Case Study: Climate scenario analysis for a global agrochemical company

Situation

Climate change has the potential to impact the company’s business across the value chain. For an international company, it is important to analyse the risks and opportunities for different segments, in different locations and under different climate change scenarios to identify business-critical risks and opportunities.

• Well-known climate scenario providers like IEA cover agriculture only to limited degree
• Two business lines belonging to different industries need to be analysed

Our Approach

• Selection of suitable scenarios to model possible transitory and physical risks
• Carrying out a materiality analysis: prioritising risks based on the company's own data
• Creation of a heat map for each business line: Analysis of all components of the value chain as well as identification of risks for all sectors and sub-sectors based on the TCFD sectors
• Assessing the financial impacts of climate change by quantifying climate-related risks and opportunities. For this purpose, the worldwide locations are examined for their vulnerability to transitory and physical risks, among other things by identifying geographically particularly exposed regions and existing energy intensities
• Formulation of strategic implications and recommendations

Project result

• First climate scenario analysis
• Client understands distinctive characteristics and implication of different climate scenarios
• Holistic overview of vulnerability hot spots
• Deliverables fit into TCFD recommendations
• Climate resilience test
• Strategic implications of climate risk & opportunities
• Smooth integration of insights and rationale into strategy and operations