This page presents reporting guidance and scoring details for a single question. Click here to access the complete reporting guidance or scoring methodology for CDP's Climate Change questionnaire.
(C2.2) Describe your process(es) for identifying, assessing and responding to climate-related risks and opportunities.
Question dependencies
This question only appears if you select "Yes" in response to C2.1.
Change from last year
Modified guidance
Rationale
Understanding how a company integrates the consideration of climate-related issues into its overall risk management framework provides insight into the thoroughness of the risk management processes employed by organizations. Companies that fully integrate and frequently assess climate-related risks and opportunities across their value chain and over a range of time-horizons may be better equipped to handle longer-term uncertainties and liabilities.
Connection to other frameworks
TCFD
Risk Management recommended disclosure a) Describe the organization’s processes for identifying and assessing climate-related risks.
Risk Management recommended disclosure b) Describe the organization’s processes for managing climate-related risks
Risk Management recommended disclosure c) Describe how processes for identifying, assessing, and managing climate related risks are integrated into the organization’s overall risk management.
S&P Global Corporate Sustainability Assessment
Climate Risk Assessment - Physical Risks
Climate Risk Assessment - Transition Risks
Climate Change Strategy
TCFD Disclosure
Response options
Please complete the following table. You are able to add rows by using the “Add Row” button at the bottom of the table.
Value chain stage(s) covered | Risk management process | Frequency of assessment | Time horizon(s) covered | Description of process |
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Select all that apply:
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Select from:
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Select from:
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Select all that apply:
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Text field [maximum 7,000 characters] |
[Add Row]
Requested content
General
- You are requested to provide information on the risk management processes at all the stages of the value chain applicable to your organization.
- Upstream value chain refers to activities, products and services that are inputs to the activities of your business, sourced from third parties. This may include the regulations and policies applied by governments, or the products and services provided by your suppliers (i.e. the supply chain).
- Downstream value chain refers to the third parties benefiting from the outputs, products and services of your business activities. This may be your customers and clients, or the organizations and projects your business invests in.
- Note that if your response to this question refers to the position of employees relevant to your risk management processes, do not include the name of any individual or any other personal data in your response.
Value chain stage (column 1)
- Select all the stages of the value chain that your risk management process covers.
- If you have separate processes for different value chain stages, you may add rows to describe those processes separately.
Risk management process (column 2)
- Select the option that best describes how your process for identifying, assessing, and responding to climate-related risks and opportunities is integrated into your overall risk management framework. If your organization has more than one process in place, select the one that is most commonly employed. You will have the opportunity to expand further in column 5 “Description”.
- Integrated into multi-disciplinary company-wide risk management processes: a documented process where climate-related risks and opportunities are identified and assessed in an integrated way in the company’s centralized enterprise risk management program covering all possible types/sources of risks and opportunities
- A specific climate-related risk management process: a documented process that identifies, assesses and responds to climate change risks and opportunities separate from other business risks and opportunities.
Frequency of assessment (column 3)
- Select the option that describes how often climate-related risks are assessed. If climate-related risk management is integrated into company-wide risk management processes then the frequency of assessment will be the same throughout the enterprise risk management process.
Time horizons covered (column 4)
- Choose all the time horizons that are considered in your climate-related risk assessment. For example, if you only consider risks that may impact your business in the short term, in line with your definition of time horizons provided in C2.1a, you should select “short-term” here. Or, if you consider, short-term, medium-term and long-term horizons, select all three.
- In case none of the time horizons provided in C2.1a are covered by this risk management process, select “None of the above/ Not defined” and explain the applicable time horizon or why it is not defined in the column “Description”
Description (column 5)
- Describe your process for identifying, assessing and responding to climate-related risks and opportunities, including:
- The process used to determine which risks and opportunities could have a substantive financial or strategic impact on the organization;
- How your organization makes decisions to mitigate, transfer, accept or control the identified climate-related risks and to capitalize on opportunities.
- An explanation of the frequency of assessment and time horizons reported in columns 3 and 4.
Note for financial services sector companies
- This question is asking about the processes used to identify, assess and respond to climate-related risks and opportunities within your operations and your supply chain.
- There is a separate question on portfolio risk management.
Explanation of terms
- Risk management: Risk management involves identifying, assessing and responding to risk to make sure organizations achieve their objectives. It must be proportionate to the complexity and type of organization involved (based on Institute of Risk Management, 2016).
C2.2 - Scoring criteria
Disclosure scoring criteria
Column 'Value chain stage(s) covered' must be completed to be eligible for points at Disclosure level
Points will be awarded per completed cell in proportion to the number of rows disclosed. Partially completed rows will not receive full points
A maximum of 5 points is available for this question
Awareness scoring criteria
Column 'Value chain stage(s) covered' must be completed to be eligible for Awareness points
Points will be awarded per completed row in proportion to the number of rows disclosed
A maximum of 3 points is available for this question
Management scoring criteria
Full Awareness points must be awarded to be eligible for Management points
i) Either 'More than once a year' OR 'Annually' selected in column 'Frequency of assessment' - 1 point
ii) All of the following selected in column 'Time horizon(s) covered' - 1 point:
-'Short-term'
-'Medium-term'
-'Long-term'
iii) All of the following selected in column 'Value chain stage(s) covered' - 1 point:
- 'Direct operations'
- 'Upstream'
- 'Downstream'
If criteria (i) AND (ii) are met additional points will be awarded for the following:
iv) Column 'Description of process' provides a description of the process used to identify, assess and respond to climate-related risks and/or opportunities which could have a substantive financial or strategic impact with reference to the frequency of assessment and time horizon(s) selected in the dropdown options - 1 point
One row scored
Leadership scoring criteria
Full Management points must be awarded to be eligible for Leadership points
All of the following are met - 1 point
'More than once a year' selected in column 'Frequency of assessment' AND
'Integrated into multi-disciplinary...' selected in column 'Risk management process'
One row scored
Point Allocation
Disclosure numerator |
Disclosure denominator |
Awareness numerator |
Awareness denominator |
Management numerator | Management denominator | Leadership numerator | Leadership denominator |
---|---|---|---|---|---|---|---|
5 | 5 | 3 | 3 | 4 | 4 | 1 | 1 |
C2.2 - Scoring criteria for Financial Services companies
Disclosure scoring criteria
Column 'Value chain stage(s) covered' must be completed to be eligible for points at Disclosure level
Points will be awarded per completed cell in proportion to the number of rows disclosed. Partially completed rows will not receive full points
A maximum of 5 points is available for this question
Awareness scoring criteria
Column 'Value chain stage(s) covered' must be completed to be eligible for Awareness points
Points will be awarded per completed row in proportion to the number of rows disclosed
A maximum of 3 points is available for this question
Management scoring criteria
Full Awareness points must be awarded to be eligible for Management points
i) Either 'More than once a year' OR 'Annually' selected in column 'Frequency of assessment' - 1 point
ii) All of the following selected in column 'Time horizon(s) covered' in any row(s) - 1 point:
- 'Short-term'
- 'Medium-term'
- 'Long-term'
One row scored
Leadership scoring criteria
Not scored
Point Allocation
Disclosure numerator |
Disclosure denominator |
Awareness numerator |
Awareness denominator |
Management numerator | Management denominator | Leadership numerator | Leadership denominator |
---|---|---|---|---|---|---|---|
5 | 5 | 3 | 3 | 2 | 2 | 0 | 0 |