What began as a recommendation from the TCFD is now firmly embedded in a range of regulatory frameworks. Switzerland’s Code of Obligations (Art. 964a et seq.), the ESRS in the EU, and the IFRS/ISSB standards internationally have led companies to assess and disclose climate risks more systematically. That is real progress. But what should companies do next? Our recent work with clients has yielded several insights that go well beyond regulatory requirements.
Bringing Risks and Opportunities to the Same Table
One of the most valuable effects of the TCFD approach is often underestimated: It calls for risks and opportunities to be considered together. In most companies, these two areas are kept separate: Risks fall under risk management, while opportunities belong to business development. When it comes to climate, both suddenly have a seat at the same table.
In our workshops, we see time and again just how valuable this can be. A discussion of heat risks and disrupted transportation routes at a production site can quickly lead to ideas for new products, more efficient processes, or stronger supplier relationships. This integrated perspective is one of the most important benefits of climate reporting.
From Qualitative Narratives to Quantitative Scenarios
But we cannot stop there. Many climate risk assessments are still largely qualitative: a heat map, a few judgments, and a paragraph in a report. That is no longer sufficient for sound risk management. Companies that want to manage climate risks effectively need rigorous scenario analysis that traces chains of impact and transparently tests underlying assumptions.
Artificial intelligence can help in targeted ways: organizing large datasets, exploring alternative scenarios, and identifying interdependencies. AI does not replace expert judgment, but it can make analyses more detailed, faster, and more robust.
Physical Risks: From Business Locations to Financial Metrics
Using leading data platforms, we assess the physical climate risks facing business locations and translate the findings into financial metrics for our clients. Demand for this work increased significantly in 2025. The hot, dry summer of 2026 further demonstrated to many decision-makers just how tangible and urgent these issues have become.
The Real Bottleneck: The Supply Chain
Our work with clients reveals another, perhaps even more important trend: The greatest vulnerabilities often lie beyond a company’s own operations, within its typically global value chain, particularly its supply chain.
We are increasingly observing how geopolitics and climate risks intersect, amplifying the overall risk. Consider the following:
- Geopolitics: Since late February 2026, the Strait of Hormuz has effectively been closed on several occasions due to the war in Iran. This chokepoint handles around 20% of global energy trade and even larger shares of basic materials such as helium and ammonia.
- Climate: At the same time, low water levels have repeatedly disrupted shipping on the Rhine this year, effectively dividing the waterway in two. Historic lows were recorded at the Kaub gauge, forcing cargo vessels to travel with reduced loads or suspend operations entirely.
The causes could hardly be more different, yet the consequences are the same: Critical materials needed for production become more expensive, arrive late, or fail to arrive altogether. For procurement, production, and finance teams, it ultimately makes little difference whether a raw material is unavailable because of a maritime blockade or a river running dry. Both threaten a company’s ability to deliver and its margins, leaving less room to maneuver.
This is why it pays to analyze physical climate risks and geopolitical disruptions together: Which materials are critical? Where do they come from, and along which routes? Where do risks converge? And what alternatives can be put in place in time?
Let’s Analyze These Risks Together
Sustainserv brings together regulatory expertise, rigorous scenario analysis, AI-supported assessments, and leading climate risk platforms. We help clients understand the physical climate risks affecting their facilities and supply chains, translate those risks into financial impacts, and identify concrete actions and opportunities that strengthen resilience.
Get in touch. Together, we can identify vulnerabilities in your supply chains before the next summer of extreme heat or the next crisis exposes them.
Get in touch. We are happy to tell you more about it.
