Climate Risk & TCFD / ISSB S2-Aligned DisclosurePillar 3 — Risk Management

Process for Identifying and Assessing Climate Risks

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

Strategic context

What this element is — and why it matters

TCFD Risk Management Disclosure (a) requires organisations to describe the processes used to identify and assess climate-related risks — frequency, methodology, materiality definition, and integration with broader risk management.

Process for Identifying and Assessing Climate Risks

Individual significance for organisations

RM-a is where TCFD discloses HOW the organisation actually identifies climate risks. Investors look for substantive processes (not just lists) that surface emerging risks early.

Contribution to Climate Risk & TCFD / ISSB S2-Aligned Disclosure

RM-a is the process underlying S-a risk identification. Its quality determines whether the organisation has structured climate-risk surfacing or relies on ad-hoc detection.

Key requirements

What compliant execution looks like

Risk identification process per TCFD
Materiality definition aligned with corporate risk framework
Frequency — typically annual with ad-hoc emergent
Integration with broader ERM process
Implementation methodology

How we implement this element

A focused 6-step methodology calibrated to deliver process for identifying and assessing climate risks as a working capability — not a documented compliance artefact.

Process Documentation

Document how climate risks are identified — workshops, expert input, scenario analysis, scientific literature, regulatory horizon scanning.

Materiality Framework

Define materiality criteria — financial threshold, operational severity, stakeholder concern; align with corporate risk matrix.

Frequency + Cadence

Establish annual risk identification cycle with quarterly emergent reviews; align with strategic planning.

Risk Register Build

Maintain climate risk register with TCFD risk types, time horizons, materiality scores, ownership.

ERM Integration

Integrate climate risks into corporate ERM; specify dual-materiality assessment for CSRD compliance.

Disclosure Authoring

Author RM-a per TCFD; align with IFRS S2 / CSRD ESRS.

Implementation flow

Element-implementation flow chart

Decision-gated workflow showing the actual sequence of activities — from initiation through steady-state operation — with key decision points highlighted.

Start
Annual risk identification cycle initiated
Workshops + Expert Input
Multi-disciplinary climate risk identification
Scenario + Literature Scan
IPCC + NGFS + regulatory horizon
Materiality Assessment
Financial + operational + stakeholder
Decision
Material Risk Identified?
Decision gate
Risk Register Entry
TCFD type + horizon + materiality
ERM Integration
Corporate risk register update
Disclosure RM-a Authored
Per TCFD + IFRS S2
Deliverables

What we produce

  • Climate risk identification process documentation
  • Materiality framework with criteria
  • Disclosure RM-a content per TCFD
Common pitfalls

Where execution fails

  • Process documented but not actually executed
  • Materiality threshold too high — material risks excluded
  • Climate risks identified but never enter ERM register
Related elements

Explore related elements in this framework

All elements in this framework

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

Implement this element

Talk to us about implementing Process for Identifying and Assessing Climate Risks

We can scope this element implementation against your facility, regulatory context, and existing management-system maturity — and integrate it with the other Climate Risk & TCFD / ISSB S2-Aligned Disclosure elements you already operate.