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As sustainability and climate consequences emerge, companies are looking for ways to mitigate climate risk and build more resilient businesses. To thrive, they need to deliver in the near-term while building long-term sustainable business practices. They’re aware of some climate risks but unclear about how to prioritise action.
PwC can help to identify and focus on the right outcomes, and drive the competitive advantage that is unique to your company. We turn complicated concepts into concrete steps, allowing you to mitigate risk while building a business that is equipped for the future. We help establish holistic reporting systems that create a tailored, transparent story of your progress.
Facilitating compliance while creating long-term value
A variety of regulatory and reporting requirements—most notably, the EU’s Corporate Sustainability Reporting Directive (CSRD)—are compelling organisations into action. They’re exploring not only how they can implement tailored solutions for immediate impact but also how they might create sustainable outcomes to build trust with stakeholders—and those who are counting on them.
Climate risk assessment
We help businesses grasp the specific climate risks they face, the regulatory and reporting requirements that govern them, their reliance on nature to drive business value, and the way their risk exposure presents opportunity.
Business climate risk
Organisations that fail to properly plan for climate change leave themselves increasingly exposed to risk. Companies should understand not only the way climate change will impact the environment—and therefore the market—but should also identify specific vulnerabilities within their sustainability goals. That means running models and forecasts to determine the likelihood of various climate scenarios and the potential impact on their business.
Investors and consumers alike are calling for companies to acknowledge and set forth real efforts to reduce emissions. Which means sustainability risk doesn’t just come in the form of impact from climate change, but also as a reputational risk that, long-term, could close off businesses from growth opportunities.
Regulatory pressure
Organisations face the mounting influence of public initiatives to curb climate change and addressing sustainability targets. Sustainability reporting standards and frameworks set by the EU’s Corporate Sustainability Reporting Directive (CSRD), the Task Force on Climate-Related Financial Disclosures (TCFD), the Securities and Exchange Commission (SEC), and the International Sustainability Standards Board (ISSB), are forcing companies to track and report a clear view of their sustainability practices and take action to work toward net zero.
Keeping up with the various requirements and frameworks is a task in and of itself, necessitating you to assign resources to keep tabs on developments and enable compliance.
Reliance on nature
Nature and business are indelibly entwined. In fact, 55% of global GDP is moderately or highly dependent on nature, according to PwC research. That’s equal to $58 trillion.
That reliance takes the form of everything from the way trees purify the air to how fertile soil gives life to crops. But natural disasters threaten these resources—wildfires, floods, and droughts, for example, can take out forests and leave fields desolate. These disruptions to ecosystems also have the potential to dry up resources that businesses rely on to produce goods, ultimately eroding their bottom line.
To account for climate factors while making business decisions, company leadership first needs to understand just how exposed their companies are to the effects of climate change—and grasp the opportunity that decarbonisation presents. In fact, the way a CEO perceives climate risk exposure is in direct relation to their likelihood to take action. CEOs who consider themselves extremely exposed to climate risk are the most likely to take action, and those who consider themselves minimally exposed are the least, according to recent PwC findings.
That makes it all the more crucial for companies to go through a rigorous process to accurately represent the threats that climate change presents.
Targeted, tailored solutions for sustainable outcomes
- Maturity and baselining
- Strategy development
- Transformation roadmap
- Implementation and transformation
- Sustainability—data and reporting
Maturity and baselining
Before they can create a strategy and start taking action, businesses need a clear view of their existing climate maturity in relation to the goals of their stakeholders. The gap between these two factors represents both a threat to business viability and an opportunity to create real value.
PwC combines a wealth of experience on reporting methodologies and leading practices with deep technical expertise in climate issues. That combination enables a thorough assessment of your specific business risks and exposure.
Strategy development
Organisations face the challenge of quickly evolving and decarbonising, but they must balance the need for pace as they simultaneously work to maintain competitive advantage. PwC can help you creatively approach sustainability with a strategy that unlocks investment while accounting for both risk and reward—and without sacrificing speed.
During the strategy development phase, PwC helps you to recast your climate risks as opportunity. Businesses lay out a path towards enterprise value that includes not only mitigating risk but adapting for a future that will be impacted by climate change. The end goal is to build a business that is more resilient to the evolving ecosystem.
Transformation roadmap
Once leadership has aligned on a strategy, it’s time to create a roadmap to transformation. Here, it’s crucial that businesses establish clear governance procedures and put in place a sound data infrastructure. PwC leverages its experience in this arena to help organisations operationalise strategies to help establish that governance requirements don't get lost in the shuffle. A sound roadmap to transformation should enable a seamless transition into action, laying groundwork that aligns teams toward a common goal.
Implementation and transformation
CEOs are falling victim to an “action gap.” Whereas 75% of investors say reducing emissions is effective, just 65% of CEOs say they’re taking action to do so. PwC is working to close that action gap not only by helping companies align their goals with their specific climate risk, but by helping them implement initiatives that will enable greater long-term resilience.
That may include everything from net zero efforts that decarbonise daily operations to full-scale business transformation that targets business model adaptation. PwC’s value is enhanced by our comprehensive approach, which aims to connect the dots across propositions and deliver multiple elements of an integrated transformation program.
Sustainability—data and reporting
If they’re appropriately mapped and implemented, sustainability initiatives should produce mounds of data to be analysed and reported. Here, multiple stakeholders are in the mix. Organisations should be reporting in compliance with the spectrum of evolving regulatory frameworks, including the CSRD, TCFD, SEC and ISSB. PwC can help with reporting requirements and meeting deadlines.
But organisations should also be examining data with an eye for producing further value. Business leaders need reliable and comprehensive metrics to understand how various initiatives are working and to optimise and iterate on those initiatives.
Our work with clients
PwC has helped some of the largest organisations across the globe assess their climate risk and build more resilient businesses.
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Global Sustainability Risk, Resilience and Adaptation Leader
Tel: +49 (0) 69 95855555
