Process for Managing Climate Risks
We help you describe the processes you use to manage climate related risks
What this element is and why it matters
TCFD Risk Management Disclosure (b) asks your organisation to describe how the climate risks you have identified are actually managed. That means setting out your decisions to accept, avoid, transfer or reduce each risk, the treatment plans behind them, the monitoring in place and your performance against those plans. Our team helps you build and evidence all of this.
Individual significance for organisations
Disclosure RM b is where you set out what your organisation actually does with the risks it has identified. Investors look for evidence of substantive treatment rather than passive acceptance of the exposure.
Contribution to Climate Risk and TCFD and ISSB S2 Aligned Disclosure
Disclosure RM b operationalises the identification work in RM a. It also feeds your Metrics and Targets disclosures by supplying the metrics that measure how effective your treatment has been.
What compliant execution looks like
How we implement this element
A focused six step methodology calibrated to deliver process for managing climate risks as a working capability rather than a documented compliance artefact.
Working to ISO 31000, we define the accept, avoid, transfer and reduce options for each risk and align them with your corporate risk appetite.
For each material climate risk we develop a treatment plan with an owner, a target date, a KPI and a budget.
We identify the hedging instruments such as carbon offsets and weather derivatives and the insurance coverage for catastrophe and transition exposure, and we specify the scope of each.
We catalogue the capital investments that address your climate risks, spanning physical adaptation, technology substitution and supply chain diversification.
We establish the monitoring cadence and integrate it with your management committee reviews and your board reporting.
We author RM b to TCFD and align it with IFRS S2 and CSRD ESRS.
Element implementation flow chart
A decision gated workflow that shows the actual sequence of activities from initiation through steady state operation, with key decision points highlighted.
What we produce
- A risk treatment framework
- Treatment plans for each material climate risk
- Disclosure RM b content to TCFD
- An adaptation investment pipeline with cost and benefit analysis
- A hedging and insurance coverage schedule
- A residual risk register with appetite sign off
Where execution fails
- Treatment selected but never actually funded
- Hedging and insurance overstated with no detail on the policy coverage behind it
- Monitoring left absent so the effectiveness of the treatment stays unknown
- Residual risk left unacknowledged with no appetite sign off behind it
Codes this element is built on
Explore related elements in this framework
Climate Risk and TCFD and ISSB S2 Aligned Disclosure full element index
Talk to us about implementing Process for Managing Climate Risks
We can scope this element implementation against your facility, regulatory context, and existing management system maturity, then integrate it with the other Climate Risk and TCFD and ISSB S2 Aligned Disclosure elements you already operate.