Sustainability & ESG

Climate Risk & TCFD / ISSB S2-Aligned Disclosure

Physical + transition risk scenario analysis with financial materiality quantification

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Framework elements

Climate Risk & TCFD / ISSB S2-Aligned Disclosure — element by element

Each element below has its own dedicated implementation page with focused methodology, flow chart, and individual significance for organisations. Click any element to explore.

Pillar 1 — Governance
Board Oversight of Climate Risks and Opportunities

Describe the board's oversight of climate-related risks and opportunities

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Management's Role in Assessing and Managing Climate Risks

Describe management's role in assessing and managing climate-related risks and opportunities

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Pillar 2 — Strategy
Climate-Related Risks and Opportunities (Short / Medium / Long Term)

Describe the climate-related risks and opportunities identified across short, medium, and long term

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Impact of Climate Risks on Business, Strategy, Financial Planning

Describe the impact of climate-related risks and opportunities on the organisation's businesses, strategy, and financial planning

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Resilience of Strategy Under Different Climate Scenarios (incl. 2°C / 1.5°C)

Describe the resilience of the organisation's strategy under different climate scenarios, including 1.5°C or 2°C scenarios

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Pillar 3 — Risk Management
Process for Identifying and Assessing Climate Risks

Describe the organisation's processes for identifying and assessing climate-related risks

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Process for Managing Climate Risks

Describe the organisation's processes for managing climate-related risks

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Integration into Overall Enterprise Risk Management

Describe how climate risk processes are integrated into the overall ERM

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Pillar 4 — Metrics & Targets
Metrics Used to Assess Climate Risks and Opportunities

Disclose metrics used to assess climate-related risks and opportunities consistent with strategy and risk management

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Scope 1, Scope 2, and Scope 3 Greenhouse Gas Emissions

Disclose Scope 1, 2, and (if appropriate) Scope 3 GHG emissions and related risks

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Targets to Manage Climate-Related Risks and Performance Against Them

Describe targets used to manage climate-related risks and opportunities, and performance against them

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Programme overview

Climate Risk & TCFD
/ ISSB S2-Aligned Disclosure

Climate risk disclosure moved from voluntary TCFD (2017–2023) to mandatory ISSB IFRS S2 (effective Jan 2024) and EU ESRS E1 (effective FY 2024). The methodology architecture remains TCFD's four pillars (Governance / Strategy / Risk Management / Metrics & Targets), but ISSB and ESRS demand quantitative scenario analysis — typically a 1.5°C orderly transition scenario (NGFS Net Zero 2050) and a 4°C high-warming physical scenario (NGFS Current Policies or IEA STEPS). Physical risk assessment now requires asset-level geographic mapping against IPCC AR6 hazard projections — heat stress (CDD increase), water stress (WRI Aqueduct, ICE Climate, Munich Re NATCAT), sea-level rise (RCP 8.5 / SSP 5-8.5 projections), tropical cyclone intensity, and wildfire frequency. Transition risk quantification translates carbon-price trajectories (typically $50–$200/tCO₂ by 2030 in NGFS Net Zero), demand destruction in carbon-intensive sectors, technology displacement timelines (EV vs ICE, green H2 vs grey, electric arc vs blast furnace), and stranded-asset writedown logic into financial impact on EBITDA, asset values, and cost of capital. The hardest decisions are scenario boundary selection, time-horizon weighting (short / medium / long), and financial-impact materiality threshold setting.

Climate Risk & TCFD / ISSB S2-Aligned Disclosure — Overview
How we deliver it

Our implementation model

A practical, phased delivery approach — from gap assessment through operational embedding — built around your regulatory context.

Climate Governance & Strategy Documentation

Document climate governance per TCFD Recommendations — board oversight (committee charter, frequency), management role (CRO / CSO / risk function), strategy integration (planning, capital, M&A); align with IFRS S2 / EU CSRD ESRS E1.

