Quantitative assessment of the financial materiality of climate physical risks: a case study

Lucia Alessi and Andrea Giacomelli ()
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Andrea Giacomelli: Ca Foscari University of Venice, https://www.unive.it/

No 2024-05, JRC Working Papers in Economics and Finance from Joint Research Centre, European Commission

Abstract: We offer an applied approach to the double materiality assessment of environmental, social and governance (ESG) matters, which could serve as practical guidance to the 60K companies required by EU regulation (CSRD) to carry out this assessment. Focussing on the financial materiality of climate physical risks, due to its regulatory priority, we provide numerical examples, developed in compliance with all relevant regulatory requirements (ESRS). These examples are based on a generalised methodology, which allows to perform both impact and financial materiality assessments on any sustainability matter, adopting the most suitable sources of information: publicly available scientific data to perform fully transparent ESG risk estimates and expert judgment (of firm managers and/or advisors) to consider the significant idiosyncratic features characterising the financial effects of ESG matters.

Keywords: Sustainability reporting standards; double materiality assessment; ESG sustainability report; environmental sustainability; ESG risk management; climate physical risk; idiosyncratic forward-looking information (search for similar items in EconPapers)
JEL-codes: D81 G32 K32 Q51 Q54 Q56 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2024-11
New Economics Papers: this item is included in nep-env
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