Management of corporate, climate and transition risks

Name: Claudia

Surname: Cuomo

Tutor (surname): Prof. Dalmazzone

The long-term climate change objective agreed in the context of the UNFCCC is to limit the global average temperature increase to below 2°C compared to pre-industrial levels, guiding all climate actions in the European context and beyond to develop regulations and plans in order to reach that goal.

Climate-related risk that will affect firms worldwide can be distinguished into two categories: transition risk, which refers to the implementation of climate policies, potential changes in technologies, shifts in consumer preferences, and reputational implications (even litigation); and physical risk, which arises from extreme events or longer-term shifts in climate patterns.

To help industries mitigate their risks related to climate change and to maximize opportunities associated with the net-zero transition, this project will: (i) analyze the most impacted sectors and the relative transition risks; (ii) investigate the impact that the ecological transition may have on companies, focusing on the evaluation of business risks raised by the transition process, including regulatory risk, financial risk, market risk, reputational risk, and insurance risk; (iii)  identify potential mitigation strategies. The purpose is to implement a methodology to assess transition risks for those sectors that are most impacted by decarbonization objectives by analyzing both quantitative and qualitative data and provide a decision support tool for improving business preparedness for climate and transition risks that can be used across sectors and industries.

This project is developed in collaboration with the environmental consulting society Golder Associates with the ultimate goal of improving the awareness and resilience of companies to climate and transition risks, also helping financial institutions and investors by increasing their knowledge on the level of sustainability and creditworthiness of investment.