At TriFinance, we recently supported a client in conducting a climate risk assessment. High-impact projects like this demonstrate that risk management must be enriched with subject matter expertise to be effective and truly address complex challenges.
Cross-functional collaboration for a climate risk assessment
The client initially approached our ESG team for guidance on various environmental, social, and governance topics. As discussions progressed, it became clear that a specialized climate risk assessment was needed.
Recognizing the importance of this task, the ESG team called on the expertise of the TriFinance Risk team, known for their experience in risk assessments across industries. To deliver a tailored climate risk analysis, the two teams combined their respective expertise — illustrating the value of cross-functional collaboration in addressing complex risk-related challenges.
A Structured Approach
Leveraging the Risk team's methodology, we are currently undertaking a comprehensive climate risk assessment. The process involves several key steps:
- Risk Identification: The ESG team brings expertise in sustainability topics and regulations such as the Corporate Sustainability Reporting Directive (CSRD). They are responsible for developing a tailored risk universe. This includes identifying all climate risks relevant to the client's activities.
- Risk Assessment (Mapping): We will organize an enterprise risk assessment session, using our interactive Enterprise Risk Assessment (ERA) tool. During this session, participants assess the identified climate risks based on likelihood, impact, and perceived internal control levels. The results will be visualized in a heatmap, facilitating immediate adjustments and discussions.
- Risk Mitigation & Reporting: Action plans are being developed to address key risks, with designated action owners responsible for implementation. Our Risk experts work closely with these owners to set realistic timelines and ensure effective controls.
- Review & Continuous Improvement: The enterprise risk assessment will be performed on an annual basis, incorporating emerging risks and comparing results with previous assessments. This ongoing review ensures the client's risk management remains robust and adaptive.
Service-driven organizations stand to benefit significantly from such collaboration. When experts from different domains align, it leads to deeper insights, more robust risk management, and sustainable, long-term solutions.
Key takeaways from the collaboration
Breaking down silos and promoting knowledge sharing across teams is essential for tackling complex challenges. The collaboration between the Risk and ESG teams highlights the value of combining different areas of expertise. By aligning regulatory insight with risk assessment capabilities, we were able to take a more integrated and forward-looking approach.
Enhanced Expertise: Combining the ESG team’s knowledge of regulations such as the CSRD with the Risk team’s skills in risk assessment, ensures a more complete approach to climate risk.
Holistic Risk Identification: The ESG team’s understanding of environmental, social, and governance topics helps identify all relevant risks, ensuring no critical issues are overlooked.
Effective Use of Tools: Utilizing the ERA tool for risk assessment sessions facilitates efficient and interactive risk rating, visualization, and discussion, leading to more accurate and actionable insights.
Client-Centric Approach: By bringing together diverse areas of expertise, the collaboration generates deeper insights and more sustainable solutions. This reinforces our commitment to delivering lasting value and exceeding client expectations.
Ongoing Execution
The climate risk assessment is currently underway. Once finalized, we will share the key findings and outcomes. This project highlights the added value of cross-functional collaboration in addressing complex challenges and achieving impactful results.
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