We have ongoing communication with this company about its management of climate risks and opportunities. Based on the depth of understanding demonstrated in prior discussions with management and board members, the ESG analyst identified this company as the best candidate in her coverage to share our differentiated expertise on physical climate risks. The ESG analyst and our director of climate research sought to provide additional guidance, answer questions, and encourage continued leadership in integrating physical risks and resilience into their enterprise risk management strategy.
We shared and discussed our P-ROCC framework [Physical Risks of Climate Change, another important output of our climate work] as a means to further enhance the companyâ€™s climate disclosure. We were pleased that the company is approaching physical climate risk the same way it has long approached transition risk: considering scenarios and establishing signposts to get ahead of risks that are becoming more probable. While it is too early to assess adoption of the framework in disclosures, we have found companies to be receptive
to enhanced guidance about physical risks.
The company is taking a risk-based approach, tackling regions where it sees more acute climate risk potential. The company is also prioritizing areas of future spending and growth over assets in harvest mode. It intends to disclose its physical risk assessment and management in financial filings.