Climate risk you can disclose, defend and act on
Most institutions come to climate risk through disclosure: ISSB S2, ESRS E1, TCFD-aligned reporting and supervisory expectations. We deliver disclosure-ready scenario analysis first, then help institutions go further, so the same analysis informs pricing, capital and portfolio decisions.
Disclosure is the starting point, not the finish line
Scenario analysis, physical and transition risk metrics and climate-related financial effects now have to be disclosed and defended to auditors and supervisors. Institutions that build that analysis well once can reuse it for risk appetite, ICAAP/ORSA, pricing and origination. Those that build it only for the report end up doing it twice.
A sequence, not a checklist
Supervisory expectations tell you what must exist; the Decision Ladder tells you which capability must exist before the next is credible. Hazard and transition data come from public sources such as NGFS, Copernicus and WRI Aqueduct, or from providers you already license, and financial translation is co-built with your model owners rather than replacing them.
Engagement formats
Ladder Diagnostic
3–4 weeks. Gap review against FINMA 2026/1 or EBA expectations, data inventory and a sequenced 12-month roadmap. The entry point for institutions before R2.
Disclosure-ready Climate Risk Assessment
Scenario analysis and physical and transition risk metrics for ISSB S2, ESRS E1 or TCFD-aligned reporting, documented so the same analysis can be reused in risk management.
R2→R3 Bridge Sprint
8–10 weeks. Financial translation designed and run on two material segments with your risk team, with scenario-adjusted PD/LGD or pricing deltas and a validation pack.
Integration Review
6–8 weeks. Risk appetite, ICAAP/ORSA and model-governance design for climate, ahead of the next supervisory review.
Outcomes clients can point to
- Disclosures your auditor and supervisor can follow, from scenario to figure
- One analytical foundation reused across disclosure, risk and strategy
- Risk teams trained to run and evolve the capability
- A clear path from reporting to pricing, limits and portfolio decisions
How we approach climate risk
The Climate Risk Decision Ladder
Supervisors no longer ask whether you analyse climate risk; they ask whether it is integrated into risk management and decisions. The Decision Ladder sequences what FINMA Circular 2026/1, the EBA ESG risk guidelines and the ECB guide imply into five rungs, each of which depends on the one below.
- R1Exposure
Physical hazard exposure mapped at asset or counterparty location; transition exposure segmented by sector and technology; concentrations reported to the risk committee.
- R2Vulnerability
Counterparty sensitivity assessed, not only gross exposure; at least two coherent NGFS scenarios applied, with horizons matched to asset and liability tenors.
- R3Valuation
Climate factors feed quantified adjustments to PD/LGD, technical pricing or valuations for material segments, with the method documented and the delta reconciled to baseline.
- R4Integration
Quantitative climate metrics in risk appetite; climate in ICAAP or ORSA through a repeatable process; model governance; disclosure and internal reporting from the same analysis.
- R5Steering
Documented cases where climate analysis changed an origination, underwriting or investment decision; portfolio strategy uses climate signals on a defined cadence.
The hardest step is R2 to R3: from scenario narratives to financial numbers. It only sticks when it is co-built with the team that owns the credit or pricing models.
Test our framework on your own institution
Climate Risk Decision Ladder self-assessment
This expertise in our sector practices
Sustainable Banking
Credit, capital and client strategy for banks managing climate and nature risk while financing the transition.
Explore the practiceSustainable Insurance
Underwriting, investing and product design for an insurance industry on the front line of climate and nature loss.
Explore the practiceSustainable Investment
Portfolio strategy, products and stewardship for asset managers and asset owners.
Explore the practicePreparing your next climate disclosure?
A 30-minute conversation is usually enough to scope a disclosure-ready assessment, and to see what else the same analysis could do for you.