Why Now Is the Time to Act
The global economy is standing on the edge of a major climate reckoning. The ongoing reliance on fossil fuels is driving a rise in the frequency and intensity of floods, wildfires, and storms. In 2025, climate hazards are already taking a severe toll—from wildfires in Los Angeles burning over 40,000 acres to deadly flash floods across Texas in July, disrupting lives and businesses alike. This growing volatility is not just environmental—it’s financial. According to the World Economic Forum, in 2023 alone, experts attributed $143 billion of the $451 billion in weather-related damages directly to climate change (WEF, 2025).
As climate-related risks intensify—both in frequency and financial magnitude—businesses can no longer afford to treat them as distant threats. Yet, many still do. Climate risks are often viewed as long-term concerns, leaving companies unprepared for the tangible and transitional challenges already unfolding in the short-term. This gap between perception and reality could cost businesses dearly.
What Are Climate Risks?
Climate risks refer to the potential negative impacts of climate change on businesses, economies, and society at large. The Task Force on Climate-related Financial Disclosures (TCFD) encourages organizations to assess climate risks across two main categories:
- Physical Risks – These include acute events like hurricanes and floods,
and chronic risks such as the rise in sea levels and global mean temperatures.
- Transition Risks: These arise from the global shift toward a low-carbon economy and include regulatory changes, market shifts, reputational risks, and technological disruption.
Understanding these risks in detail allows companies to develop adaptation (preparing for unavoidable impacts) and mitigation (reducing emissions and exposure) strategies. Furthermore, disclosing these risks is not just recommended — it is increasingly required1.
Crucially, the same process unveils climate-related opportunities, resulting from potentially positive financial impacts. Examples can be reduced operating costs (e.g., through efficiency gains and cost reductions) or increased revenues through access to new markets or increased ability to operate under various conditions.
The Business Value of Climate Management and Resilience // The Case for Early Climate Risk & Opportunity Analysis
The latest report “The Cost of Inaction” from BCG and WEF underscores powerful key messages:
- Inaction poses material financial risk: Physical climate impacts could reduce corporate EBITDA by up to 25% by 2050, while accelerating global climate policies, such as carbon pricing in a net-zero scenario could increase costs by up to 50% in high-emission sectors by 2030.
- Proactive climate management yields strong returns: Early investment in adaptation and mitigation delivers measurable value—returning $2 to $19 per $1 spent—while enhancing operational resilience.
- Low-carbon transition offers growth potential: Green markets are projected to nearly triple to $14 trillion by 2030. Companies that act early can strengthen competitiveness, reduce risk exposure, and access new revenue streams.
Climate management is now a core component of corporate governance. Companies that integrate climate strategies into their operations and disclosures build trust with investors, meet tightening regulatory expectations, and improve overall risk management. Moreover, climate leadership attracts talent and enhances brand equity in an increasingly conscious consumer market.
In short: early climate risk and opportunity analysis is no longer optional—it’s a strategic lever for growth, resilience, and long-term profitability.
How DFGE Supports You on the Path to Climate Resilience
At DFGE, we support companies in transforming climate-related risk into strategic foresight and competitive advantage.
Our offering includes:
DFGE supports companies in the assessment of climate risks and opportunities based on the TCFD framework and in accordance with the regulatory requirements of the ESRS, in particular the E1 standard. We support our clients in the following areas, among others.
- Identification of material climate risks (physical and transition) and opportunities and their assessment with the help of workshops on a qualitative basis
- Quantitative analysis of physical climate risks using modeling software climada-deltaTM
- Conducting scenario analyses on a qualitative basis
- Analysis of the resilience of the business model
- First steps towards comprehensive climate risk management
- Detailed process documentation
Quantitative climate risk analysis
To identify the socio-economic effects of weather and climate for specific regions or locations, we carry out a software-supported quantitative analysis of physical climate risks for our clients. In doing so, we rely on the software solution of our cooperation partner CLIMADA Technologies.
Let DFGE help you turn climate risk into a resilient, profitable future. Contact us via mail or phone +49 8192 99733 20.
