TCFD Climate Risk Analysis

Climate-related risks and opportunities

Progressive climate change presents companies with a variety of risks, but also opens up opportunities, for example for new business areas. The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) provide a clear framework for systematically analysing and assessing climate-related opportunities and risks based on the latest scientific findings.

A climate risk analysis offers various advantages:

Better understanding of climate-related risks and opportunities and integration into strategic planning
Identification of risk hotspots, for integration into existing risk management
Identification of new business opportunities, e.g. by expanding the range of climate-friendly products and services
Compliance with the requirements of Swiss legislation on non-financial reporting (Art. 964 CO / Ordinance on Reporting on Climate Matters)
Increased transparency and credibility vis-à-vis investors and other stakeholders

Climate risk analysis in accordance with TCFD guidelines

Transition risks and physical risks

In order to make well-founded decisions, it is crucial to know the different types of climate risks and to classify them correctly. The TCFD distinguishes between two central risk categories that can affect companies in different ways, both operationally and strategically:

Transition risks

Risks from the transition to a low-carbon economy:

Policies and regulations
Market environment
Reputation
Technological development

Transition risks arise from social and economic changes caused by decarbonization. Examples include CO₂ levies, changing consumer preferences, rising expectations of relevant stakeholder groups (e.g. investors, NGOs) or innovations that call existing business models into question.

Physical risks

Risks due to the physical effects of climate change:

Acute physical risks
Chronic physical risks

Physical risks relate to the direct effects of climate change on companies. These include damage caused by extreme weather events such as heatwaves, droughts or floods (acute risks) and long-term climatic changes such as rising temperatures or water shortages (chronic risks). They can have a significant impact on the availability of resources, supply chains or production sites.

The relevance of climate scenarios

The extent of the future impact of climate change depends crucially on how quickly global emissions are reduced. Different scenarios – such as a Paris-compatible path or the “business-as-usual” path – lead to very different, sometimes non-linear consequences for the environment, society and the economy. This entails different risks and opportunities for companies, for example through regulation, market changes or physical climate impacts.

According to the TCFD recommendations, companies should analyze climate risks along at least two climate scenarios (e.g. 1.5 °C and RCP 8.5) and three time horizons.

These perspectives help to realistically assess the impact of different climate paths and to develop targeted strategies for risk mitigation and adaptation.

Swiss legislation, TCFD and ISSB

The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) are officially recognized with the entry into force of the Ordinance on Climate-related Financial Disclosures in January 2024. Companies that report in accordance with the TCFD thus fulfill the current disclosure requirements on climate-related issues under Swiss law.

The TCFD has now handed over its work to the IFRS Foundation. The International Sustainability Standards Board (ISSB), which is also part of IFRS, is continuing the recommendations of the TCFD with the ISSB S2 standard. Accordingly, the Federal Department of Finance (FDF) submitted an amendment to the ordinance for consultation in December 2024: In future, there will no longer be an explicit reference to the TCFD, but rather to the international standards that continue its content – in particular ISSB and ESRS.

According to the FDF, this is a clarification of current practice, not an extension of the requirements. The consultation process is currently still underway; until it is completed, the existing requirements with TCFD apply as a reference framework.

How SuCo supports you

In line with the TCFD recommendations, we analyse climate-related financial risks and opportunities for your business using a clear, structured approach. We guide you step by step through the process and ensure that the results are technically sound, easy to understand and practical to implement.

Based on your business model and value chain, we identify relevant climate risks and opportunities in line with international standards such as the TCFD and the IPCC (Intergovernmental Panel on Climate Change). We then examine these against various climate scenarios and time horizons, assess potential financial impacts and derive concrete adaptation and mitigation measures.

We present the results in a clear and transparent manner and support you in integrating them into existing risk and sustainability processes. On request, we can also support the process with workshops, training sessions or a benchmarking exercise against selected competitors.

Our three-step approach

1. Identification of potentially relevant climate risks and opportunities
Working with you, we determine which time horizons and climate scenarios will be included in the analysis. We then identify relevant physical and transitional climate risks and opportunities along your value chain, based on your business model and recognised frameworks such as the TCFD. Upon request, we can compare your results with those of your key competitors.

2. Analysis and prioritisation of identified risks and opportunities
We assess the climate-related financial risks and opportunities identified for your company in accordance with TCFD guidelines. This assessment is based on the latest scientific findings, including those from the IPCC reports. For each climate scenario, we assess – qualitatively and, where possible, quantitatively – how likely a risk or opportunity is and what impact it could have on key financial indicators.

3. Development of measures, integration into risk management and reporting
For the key risks, we develop company-specific recommendations for concrete measures aimed at avoiding and minimising risks and strengthening your climate resilience. We also support you in systematically integrating climate-related risks into your existing risk management framework and in preparing relevant content for your sustainability reporting.

The right approach for your company

We support you in analysing risks and opportunities and ensure that you can make the most of the insights gained. Furthermore, we work with you to develop relevant content for your sustainability reporting. Whether it involves an initial analysis of climate-related risks and opportunities or updating an existing analysis in light of new findings or changed conditions: we will work with you to find the right approach. In doing so, we take your specific business context into account and consider factors such as the life cycles of your products.

What you receive from us

A TCFD-compliant risk and opportunity analysis with clear reference to recognized climate scenarios.
Concrete, implementable proposals for measures, tailored to your company.
A reliable basis for the strategic integration of climate issues into your business management.
Clear and comprehensible documentation, including a description of methods for your reporting – e.g. in accordance with OR 964, CSRD or ESRS.
Personal advice and support from experienced SuCo experts – from kick-off to the final results report.

Project Examples