As climate change intensifies, businesses are facing growing pressure to understand how it could disrupt their operations, supply chains, and long-term plans. A climate change risk assessment has become an essential tool for ensuring compliance and helping organisations stay resilient in a changing landscape. Climate change risk assessments allow organisations to focus on the broader picture by determining vulnerabilities, clarifying risks, and keeping organisations adaptive.
The ISO 14091:2021 standard gives clear instructions on completing a successful climate change risk assessment. This climate risk management framework helps organisations turn the oftentimes complicated challenge of climate change into clear, actionable steps. It helps organisations pinpoint vulnerabilities, understanding how different climate threats could affect business as usual, and build those insights into their long-term plan. Using this Climate risk management framework will help you follow best practices and make sure your risk assessements are consistent, based on facts, and forward looking.
The following steps are inline with the ISO 14091:2021 guidelines.
Table of contents
Click on a specific section below to easily navigate to that area:
Step 1: Prepare your climate change risk assessment
Step 2: Implement a climate change risk assessment
Step 3: Report and communicate your results
Step 1: Prepare your climate change risk assessment
The first step in any climate risk assessment is getting organised. Take this opportunity to figure out why you’re doing it, what you need, and how to approach the assessment in a way that makes sense for your organisation. Set a clear direction for the assessment so the process runs smoothly and provides real value to you.
- Establish the context: Why are you doing the assessment, what do you hope to achieve, and who needs to be involved? By setting a clear context from the start, you’ll create a shared understanding that helps guide the process and ensures it stays aligned with your broader goals.
- Identify your objectives and expectations: What are you trying to achieve and what do you want to learn? This step shapes the direction of the assessment and guarantees everyone involved is working toward the same goal.
- Establish your project team: Whose knowledge, experience and perspective do you need to guide your process? Gathering the right people is key to a successful climate change risk assessment. Their insights and expertise help drive clear, confident, and well-informed decisions.
- Determine the scope and methodology: Where will you focus your attention during this assessment and how will it be carried out? Set clear boundaries, decide the right level of detail, and choose a method (or a combination of methods) that suits your organisation’s needs, resources, and objectives.
- Set the time horizon: When might climate impacts become serious for your organisation and how much time will you need to respond? Setting the right time horizon ensures a realistic and forward-looking climate change risk assessment. The TCFD and CSRD regulations recommend short, medium, and long term evaluation but it’s up to you to define what those periods mean in the context of your organisation.
- Gather relevant information: What information do you need to best understand your organisation’s climate impacts, vulnerabilities and exposure? This information will play a large role in shaping the accuracy of your assessment. Gather from a variety of credible sources including climate projections, operational data, and local knowledge where available.
- Prepare an implementation plan: How will you go about carrying out your climate change risk assessment? Make sure you and everyone else on your team is well versed on the steps you’ll need to complete the process successfully. Clearly define these steps and put a plan in place with timelines for the execution of each.
- Ensure transparency throughout: What steps are you taking to ensure you’re able to stand behind your findings? You must be accountable for your findings. Clear documentation of sources, methods, and assumptions helps others understand your process, and gives you confidence that your conclusions are solid, defensible, and ready to support action.
- Participatory approach: How and when will you be engaging stakeholders throughout your climate change risk assessment? Involving stakeholders is key to a well rounded and credible assessment, and this step is crucial across a variety of different climate-related frameworks, including the CSRD and TCFD. Involving diverse perspectives as soon as possible in the process is vital for capturing the most relevant insights. It will lead to better informed decisions that reflect the realities on the ground.
Step 2: Implement a climate change risk assessment
Now that you’ve completed the preparation for your climate change risk assessment, it’s time to put everything you’ve planned into practice.
- Screen impacts and develop impact chains: Do you understand how climate impacts could ripple through your organisation? Mapping out these connections is important, and this is where impact chains come in. They make complicated risks easier to understand by breaking them down into clear steps that show how one change could lead to another. This helps you determine where you’re most at risk and prioritise accordingly.
- Identify indicators: How will you find out what climate risks are most important to your business? Picking the right indicators makes your risk assessment truly useful. The indicators you pick should be based on metrics that you can sufficiently measure. The most important thing is to find a balance between accuracy and feasibility, especially when there isn’t much data or resources available.
- Acquire and manage your data: Do you have the right data to see both where you’ve been and where you’re going? Your climate change risk assessment should use data from the past to form predictions about your future climate standing. This information may come from a number of places such as:
- Expert opinions
- Measurements
- Surveys
- Census data
- Model-based scenarios.
The goal is to paint a picture that is based on facts and is forward-looking enough to help your organisation make smart, strategic decisions about their sustainability.
- Aggregate indicators and risk components: How do you bring all your risk data together to see the full picture? Combining indicators and risk components helps turn scattered data into meaningful insights. It involves combining different risk factors (such as hazard, exposure, and vulnerability), so you can see not only individual risks but also how they affect your whole organisation. The goal is to make a clear, useful picture of risk that helps everyone across your organisation make smart, strategic decisions.
- Assess adaptive capacity: How well is your organisation equipped to handle the impacts of climate change? Assessing adaptive capacity helps you understand how prepared you are to respond, recover, or even benefit from climate-related changes. This varies widely depending on financial and human resources, leadership, and tools already in place (i.e. emergency plans or continuity strategies). It’s also important to think about scale. What works on a national level might not work on a local level.
- Analyse cross-sectoral interdependencies: Have you thought about how climate risks in one area could affect other areas? To understand how cross-sector dependencies work, you need to know how the different systems in your organisation are linked. If something goes wrong in one area, it sets off a chain reaction that makes things worse in other areas. This step involves identifying these linkages and the potential consequences tied to them.
- Have your findings independently reviewed: How confident are you that your climate risk assessment stands up to scrutiny? An independent review is a crucial final step to ensure your assessment is credible, balanced, and free from internal bias. Bringing in an external perspective will validate your methods, challenge assumptions, and strengthen the overall quality of your findings.
Step 3: Report and communicate your results
How will you share what you’ve learned in a way that drives action? Reporting the results means clearly presenting your findings and thinking about how risks might be linked across sectors. It’s also about sharing those insights with stakeholders in a way that is clear, useful, and helps them make smart choices. Your reporting should align with regulatory frameworks like TCFD or CSRD, and serve as a foundation for future adaptation planning. When done right, it helps decision-makers figure out what to do, where to focus their attention, and how to be more resilient.
Climate risk software makes this process easier by organising your data, helping you follow the correct climate risk management framework and presenting complex risks in a way that’s accessible.
