Image of a road alongside a coastline


Examining climate risk over varying time horizons

clock 5 minute read

The TCFD recommends that organizations identify, assess and manage climate-related risks and opportunities within the context of an organizationwide risk management framework. That includes looking at risk from varying time horizons, such as the short, medium and long terms.

Smooth scroll
Image of a city behind a desert

Delineating time horizons

As part of examining climate risk over several time horizons, the TCFD recommends that investors also describe:

  • What their organization considers to be its short-, medium- and long-term time horizon, taking into consideration the useful life of the organization’s assets or infrastructure and the fact that climate-related issues often manifest themselves over the medium and longer terms.
  • The specific climate-related issues for each time horizon (short, medium and long term) that could have a material financial impact on the organization.
  • The process (or processes) the organization uses to determine which risks and opportunities could have a material financial impact on the organization, as well as risks and opportunities by sector and or geography.
Image of engineers fixing solar panels

Assessing the materiality of risks

The TCFD recommends that organizations assess the materiality of climate-related risks, the potential for climate-related disruption to supply chains, as well as incentives for the organization and its employees to take climate-related factors into consideration in such areas as the use of energy-efficient materials, transportation and the selection of office space.

Want to receive the latest net-zero insights?

Sign up here