In times of intense climate and environmental changes, it is crucial for companies and communities to identify, understand, and prepare for the risks arising from these changes. According to the definition, threats stem from two basic types of risks:

1. Physical Risk – This relates to the impact that extreme weather conditions (storms, floods, droughts, etc.) and gradual changes in climate patterns (temperature rise, increased aridity, changes in seasonal rainfall, etc.) have on the overall economy as well as a company’s financial operations. Environmental changes such as air, soil, or water pollution, biological degradation, deforestation, and others have a similar effect, especially on certain sectors of the economy like agriculture and tourism. This can directly lead to property damage or reduced productivity and indirectly result in supply chain disruptions, customer loss, and financial losses.

2. Transition Risk – This pertains to financial losses arising from the process of adaptation and alignment toward a low-carbon and environmentally sustainable economy. This risk can materialize due to the rapid enactment of environmental and climate laws, technological changes, as well as market and customer preferences.

The service of climate and environmental risk assessment represents a multidisciplinary approach to the analysis and evaluation of climate and environmental threats arising from a company’s activities. Additionally, it considers how climate change and environmental changes impact a company’s operations and financial results (double materiality).

The assessment and management of climate and environmental risks involve several steps:

1. Analysis of Climate Changes: Analyzing climate changes in the areas where the company operates.

2. Assessment of Exposure and Vulnerability: Evaluating the company’s exposure and vulnerability concerning climate and environmental changes.

3. Development of Adaptation Strategy: Creating a strategy for adaptation to mitigate risks and capitalize on opportunities.

4. Education and Consulting: Providing education and consulting services to help the company understand and navigate climate and environmental risks effectively.

5. Evaluation and Monitoring: Continuously assessing and monitoring the effectiveness of the strategies implemented and making adjustments as necessary.

By systematically addressing climate and environmental risks, companies can enhance their resilience, reduce potential financial losses, and contribute to a more sustainable future.