Climate risk analysis and reporting
About the Client
Refinitiv is serving more than 40,000 institutions in approximately 190 countries. They provide information, insights and technology that drive innovation and performance in global financial markets.
The Challenges: TCFD disclosure of climate-related risks and opportunities
Refinitiv’s priority goal was to align their reporting with the recommendations of the Taskforce on Climate-Related Financial Disclosures (TCFD). As annual responders to the CDP – the leading voluntary framework for climate-related disclosures – Refinitiv was already considering many of the TCFD elements. To fully align with the TCFD, Refinitiv required disclosure against the 11 recommendations to be published in their public reporting, including an assessment of their strategy using climate scenario analysis.
The Solution: Climate scenario analysis and enhanced TCFD reporting
To meet Refinitiv’s enhanced TCFD reporting goal, Agendi led the process to conduct climate scenario analysis for their direct operations and strategy. The detailed assessment involved examining the impact of acute and chronic physical risks, as well as transition risks across the areas of policy and legal, technology, market, and reputation. Analysis time horizons were selected to reflect Refinitiv’s business planning and investment cycles and have the ability to represent a range of possible climate-related risks and opportunities.
To enable the mapping of physical hazard exposure for Refinitiv’s key sites, Agendi applied a high emissions scenario (Intergovernmental Panel on Climate Change IPCC RCP 8.5). Agendi used the precise geographic location of each site to capture the exposure to severe weather events, water stress, heat stress, sea-level rise, and flooding. Risk categories (low, medium, high, very-high) were assigned based on the level of disruption to operations and changes required to Refinitiv’s business strategy. The outputs of Agendi’s physical scenario analysis fed into Refinitiv’s enterprise risk management framework; assessing the resiliency of their business strategy, investment, and location strategy from a climate perspective.
Transition risks and opportunities were explored for Refinitiv’s operations and strategy by applying a lower than 2°C scenario (Internal Energy Agency IEA Sustainable Development Scenario). Carbon price modeling formed a key element of the analysis to estimate the direct financial impact on Refinitiv’s operations and the indirect financial impact on their purchased goods and services. The transition analysis results supported Refinitiv’s ambitious action on climate, placing emissions reduction and engagement targets based on science at the core of their strategy.
Agendi’s scenario analysis results enabled Refinitiv to feature an enhanced TCFD disclosure in their annual sustainability report. Refinitiv’s drive for transparency and commitment to sustainability progress builds resiliency in their strategy, ensures climate risks are managed and opportunities harnessed to their full potential.