Financial assessment of sustainability risks and opportunities

With the European Sustainability Reporting Standards (ESRS) and international guidelines such as those of the International Sustainability Standards Board (ISSB), the anticipated financial effects of sustainability risks and opportunities are moving into the focus of corporate reporting. Companies must systematically identify, quantify and disclose these effects. The basis for this is the double materiality analysis. It considers both how the company affects the environment, society and governance (inside-out) and how these factors influence the company (outside-in).

Current regulatory requirements at a glance

The ESRS (based on Simplified ESRS published in December 2025) require that the financial impact on the financial position, financial performance and cash flows be presented for short, medium and long-term periods. The long-term period covers more than five years. From 2027, reporting will be required in stages: qualitative information will be sufficient in the first three years, while quantitative information will be mandatory from the fourth year onwards. Comparable requirements can also be found in the international IFRS Sustainability Disclosure Standards (IFRS S1 and S2) of the ISSB.

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Making sustainability measurable

Considering financial effects is not only crucial for compliance but also enables sustainability to be integrated as a value driver into strategy, risk and opportunity management, and financial planning.

Strengthen resilience and utilise opportunities

Data driven analysis creates transparency and provides a basis for wellfounded decisionmaking, strengthens competitiveness, and improves access to capital.

At the same time, it is essential to address complex tasks, as the implementation of ESG transformation entails a wide range of challenges, including:

Evaluating and modelling ESG risks and opportunities despite uncertainties,
Integrating non-financial data into governance processes such as carbon emissions data,
Ensuring data quality and availability,
Close collaboration between finance and sustainability teams.

Practical experience reports

Our goal was to set the course early for future ESRS reporting. Involving multiple departments is essential to bring together all relevant data. Together with KPMG, we developed an approach to connect the processes for identifying risks and opportunities in the sustainability report with the financial planning processes.

Stefanie Schnee: Senior Vice President Corporate Accounting & Tax, Wacker Chemie AG

Our approach for your success

With our structured approach, we support your company in implementing an efficient procedure tailored to your individual circumstances and needs. You will receive practical recommendations for action, bespoke modelling tools, and benchmarking of model assumptions. Through our collaborative approach, you will also learn to perform the quantifications yourself in subsequent years or for other sub-areas.

Stakeholder identification and specification of risks and opportunities

Detailed narrative specification of financial effects resulting from risks and opportunities
Value driver logic

Development of a logic covering material financial and non-financial value drivers
Data collection & quality assurance

Data collection from various sources

Ensuring high data quality and defining value ranges for key value drivers
Scenario analysis & forecasting techniques

Sensitivity analysis, scenario analysis and Monte Carlo simulation

Integrated Planning 2.0
Result interpretation & reporting

Analyse implications, document findings and ensure transparency

Implications on financial reporting and business strategy

Practical experience reports

The assessment of the long-term risks and opportunities resulting from the transformation has a significant impact on corporate strategy. KPMG’s structured approach helped us to review our existing assumptions regarding risks and opportunities and to further develop our own models.

Dr. Peter Gigler: Head of Corporate ESG, Wacker Chemie AG

Your added value with KPMG

Interdisciplinary team from the areas of regulatory, strategy and valuation
Proven methods for quantifying ESG risks and opportunities
Customized, audit-ready results
Driving efficiency through the strategic deployment of artificial intelligence

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Practical experience reports

The project showed me that you can't start early enough to address this issue. We worked with simple, striking risks and opportunities. However, the dimensions became quite complex. The combination of sustainability expertise and assessment know-how from both our side and KPMG has enabled us to achieve interesting results. A great project with the insight that the information can be interesting not only for reporting purposes.

Anke Schrepfer: Head of Corporate Accounting and Sustainability Reporting, Wacker Chemie AG