Physical Risk Scenario Analysis

Conduct physical risk per IPCC AR6 scenarios — RCP 4.5 / 8.5 / SSP 2-4.5 / 5-8.5; assess acute (storm, flood, wildfire, heatwave) and chronic (sea-level rise, temperature, precipitation); align with NGFS scenarios and corporate asset footprint.

Transition Risk Scenario Analysis

Conduct transition risk per IEA scenarios — Net Zero 2050 (NZE), Announced Pledges (APS), Stated Policies (STEPS); assess policy (carbon pricing, regulation), technology (substitution), market (demand shift), reputation (stakeholder pressure).

Risk Metrics & Quantification

Quantify climate risk per metric — physical (asset-level damage, business interruption, supply-chain disruption), transition (carbon liability, stranded asset, revenue at risk); align with TCFD metrics and corporate financial reporting.

Climate Opportunity Assessment

Identify climate opportunities — resource efficiency, low-carbon products / services, markets (renewables, EVs, green H₂), resilience (adaptation services); align with corporate growth strategy and capital allocation.

TCFD / IFRS S2 Disclosure & Integration

Author TCFD / IFRS S2 disclosure per four pillars — Governance, Strategy, Risk Management, Metrics & Targets; integrate with annual report / 10-K / CSRD; align with mandatory disclosure deadlines per jurisdiction.

What the programme covers

Climate Risk & TCFD — in full scope

Physical risk assessment — asset-level geocoding against IPCC AR6 SSP 1-2.6 / 2-4.5 / 5-8.5 projections
Acute physical hazard mapping — tropical cyclone, flood, wildfire, drought (Munich Re NATCAT, ICE Climate, WRI Aqueduct)
Chronic physical hazard mapping — sea-level rise, heat stress, precipitation pattern change
Transition risk quantification — policy, technology, market, reputation pathways
NGFS scenario application — Net Zero 2050, Disorderly Transition, Current Policies, Below 2°C
Carbon-price trajectory modelling — $50–$200/tCO₂ by 2030 (NGFS NZE), CBAM levy exposure
Sector-specific transition pathway — IEA NZE / SBTi SDA for steel, cement, chemicals, aviation, shipping
Stranded-asset analysis with discount-rate sensitivity for long-lived industrial assets
Financial materiality assessment — EBITDA, asset value, cost-of-capital impact
Resilience opportunity quantification — adaptation, electrification, BVCM, circular models
Climate Risk & TCFD / ISSB S2-Aligned Disclosure — Coverage
Business value

Value of Climate Risk & TCFD / ISSB S2-Aligned Disclosure

Physical & Transition Climate Risk Reduction
  • Surfaces asset-level climate vulnerabilities — flood, fire, water-stress, heat
  • Drives adaptation capex prioritisation against quantified hazard projections
  • Reduces stranded-asset exposure through early scenario stress-testing
  • Strengthens community-resilience and just-transition planning
TCFD / ISSB IFRS S2 Climate Defence
  • Audit-defensible under ISSB IFRS S2 and EU ESRS E1
  • Withstands SEC Climate Rule (when active) and SEBI BRSR Core scrutiny
  • Aligns with UK TPT, Australian AASB S2, Japan SSBJ, and Canadian CSDS disclosure
  • Provides regulator-grade NGFS scenario application
Climate Risk Governance & Scenario Quality
  • Embeds climate scenarios into capital allocation and asset-replacement decisions
  • Sharpens insurance / underwriter dialogue on physical-risk exposure
  • Supports M&A climate due diligence with quantitative evidence
  • Builds organisational climate literacy from board to operating teams
Climate-Related Asset & Finance Risk
  • Avoids stranded-asset writedowns through proactive transition planning
  • Captures green / transition / sustainability-linked finance pricing — 5–15 bps typical
  • Reduces underwriter loadings via quantified physical-risk evidence
  • Pre-empts CBAM and carbon-tax exposure (€70–100/tCO₂ projected by 2030)
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