How TBC approaches financial materiality assessment to inform action
Our approach to identifying, measuring and acting on nature-related risk and opportunities (R&O) is detailed by material we developed in partnership with our financial sector clients. It follows the industry leading approaches of Barclays and CISL (which our team helped define). This approach has been published by TNFD as a complement to their LEAP method and has been used with corporate and financial institutions considered leaders on the nature theme. Logos of those we have worked with on nature-related dependencies, impacts, risks and opportunities can be found below.
Assessing Risk and Opportunities
Step 1 Screening of R&Os for all assets
Step 2 Turning insight into strategy
Step 3 Embedding nature into business
Understand sector/location specific R&Os
Initial Understanding of R&Os
Understand critical dependencies
Inclusion of location-specific consideration
Inclusion of financial materiality consideration
Range of metrics using sector-specific guidance
Location-specific data (e.g. Ecoregion, Intactness Index, Cropland, Expansion)
Inclusion of future scenario data (e.g. from academic papers/models)
e.g. SBTN high impact commodities, ENCORE
Supply chain / sector risk management
Procurement decisions CAPEX Credit risk assesments, allocation decisions and financing terms. Capital allocation decisions
Risk Screening CSRD Resource Planning
Supplier & transaction due diligence and policies Client / supplier questionnaries
Some of the clients TBC works with :
Our assessment of financial materiality spans commodities, geographies, and types of finance. The assessments are both scientifically robust and commercially pragmatic by: Connecting our deep knowledge about the state of nature with the business and financial worlds; Connecting sustainability teams with commercial teams (e.g. treasury); and Supporting our clients to demonstrate the financial materiality of nature in the most cost-effective way, by navigating toward the most significant R&O.
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