We enhance a client’s climate due diligence preparedness

Tahoma Environmental Menu of Services

The Climate Situation for Organizations

Every organization should consider the ongoing impacts and potential risks and opportunities that a changing climate may have on its assets and operations over time. Increasingly, institutional investors and insurers are also requiring firms to incorporate climate in their risk management positions. Responses to climate that are available to any organization generally come in two forms.

Mitigation

Mitigation actions are initiatives, usually with a local benefit, that contribute globally by reducing factors that contribute to the climate problem such as carbon emissions.

Adaptation

Adaptation actions aim to manage the impacts, risks and opportunities confronting an organization due to climate. Common terms for both types of action include resilience and sustainability.

Scientific data and management tools are now available to identify and assess climate risks for specific assets, locations and resources that are critical to an organization. This may include customers and supply chain networks. Climate should be managed as part of existing due diligence and decision-making processes with long term objectives in mind.

Tahoma Environmental is a Climate Management Consultancy able to help tailor and guide an effective response to impacts that may already be occurring, as well as assess emerging risks and potential opportunities due to climate. While we focus on impact planning and response leading to adaptation measures, our process and the information we can compile readily extends to mitigation strategies.

Support can be provided in several ways with deliverables based on the needs of the organization.

Support a Client’s Quick Self-Assessment – a quick call may flag issues needing attention

A brief introductory meeting may be enough to flag concerns that need further attention or, perhaps, lead to a tentative conclusion that an organization has little to no current reason for concern. Potential impacts, risks and opportunities will be considered relative to the location of significant assets, operations, and customer and supply chain networks.

Perform a Climate Stress Test – a top-to-bottom review may involve the whole organization

A deeper assessment may include evaluating an organization’s existing due diligence program and policies and procedures against applicable criteria. Selected criteria are those that may contribute to business resilience and continuity in key areas:

performance and lifecycles of physical and intangible assets
sustainability of public infrastructure on which the organization relies
productivity and continuity of employees
resilience of key customer and supply chain networks
reputational effects relative to external stakeholders

Each factor may need to be considered over a different time horizon to fully scope the vulnerability or benefit they represent to the organization.

Prepare a Climate Management Plan – embed the authority in a plan to act on climate

A comprehensive plan of action will demonstrate an organization’s intent and lead to success for all stakeholders. A plan may support a global cause or a more competitive position in a particular industry or region. A Climate Management Plan may include:

statements of strategic climate objectives and incremental goals for achieving them
command media documents and progress metrics adopted by the organization
an inventory and prioritization of assets and liabilities to manage for climate issues
an outline of objectives and the plans to manage them with exposure timelines
the strategy for merging the cost of climate-driven actions in routine budget processes
incorporating climate forecasts in plans for financing operations and capital projects
messaging climate objectives and initiatives as part of stakeholder outreach

A Climate Management Plan provides the foundation for an organization’s response to climate concerns and the basis for measuring progress towards objectives over time. Metrics to track plan implementation and results over time are a measure of accountability for the organization

Update due diligence decision processes – “sustainability is a goal, not an organization”

An evaluation of climate impacts, risks and opportunities will ideally be part of an ongoing executive management decision process. This approach will serve to integrate climate as one of many factors as a whole for the organization. Example factors will:

capture the science and data underlying the why, where and how of each concern
identify anecdotal conditions and experiences of others that may serve as analogs
outline exposures relative to significant balance sheet assets and liabilities
ensure confidence in capital budget forecasts and operation and maintenance plans
support the reliability of reports when soliciting financing and insurance

The results of this analysis provide a record of the organization’s climate strategy and objectives over time. The analysis typically will build on the repeat use of various assessment tools, for example, public access models that project sea level rise on local topography or changes in regional weather patterns and other climate influences. An organization’s climate response may also beneficially align with the global Environmental, Social and Governance (ESG) framework established by the Task Force on Climate-Related Financial Disclosure (TCFD). Financial institutions and others are increasingly using the TCFD standard as a baseline for many industries to assess an organization’s commitment to incorporating climate risk accounting through comparative assertions.

Summary

Tahoma Environmental is a Climate Management Consultant able to advise and assist any level of organization define objectives and manage exposures to climate change. The best results may follow a collaborative process that involves several functional groups in the organization and a variety of external stakeholders, such as customers, suppliers and the public. The sharing of best practices within the organization and perhaps with others external to it will provide the best opportunity to mitigate and adapt to the challenges of climate change.