CLIMATE CHANGE (ESRS E1)
ESRS E1: Why comprehensive climate management is needed
ESRS E1 affects almost every company
Current climate change is the first human-caused global environmental crisis. It has the potential to threaten the existence of humanity and large parts of the biosphere and will continue for many decades. Global warming is currently accelerating; 2023 (like many previous years) was the warmest year on record.
Every person, as well as every company, is affected by the climate crisis in different ways and contributes to its progress to different extents. Companies bear a greater responsibility to combat climate change than any individual.
Reporting requirements are increasing
In order to curb climate change and its catastrophic effects, individual countries like Germany have obligations under international law (such as the Paris Agreement, EU Green Deal). These will lead to fundamental changes, especially in energy supply and use or greenhouse gas emissions, as well as more extensive reporting requirements for companies. Those companies that are hesitant to react are increasingly under pressure to act and are taking a reputational risk.
Limit damage. Realize opportunities
Climate change favours weather extremes, which can cause extensive damage to companies: destroyed production facilities, interrupted supply chains, impaired (energy) infrastructure.
Companies that emit large amounts of greenhouse gases not only face increasing liability risks, but also need to consider the future viability of their business model. However, there is great business potential for companies that can contribute to solving the climate crisis.
Understanding the risks and opportunities of climate change and the adaptation and mitigation measures derived from it, will determine the future economic success of organizations. It will also be crucial to take employees along on this journey.
With our comprehensive expertise, we would be happy to support you with your climate-related challenges.
How we support you
Keynote speech “Climate Change”
In an engaging presentation, we highlight topics such as climate justice, impact on natural disasters, climate protection and adaptation processes
Climate change boot camp
We offer an in-depth, interactive overview of the importance of the climate crisis for society, the economy and your own company with many practical examples
Workshop "1HourForTheClimate" (#1H4C)
In an interactive one-hour format, we sensitize and activate your entire workforce about the topic of climate in a playful and highly informative way
Fit for Legislation – Climate Change
We ensure that you meet all regulatory requirements, e. g. through an ESRS E1 gap analysis
Net Zero Strategy
With our partners, we accompany you from recording your CO2 footprint to a solid reduction plan
Communication
We enable you to communicate climate change in a resilient and transparent way, while avoiding greenwashing traps.
Contact me:
Maresa Bachmann
Senior Consultant
Phone: +49 151 670 244 96
E-mail: maresa.bachmann@fors.earth
What companies should know about climate change
Here you will find the most important questions and answers. We would be happy to answer any further questions in a personal conversation.
The climate crisis is the consequence of humanity's greatest failure to date. Every producing (and therefore emitting) company influences our global climate, albeit to different degrees depending on their business model. However, global warming is only one aspect of a polycrisis, i.e. a cluster of crises that partly influence each other, consider, for example, of the loss of biodiversity. A climate strategy alone is therefore not enough. It can only be one of several building blocks in a holistic sustainability strategy based on a solid materiality analysis.
The climate crisis affects every person and every company worldwide. Companies are exposed to different risks.
Acute physical climate risks include the effects of increasing weather extremes. Long-term physical risks arise from rising sea levels and changes in precipitation regimes. Both can lead to direct damage to buildings and production facilities, as well as the interruption of supply chains, resulting in financial loss.
Transitional climate risks are risks that arise for a company over a transitional period of decades. Either due to political regulation, such as emission restrictions and required conversions to new technologies or due to market economy conditions. Transitional risks depend heavily on the business model and the political environment. These include, for example, reputational risks that can arise if a company’s actions are harmful to the climate or if it fails to implement required climate protection measures.
Global warming is a long-term challenge and, even with ambitious climate protection efforts, cannot be stopped this century, only contained. While transitional risks will be relevant for a few decades, physical risks have no end in sight.
Climate change can create opportunities for those companies whose products or services contribute to solutions for climate protection. The market for such products is growing rapidly due to increasingly strict climate protection regulations. Existing business models should be reviewed for their future viability and adjusted if necessary. Dealing with climate change transparently and constructively can help to strengthen your own brand and enhance its resilience.
If climate is a material topic to a company, it must take a position within the framework of the CSRD, among other things:
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Positive and negative impacts as well as risks and opportunities of the company in relation to climate change (ESRS 2 SBM-3) |
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Transition plan: Plans and capacities of the company to adapt the business model to the 1.5°C target (ESRS E1-1) |
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The company's previous, current and planned strategy for mitigating and adapting to climate change (ESRS E1-2) |
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Measures planned and taken to achieve the company's climate goals (ESRS E1-3) |
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Metrics and Goals:
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The short-, medium- and long-term financial impact of the risks and opportunities arising from the company's impacts and dependencies on climate change and how the company manages them (ESRS E1-9) |
In order to avoid dangerous tipping points caused by climate change, we must succeed in limiting global warming to a maximum of 1.5 degrees Celsius. However, the emissions reductions promised by governments so far are only enough to limit warming to around 2.8 degrees. Even with increased efforts to reduce greenhouse gases, there will still be 37.5 million tons of residual emissions from agriculture, industry and waste treatment in 2045. Offsetting emissions through high-quality renaturation projects that meet strict criteria is therefore essential. However, it is also clear that compensation can only ever be the second-best option – the top priority is to avoid and reduce greenhouse gases.
In recent years, there has been a significant increase in advertising claims promoting products and services as supposedly climate-friendly Terms such as “climate neutrality” or “climate-friendly” are often used in the context of sustainability communication. However, these claims do not always have serious climate protection efforts behind them. Many advertising claims are misleading and deceive consumers. In this context, numerous organizations and companies have already been warned or even sued by the consumer or competition agencies. If the “Green Claims Directive” proposal passed in March 2023 is incorporated into German law, transparent and honest climate communication with well-founded and verifiable statements will even become mandatory.
Climate Change Insights
Selected project descriptions and blog articles for anyone who wants to know more.
