Criterion B.11 - Climate risks and business model reflection

Regardless of the sector of activity and the size of the organisation considered, the success of a low-carbon transition presupposes an in-depth reflection on the business model and the climate risks (i.e. physical and transition) it faces. For this reason, candidate tools are expected to convey a clear and comprehensive message on all the risks that the fight against climate change poses to business models. Thus, any approach to transitioning towards a low-carbon and sustainable business model must address the following risks:

• Physical risk: the pure and simple disappearance or overly substantial modification of the environment in which an organisation operates, such that its economic model can no longer be sustained;
• Investor risk: loss of attractiveness to financiers due to insufficient consideration of the environmental impact of its activity. The GHG emissions reduction strategy is often central to this;
• Client/supplier risk: beyond the risk of public image, this concerns the inability to attract new clients because the organisation is identified as unprepared for the upcoming transition. Or, on the supplier side, it may involve the pure and simple loss of suppliers due to their vulnerability on environmental and climate issues, consequently impacting the organisation's own activity. Finally, the sometimes very rapid evolution of markets in favour of low-carbon consumption must be anticipated;
• Regulatory risk: the emergence of binding regulations on GHG management that could significantly disrupt an organisation's economic model and value;
• Risk related to energy vulnerability: dependence on fossil fuels that may cause significant disruptions to the organisation's activity.

Criterion

Mandatory	Criterion B.11 - Climate Risks and Business Model Reflection
Question	Does the candidate tool enable the identification of climate risks related to an organisation's activity? Does the candidate tool allow for reflection on the transformation of business models?
Answers	Yes, the tool provides awareness-raising on climate risks and business model change, and enables the link to be made between an organisation's climate risks and its flow mapping Yes, the tool provides awareness-raising on climate risks and business model change, and enables the identification of an organisation's climate risks Yes, the tool provides dedicated time for the identification of climate risks No
Implementation guidance	Analysis to be conducted transversally across the modules within the candidate tool, but also across the materials/elements associated with the launch meeting, reporting meeting, and awareness-raising. Verify whether the tool incorporates sufficient awareness-raising elements on climate risks, climate change adaptation and business model transformation, adapted to potential sector-specific challenges. Verify whether the tool enables at minimum a listing of an organisation's climate risks, or whether it allows the flow mapping to be linked to these risks.