Deloitte identifies and assesses climate-related risks and opportunities across operations, assets, portfolios, and the value chain. Deloitte analyses a wide range of climate related risks and opportunities which are prioritised and quantitatively assessed against a clear definition of financial materiality on the short-, medium- and long-term. Deloitte leverages high-resolution climate data (up to 10 km resolution) to gain deep insights into physical risks. The assessment results in a risk inventory of material climate related risks and opportunities that are specific for the organisation. 

Deloitte assesses climate risk impacts under different climate scenarios, including net-zero (SSP1-1.9, SSP1-2.6) and high-emission pathways (SSP5-8.5) and time horizons. Deloitte develops, interprets and selects climate relevant scenarios based on for example an organisation’s strategy, business model and portfolio. Deloitte identifies key vulnerabilities and adapts the scenario design accordingly. Scenarios include assumptions on greenhouse gas concentrations, socioeconomic context, technological evolution, climate policies, consumer
preferences, and climate impacts.

Deloitte uses advanced data-driven modelling to assess and stress test climate risks, quantifying their financial impact on key business and risk metrics such as EBITDA, net profit, credit ratings and probability of default. Deloitte follows high-level the following steps for the development of climate models:

1. Determining scope
2. Risk identification and
   materiality assessment – define, identify and assess climate change related risks and vulnerabilities
3. Define risk drivers – define potential climate related risk drivers and gather relevant data
4. Integrate in models – develop and calibrate models that incorporate the impact of climate risk on the risk drivers
5. Report and monitor – report on and monitor relevant climate risks

Deloitte develops data governance structures, define data requirements, onboard and interpret climate risk data elements on the right level of granularity. Through our extensive experience, we are well positioned to overcome challenges in obtaining climate related data (e.g. Scope 1, 2 and 3 emissions, geolocations) at the right level of granularity. Deloitte supports organisations in aligning the sustainability and climate data needs to data sets that are available in the market and alternative tactical as well as strategical data sourcing approaches. Deloitte has extensive experience with creating and implementing practical data acquisition, sourcing and integration strategies. Deloitte can benchmark your approach to your peer groups across the globe.

Deloitte develops and implements targeted climate risk adaptation and mitigation strategies to protect assets, enhance operational and financial resilience, and align with regulatory and investor expectations. Deloitte also supports the assessment of the impact of climate risk adaptation and mitigation on business performance—both qualitatively and in monetary terms—helping to demonstrate the effectiveness of implemented actions to management.

Deloitte embeds climate risk analysis into business
strategy, enterprise risk management, and decision-making, to drive proactive risk management and support senior leadership in strategic planning. Deloitte also trains and upskills employees and (supervisory) board members on the topic of climate related risks. In addition, Deloitte embeds climate related risks in the governance and integrates material climate related risks in risk appetite frameworks by developing key performance indicators, key risk indicators and setting appropriate limits.