Bab 7

Adapt

  1. Introduction
  2. Step 1: Establish a continuous process for climate risk analysis
    1. Get started: Define the scope and required data for your climate risk analysis
    2. Start analyzing your climate risk
    3. Assess exposure and vulnerability across assets and value chain and quantify your risk
    4. Ensure alignment with regulation, benchmarks, and reporting requirements
  3. Step 2: Formulate adaptation goal, and prioritize and implement adaptation pathways
  4. Step 3: Continuously re-evaluate the performance of adaptation options
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Ensure alignment with regulation, benchmarks, and reporting requirements

To ensure alignment with regulation, benchmarks, and reporting requirements, businesses must first stay informed about evolving regulatory landscapes. This involves monitoring new and upcoming regulations at both the national and international levels, such as the EU's Corporate Sustainability Reporting Directive (CSRD) and the U.S. Securities and Exchange Commission (SEC) rules on mandatory physical risk reporting as well as reporting on the planning and implementation of adaptation activities. By keeping abreast of these changes, companies can proactively adjust their internal policies and reporting frameworks to meet or exceed regulatory expectations. Additionally, understanding the specific requirements of different regions and industries is crucial for comprehensive compliance.

Next, businesses should establish internal standards that align with these external regulations and benchmarks. This includes developing robust internal reporting mechanisms that capture relevant data on physical risks and opportunities as well as their planned and implemented adaptation activities (see step 2). Empowering stakeholders within the organization to track and measure these risks ensures that the data collected is accurate and actionable. For instance, integrating climate risk assessments into the overall risk management process can help in identifying potential financial impacts and operational implications. Clear governance structures and workflows are essential to facilitate this integration and ensure that all relevant teams, from HR to the CFO, are aligned and contributing effectively.

Finally, companies should focus on transparent and strategic external reporting to communicate their climate risk management and adaptation efforts to stakeholders. This involves not only meeting mandatory reporting requirements but also considering the strategic benefits of exceeding them. In addition, businesses should continuously monitor the evolving regulatory landscape to understand the implications of new standards on their risk analysis and adaptation strategies. By keeping track of these changes, organizations can proactively adjust their plans to remain compliant and leverage new opportunities for resilience. Depending on the territories you are operating in, relevant sources to access this type of information could be, for example the Corporate Sustainability Reporting Directive (CSRD), the U.S. Securities and Exchange Commission (SEC), and International Sustainability Standards Board (ISSB).

Investors and other stakeholders are likely to increasingly reward companies that lead in managing climate risks, so going beyond the minimum requirements can enhance a company's reputation and attract investment. A company's progress in managing their climate risk increasingly appears in several ESG ratings and specialized information from ESG data providers such as MSCI, Sustainalytics, CDP, FTSE Russell, ISS ESG and S&P Global. By providing detailed and transparent reports, businesses can demonstrate their commitment to sustainability and resilience, thereby building trust and securing long-term support from stakeholders.