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Edoardo Imbornone

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ESG risk analysis

Business risk management is like an umbrella: it seems useless until it starts to rain.

Climate change is not just about rising temperatures. It affects the operational continuity, costs, supply chains and reputation of every business, and it needs to be addressed before it becomes an emergency. Nobody has a crystal ball, but questioning possible scenarios methodically is a worthwhile exercise, one that lets you decide today how to adapt to the world of tomorrow.

To carry it out, I apply the most robust reference methodologies, including, for example, the double materiality approach of the European Sustainability Reporting Standards (ESRS) and the IFRS S2 criteria, with international climate scenarios, for climate risks. Alongside the traditional ESG parameters, I integrate the analysis of impacts, risks and opportunities (IROs) related to cybersecurity (NIS2 Directive) and artificial intelligence (the EU AI Act and the ISO/IEC 42001 standard).

What you get

Alongside these tools I use a bespoke methodology, built around the characteristics of each business. Every risk is measured on three axes, namely likelihood, impact and the strength of the controls already in place, in order to obtain a level of residual exposure.

The result is an analysis and mapping report, designed for the company’s senior management and Board of Directors, showing where to act first and with which measures.

Services in detail

FAQ

What is an ESG risk analysis?

It is the mapping of the environmental, social and governance risks that can affect a company’s operational continuity, costs, supply chains and reputation. Each risk is measured on likelihood, impact and the strength of the controls already in place, in order to obtain a level of residual exposure.

Is it useful for a business with no reporting obligations?

Yes. Banks and larger customers increasingly ask suppliers and borrowers for ESG information, even when the business is not legally required to report. The analysis helps you answer questionnaires and set priorities.

What is the difference between physical risk and transition risk?

Physical risk arises from the effects of climate on business activities, for example floods, heatwaves or coastal erosion. Transition risk arises from changes in regulation, markets and technology linked to the shift to a low-emission economy.

How do you measure a risk that, in practical terms, does not exist yet?

Think about it: over the last eight years, would you ever have imagined such deep and far-reaching changes? And, above all, could you have predicted them?

Right, follow me.

Risk analysis is not about predicting the unpredictable. It is about testing your ability to respond to change.

Through complex scenarios and possible future developments, you test today how the organisation would react when, tomorrow, an unexpected event occurs and whoever has to decide has little time to do so.

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