Standards Board (ISSB) standards. You can also use our analysis in the context of stress tests and other regulatory reporting requirements for banks and insurers.
How might you respond to transition? Will you diversify your business portfolio, explore new markets and technologies or take a new approach to financial strategy, such as transferring risk to equity and credit markets? We can recommend strategies to help you mitigate transition risks and protect against downsides. By de-risking your business, and demonstrating this to investors, you can help lower your cost of capital, increase your valuation and ensure your continued financial resilience.
Discover a smarter way to optimize climate transition risk. Get in touch.
