what climate risks does our company face question fill in

Climate risk is more than just reporting CO2 emissions

The question about climate risks is not about how much emissions your company causes, but about how climate affects your company. This is a shift that many respondents miss because they have just finished the emissions questions. The VSME basic module of EFRAG distinguishes two types of risks: physical risks (drought, flooding, heat, storm damage to buildings or to suppliers) and transition risks (costs due to new regulations, more expensive CO2 allowances, customers switching to greener competitors). Your customer wants to know whether you have thought about this, not whether you already fully manage the risk.

In practice, the list often asks three things: whether you have carried out a risk assessment, whether that assessment includes both physical and transition risks, and whether there is a plan to respond to it. If you have not yet documented this, then "no, not yet implemented" is a valid answer — better than a vague "yes" without underlying documentation. Evidence that is often requested includes a risk analysis, a climate scenario analysis, or simply a note from management in which the main risks are identified. If that is missing, this subject is a good opportunity to put it on paper for the first time, even if it is just one A4.

Where this comes from: the VSME and the link with scope 3

This distinction between physical and transition risks is set out in the climate module of the VSME standard of EFRAG, which was specifically created for non-listed SMEs that receive this type of question from customers. The standard deliberately links climate risks to emissions figures: a company with high emissions in the value chain (scope 3) often also runs more transition risk, because suppliers and customers in that chain are all under pressure to become more sustainable. If you have already set a target to reduce emissions, that is often already an indication that you take transition risks seriously — some portals explicitly ask for this as a follow-up question.