No Match Found
NGFS scenarios and stress testing considerations in Climate Excellence
PwC's “Climate Excellence” tool for climate scenario analyses supports investors and companies in making their portfolios fit for the risks and opportunities of climate change. This enables them to realize increases in value, adequately manage risks, and set up a long-term sustainability strategy and compliant reporting.
Global warming expected by 2030 according to the latest IPCC Climate Change Special Report.
longer drought duration with a warming of 3°C in Germany according to a project of the Helmholtz Center for Environmental Research.
globally more heavy rain events with a warming of 2°C.
Climate change is becoming more drastic and the critical global warming mark of 1.5°C will already be reached by 2030, according to the Intergovernmental Panel on Climate Change. Global warming is leading to increasingly frequent and severe weather extremes.Climate change and climate protection are having an ever greater impact on economic developments. They also entail major financial risks: From power plants that do not come on stream, to the electrification of individual transport, to the increasing energy requirements for buildings.
The pressure to act on the part of politicians is increasing. The EU is supposed to be climate-neutral by 2050. A joint effort that requires a radical turnaround – also for companies.
Regulators such as the European Central Bank (ECB) or the German Federal Financial Supervisory Authority (BaFin), as well as regulators, emphasise the importance of this goal, for example in the ECB consultation paper on climate risks and the guideline for non-financial reporting. The extended reporting within the framework of the Corporate Sustainability Reporting Directive (CSRD) and the EU taxonomy are already shaping the requirements for risk management and the strategy of financial institutions and the real economy. And numerous other regulations are expected in the future as well.
cost hit for the impact of the climate crisis for the world's 215 largest companies.
worth of fixed assets at risk by 2100.
investment per year.
In this video series, we give you an overview of current ESG regulations and the key aspects of materiality analysis, as well as the ECB stress test.
The TCFD predicts that climate change could put $43 trillion worth of fixed assets at risk by the end of the century. According to a CDP study, the world's 215 largest companies put the impact of climate risks on their businesses at nearly US$1 trillion – many of which are likely to come due within the next three years. This is due to dynamic market conditions, physical impacts and increasing regulation. To meet climate and energy targets by 2030, the EU Commission expects an annual investment of up to €260 billion per year.
How can companies maintain their "license to operate" and prove themselves in rapidly changing markets? The EU Action Plan, the Network for Greening the Financial System and other stakeholders are increasing the pressure to integrate climate-related risks and opportunities. Society, politicians, suppliers, investors and customers are increasingly demanding more transparency and action.
“Climate change is changing the way we know how to do business. In the future, every company will have to consider the risks and opportunities from these changes in its strategy.”
Many questions arise with regard to climate change and possible impacts:
The PwC Climate Excellence tool helps you answer these questions quickly and reliably. The tool's scenario analyses give you maximum transparency on your portfolios by analysing and visualising financial impacts of climate change.
Climate change-related opportunities and risks are calculated on the basis of various climate scenarios and energy system models. Transitory risks, such as changing prices, demand, technological advances or regulation, as well as physical risks are taken into account. We analyse seven natural hazards that are particularly relevant for the analysis of physical climate risks: Heat waves, floods, thunderstorms, tropical cyclones, wildfires, droughts and sea-level rise.
Climate Excellence is already equally suitable for both the financial and the real economy. The aim of the tool is to cover all industries and sectors in detail. For this reason, PwC will regularly publish new modules in a rapid release rhythm. You will always find news about the releases on this website and on our social media channels.
“In the future, every company will have to consider the risks and opportunities of climate change in its strategy. Risk identification and assessment is the first important step.”