Climate Change Risk Assessment Framework

Harri Spolander, FortumJanne Peljo, Sitra

19.9.2016

• The scope of the climate change risk assessment is to support the business risk analysis in terms of climate change risks among the other megatrends by integrating the assessment to company’s existing risk processes

• This is a framework to support adaptation to climate change risks and impacts, not to manage the climate change itself

Climate Change Risk Assessment Process Framework Overview

Climate change

Population growth

Urbanization

Resource scarcity

Other megatrends

MegatrendsClimate Change Risk

Assessment FrameworkCompany’s existing

risk processes

Risk analysis in strategic planning

Risk analysis in business planning

Investment risk analysis

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More holistic and comprehensive assessment of the risk landscape

Climate Change Risk Assessment Process Process Background

The idea is of the check-list is to ingrate the climate change risk assessment to company’s existing risk processes to support adaptation to climate change risks and impacts.

The objective is to concentrate the analysis to the aspects that can be impacted by the Corporates and supports the adaptation to the negative impacts and business continuity.

The risk analysis works as a check-list of the climate change impacts in the respective country. All critical items are lifted and integrated to the overall risk analysis and risk maps presented for the business plan or the project.

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Climate Change Risk Management Framework Assessment Process

• Helps to identify and analyze climate related risks (negative and also positive) in different countries and regions

• The risk analysis works as a check-list of the climate change impacts in the respective country. Facilitates documentations of Company specific implications Materiality before actions Actions Criticality after actions (Red-Yellow-Green)

• The guidance is that all critical items are lifted and integrated to the overall risk analysis and risk maps presented for the business plan or the project

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Tool Inputs

• Basic inputs for data generation: Region Oceanic region Business sector Dependence on coastal and marine

infrastructure

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Tool Outputs – Overall Climate Risk Summary

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Tool Outputs – Example Impacts for the Selected Sector

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Tool Outputs –Climate Impact Data 3

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Tool Outputs - Summary

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Conclusions and Next Steps

Tool is available in Sitra Website: http://www.sitra.fi/uutiset/hiilineutraali-teollisuus/ilmastoriskien-tunnistaminen-ja-hallinta-tarkea-osa-yritysten

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The tool because of its general characterics fits best for strategy-level discussions. Indirect, like socioeconomic impacts need to be analysedseparately

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Piloting and testing the tool at Fortum as a part of strategy processes; Risk Management and Sustainability involved

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Discussions ongoing with dedicated climate risk advisors to find recommended sources of more detailed analysis, facilitation and process development

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Discussions ongoing with MetOffice for tailored reports for certain locations as per customer requests.

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