New discussion paper: Evaluating corporate climate risks – scenario analysis following the guidelines of the TCFD

31.05.2019

The newly published discussion paper on the evaluation of climate risks is based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), practical experience from the Peer Learning Group Climate of the Global Compact Network Germany (DGCN) and the results of a multi-stakeholder workshop. The publication provides guidelines for corporate practice and invites experts to take part in a professional exchange on ideas around the topic.

The results of a study carried out by the Financial Stability Board concluded that capital investors insufficiently take into account climate-change-related risks and opportunities of companies in their investment decisions. At the same time, only few companies assess medium to long-term risks and opportunities related to climate change in a structured manner or report in a transparent way on potential current and future financial impacts thereof. Therefore, in December 2015, the Financial Stability Board founded the TCFD as a working group to develop recommendations for consistent corporate climate reporting that takes into account financial risks and opportunities of climate change.

The Peer Learning Group Climate, which was launched in 2015 by the Global Compact Network Germany (DGCN), consists of companies from chemical/pharmaceutical, energy, retail, service, transportation and technology industries. In 2018, the group intensively discussed the recommendations of the TCFD and the associated challenges for businesses. In webinars and meetings, experts from large German companies exchanged their experiences on the implementation of the recommendations within their companies. Due to the topic gaining importance, the DGCN and econsense further organized a multi-stakeholder workshop with 70 participants from the real economy and the financial sector as well as representatives of civil society. Participants exchanged views on identifying, evaluating and reporting on the financial effects of climate change.

This publication summarizes the core findings of the discussion and recommendations for the evaluation of corporate climate risks and chances. It focuses particularly on six steps for carrying out a scenario analysis in accordance with the recommendations of the TCFD.

This publication is also available in German.

Further discussion papers on internal carbon pricing in companies and science-based targets were also published in 2018.

If you have any suggestions or additions to make to this paper, or would like to be an active participant in further discussions of the topics covered by the Peer Learning Group Climate, then please get in touch with Lena Kern.

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