(C2.1) Does your organization have a process for identifying, assessing, and responding to climate-related risks and opportunities?
Change from last year
No change
Rationale
For many companies, climate change poses significant financial challenges and opportunities, now and in the future. CDP asks about a process for identifying, assessing, and responding to climate-related risks and opportunities so that data users may gauge the thoroughness of your company's understanding of its exposure to climate-related issues.
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.
Response options
Select one of the following options:
- Yes
- No
Requested content
General
- Select "Yes" if you have any process in place for identifying, assessing, and responding to climate-related risks and opportunities, regardless of how thorough it is. You will be able to provide further details in the subsequent questions.
- Only select "No" if you do not have any form of process for identifying, assessing, and responding to climate-related issues.
Explanation of terms
- Climate-related risk, in line with the TCFD, refers to the potential negative impacts of climate change on an organization. Physical risks emanating from climate change can be event-driven (acute) such as increased severity of extreme weather events (e.g., cyclones, droughts, floods, and fires). They can also relate to longer-term shifts (chronic) in precipitation, temperature and increased variability in weather patterns (e.g., sea level rise). Climate-related risks can also be associated with the transition to a lower-carbon global economy, the most common of which relate to policy and legal actions, technology changes, market responses, and reputational considerations.
- Climate-related opportunity, in line with the TCFD, refers to the potential positive impacts on an organization resulting from efforts to mitigate and adapt to climate change, such as through resource efficiency and cost savings, the adoption and utilization of low-emission energy sources, the development of new products and services, and building resilience along the supply chain. Climate-related opportunities will vary depending on the region, market, and industry in which an organization operates.
- 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).
