This post discusses ESG Risk Attributes. Risk attributes are the characteristics and features of a risk that enhance our understanding of it. These attributes include factors that contribute to the overall level of risk associated with an event or a specific situation.
To gather a comprehensive collection of risk attributes, it is essential to establish a context—here, the context is ESG. By examining the content of the European Sustainability Reporting Standards (ESRS), you will discover that defining ESG risks involves more than just a title, general description, and assessment. We have collected a rich array of attributes required by ESRS and are excited to share them with you, dear reader.
The List of ESG Risk Attributes:
General section
Reference to sustainability matters (topics, sub-topics, sub-sub-topics)
Title
Time horizon - short-, medium- and long-term
General description
Affected Areas:
Geographic location or regions that are likely to be affected
and factors that increase the vulnerability of the affected area (e.g., lack of infrastructure)
Data sources - Sources of information or data used to identify and evaluate the risk
Reported by
Reported at
Updated at
Status - New, Pending Review, Under Review, Reviewed, Action Taken.
Assessment
Likelihood
Potential Magnitude in financial effects
Compliance (ESRS)
General Requirements:
Current and anticipated effects on business model, value chain, strategy and decision-making, and how undertaking has responded or plans to respond to these effects
Information about resilience of strategy and business model regarding capacity to address the risk
Changes to compared to previous reporting period
Covered by entity-specific disclosures - Yes/No
Environment Requirements:
Type of climate-related risk - Physical or Transition risk
Adaptation Measures
Identified within a scenario analysis - reference to a specific scenario, e.g. "NGFS Climate : Net Zero 2050"
Scenario analysis description
Social Requirements:
Number of people or description of the population segments at risk
Relationship between the risk and strategy and business model
The risk relates to specific social groups
Financial
Current financial effects - Financial effects on the undertaking’s financial position, financial performance and cash flows if there is a significant risk of a material adjustment within the next annual reporting period to the carrying amounts of assets and liabilities reported in the related financial statements;
Anticipated financial effects - Financial effects on the undertaking’s financial position, financial performance and cash flows over the short-, medium- and long-term.
Time Horizon
Anticipated financial effect (monetary amount)
Description
Value-Chain
Originating in value chain - Yes/No
Value chain actors:
Upstream, Downstream
Value Chain Stage
Description of Geographical Areas, Inputs, Outputs, Estimation Methods and other information
Mitigation (❤️)
Mitigation Measures
Response Strategy
Monitoring Indicators
If you have suggestions or recommendations on what might be missing from the list, let's collaborate: share your ideas, and in return, we'll thank you with a special gift from Mitigate 🎁