What is a climate risk assessment?
What is a climate risk assessment? A climate risk assessment describes the process to identify and assess climate-related physical risks and opportunities.
The assessment involves analysing both:
1. Climate-related physical risks in own operations and along the upstream and downstream value chain. In particular, how assets and business activities may be exposed and are sensitive to climate-related hazards such as fire, drought, and flooding.
2. Climate-related transition risks and opportunities in own operations and along the upstream and downstream value chain. In particular, assessing how business activities are/will be exposed in the transition to a lower-carbon economy. This could include identifying how changes in regulation, tax, or consumer sentiment could affect the business.
