Insights
19 May 2022

How EarthScan can help improve your ESG and climate risk reporting

Cervest

By Cervest

How EarthScan can help improve your ESG and climate risk reporting

The pressure is on for businesses to report on climate risk. EarthScan™ helps you quickly identify, analyze and report on the physical risks to your assets and portfolios

Climate-related financial disclosure is now mandatory for 1,300 of the UK’s largest companies and financial institutions. By 2025, climate risk reporting will be mandatory across most UK businesses, and the SEC has signaled that the U.S. will soon follow suit with similar regulations. These moves are part of the global shift toward mandatory climate-related financial disclosure, fueled by the need to quantify growing financial losses caused by climate volatility.

While some companies are already compiling either internal or public ESG reports, most face the task of building their climate-related reporting capability from the ground up. While there is guidance provided by frameworks, such as those from the Task Force on Climate-related Financial Disclosures (TCFD), accurate and relevant climate-related financial reporting is no easy task. Organizations that establish their reporting processes now will be best placed to build asset resilience, protect finances, and comply with current and future reporting requirements.

In this guide, find out how EarthScan can help you generate on-demand, asset-level insights on your physical climate risk, to support your current and future reporting needs.

Who this guide is for

Whether you’re new to physical climate-related risk reporting or looking to upgrade your existing reports with science-backed insights, EarthScan can help:

  • Heads of ESG and Sustainability looking to report on physical climate risk across multiple regions and departments against fast-changing ESG targets

  • Risk Managers preparing and aggregating physical climate risk reports across their organization

  • Consultants looking to meet increasing client demand for TCFD-aligned reports with science-backed insights and a repeatable methodology

Comprehensive climate-risk reporting requires asset-level insight

Physical climate-related risks will impact every built asset everywhere. Extreme wind and heavy rainfall can damage high-rise buildings, and heatwaves can cause power outages and cause the closure of essential parts of the supply chain, such as manufacturing plants.

To accurately understand and then report on climate risk, it is essential to consider risk at the asset level. However as found by a survey by Cervest, businesses face a number of challenges in doing so, including:

  • A lack of real-time and actionable intelligence (43%)

  • Insufficient understanding of what the data means (38%)

  • The complexity of aggregating data (46%)

EarthScan helps managers responsible for reporting risk to overcome the complexity of asset-level reporting by providing an on-demand view of climate risk, at both a portfolio and individual asset level. The insights are powered by world-leading science and modeling capabilities and are easily understandable and completely shareable. You can download the insights as images, to easily include in internal and external reports, and the entire report can be downloaded as a fully editable .docx file allowing additional information to be added.

Quickly assess your asset-level physical climate risk

EarthScan takes the complexity out of quantifying asset-level climate risk. It gives you an unprecedented view of historical, current and predictive climate risk on your physical assets – including factories, office buildings and hotels. Using this on-demand Climate Intelligence, you can easily baseline, segment and quantify risk across your entire portfolio in minutes.

Once the asset or assets are selected, either from Cervest’s catalog of nearly 225 million built assets across the globe, or uploaded from a .CSV file, they are given a rating of ‘very low’ to ‘very high’ for a number of climate hazards, including heat stress, precipitation, extreme wind, flooding and drought. Users can then see how these ratings will change over the short, medium and long term, from 1970 to 2100, and under three different climate emissions scenarios:

  • Business As Usual

  • Emissions Peak in 2040

  • Paris-Aligned

Figure 1 – EarthScan map view and insights

Get customized, report-ready analysis and insights

EarthScan allows users to discover three levels of insight about an organization’s climate risk: a summary view of asset-level risk, an at-a-glance view of physical exposure risk, and a segmented view of risk by geography and hazard. All three must be considered to get a complete view of risk. Each has elements that can be used to support both internal and external climate risk reporting.

1. A summary view of your asset-level climate risk

Figure 2 – Automatically generated Executive summary

The Executive Summary provides a view of your physical climate risk under the Business as Usual Climate Scenario, between 1970-2100. This view has been designed to meet the requirements of ‘Recommendations A’ of the TCFD Strategy pillar.

How does EarthScan help with compliance with TCFD recommendations?
  • Analyzing acute and chronic risk: EarthScan covers acute physical risks that are event-driven, such as floods, as well as chronic risks like sea level rise.

  • Working within defined time horizons: By revealing an asset’s physical climate risk up to 2100, the entire lifespan of an asset can be considered, including the climate risks that are likely to manifest in the long term.

  • Focusing on the Materiality threshold: The Executive Summary only includes assets with a rating of ‘medium risk’ or higher, which is deemed above the Materiality threshold.

  • Quantifying physical risk: EarthScan provides a variety of quantified, asset-level risk metrics for each climate hazard at various time periods e.g. flood inundation depth and the number of heatwave days.

2. At-a-glance map view of physical exposure risk

Figure 4 – See the number of assets at material risk by geography and hazard

To share deeper insight into the material risks facing an asset or portfolio, this matrix segments and rates the exposure to particular hazards in each country sub-region. This view can be used to prioritize adaptive measures for specific hazards, or share with asset managers to strengthen their Risk Mitigation and Adaptation strategies.

Climate risk literacy made simple with EarthScan’s support

To ensure that climate risk insights and reports are clearly understood by all stakeholders, EarthScan includes a number of in-product tips to explain key terms, plus a library of articles explaining all aspects of the platform, ratings and disclosure requirements.

Figure 5 – Consult a glossary of key terms

Discover more about how EarthScan supports your climate risk reporting

EarthScan combines asset-level Climate Intelligence with report-ready insights, to help you confidently discover, analyze and report on climate risk. Join other world-leading organizations on the EarthScan Starter Program. Sign up here.

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