The transitions of economies, industries and organizations to low carbon are already triggering significant changes in economic activity, asset values and profitability across the world. These shifts mean both identifying and executing optimal choices on low carbon transitions are becoming increasingly complex.
Measuring carbon emissions alone won’t give you the full picture of how transition trends will impact your business model, financial resilience and industry, or fully capture the risks and opportunities.
When you face multiple potential transition pathways and increasing volatility, your long-term success will depend on your ability to accurately assess how each pathway and strategic choice could impact your business model and potential to deliver value. And when the drivers of transition risk are changing – from consumer and investor preferences to shifts in technology and policy – your resilience will also rely on regularly reviewing and updating your chosen transition pathway.
To strengthen your resilience on the journey to a lower carbon economy, we help transform your transition risk stance from reactive to proactive by identifying, quantifying and managing your transition risks more accurately and dynamically.
We protect your financial performance by clarifying the moves more likely to optimize your transition risks and opportunities. By combining deep and forward-looking data, transition risk expertise and industry-specialized knowledge, we support enhanced strategic decision-making that better manages your climate transition risk.
Identify your climate transition risks and how they’re amplifying your existing exposures with our industry-specific climate insight and enterprise risk management expertise.
What’s driving your transition risks and which of these are the most material? How do you compare against peers in your industry?
We work collaboratively with you to reveal the answers, evaluating the potential impacts on your business model by analyzing changing markets, consumer behaviors, policies and technological advancements.
We partner with you to identify and prioritize the transition risks specific to your industry, reviewing all the key value chains where you have transition risk exposure.
Using our research platform, sector models and whole economy insight together with our understanding of your organization, we can map the material transition risk drivers and rank the key drivers of financial risk and opportunity.
Managing your transition risk effectively starts with putting credible and meaningful numbers against both your exposures and your options for mitigating risks and maximizing opportunities. Getting this right and avoiding underestimating your potential liabilities or losses means using robust quantification methods. We help you consider a breadth of factors that reflect emerging drivers of transition risks and opportunities in the sectors and markets where you operate.
We help you achieve a wider view of transition risk by quantifying the impacts on future revenue, opex or capex across multiple transition risk scenarios. Our analysis enables you to evaluate impacts on business segments and geographies, providing detailed, asset-level risk assessments when you need them.
Our sophisticated approach and proprietary analytical framework overcomes a shortfall of traditional transition risk quantification methods that use carbon pricing as a proxy for transition drivers, which fail to reflect the complexity of factors shaping transitions. With our advanced insight, you can financially validate your current and planned transition risk mitigation and decarbonization efforts in line with conventional financial modeling.
We measure your transition risk as the difference in the value of your business between a business-as-usual scenario implied by the market today and your future value in a range of transition scenarios within lower carbon worlds. We build these scenarios in-house, using hundreds of integrated sector models in line with benchmark scenarios and Intergovernmental Panel on Climate Change (IPCC) carbon budgets. You can use this transition risk quantification into your transition plans and disclosures with confidence.
You can use this transition risk quantification in your transition plans and disclosures with confidence.
Working closely with you, we integrate transition risk management strategies into your existing processes. We can also advise on how you can capitalize on the opportunities of the transition to a lower carbon economy. This analysis can support you in meeting increasingly complex disclosures requiring risk quantification, such as Corporate Sustainability Reporting Directive (CSRD) and International Sustainability Standards Board (ISSB) standards. You can also use our analysis in the context of stress tests and other regulatory reporting requirements for banks and insurers.
How might you respond to transition? Will you diversify your business portfolio, explore new markets and technologies or take a new approach to financial strategy, such as transferring risk to equity and credit markets? We can recommend strategies to help you mitigate transition risks and protect against downsides. By de-risking your business, and demonstrating this to investors, you can help lower your cost of capital, increase your valuation and ensure your continued financial resilience.
