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.

A climate awakening for companies?

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.

Climate change and corporate value - Infographic


Corporate leaders need to address the risks associated with climate change and move toward decarbonization.

Download the survey report to learn more:

  • Climate change has become a significant boardroom issue requiring action: There is growing recognition among businesses that climate change may very likely result in substantial transformation of their business as well as bring new opportunities. However, a substantial knowledge gap exists about what is required to create a net zero-carbon business.
  • Most companies treat climate risk as a serious business issue: There is clear recognition that climate risk equates to financial risk. In addition, companies are now much more focused on becoming climate resilient and recognizing the importance of climate risk to the success of their business strategies
  • Companies are being pressured to implement decarbonization strategies: Investors are key influencers and have become very focused on climate issues when evaluating investment and divestment decisions. In addition, regulators and employees have become an important factor, and there is an ever-increasing consumer demographic that has put climate change at the top of their priorities.
  • The new focus on climate risk is manifesting itself on companies’ People Agenda: Climate action is increasingly becoming a key driver of executive remuneration via long-term incentive planning. Also, as the war for talent heats up, the rapid polarization of younger generations on the topic of climate change has become a concern across the corporate landscape.
  • Critical barriers to decarbonizing business remain: These include, high costs of decarbonization; inability to source technology solutions; limited skills and expertise; and lack of awareness of potential solutions to finance climate resilience and decarbonization strategies.

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.