RM2: Resilience of Strategy to Climate-Related Risk and Opportunity
Does the entity’s strategy incorporate resilience to climate-related risks and opportunities?
Assessment Instructions
Intent: What is the purpose of this indicator?
This indicator assesses how clearly the entity articulates its strategy for managing climate-related risks and opportunities. A well-defined strategy helps fund managers respond to shifting conditions, align resilience considerations with broader business objectives, and evaluate how a transition to a lower-carbon economy may affect the entity.
Communicating and disclosing how the strategy may need to adapt over time also provides insight into the entity’s preparedness for future climate-related impacts, including how it would handle the transition to a lower-carbon global economy.
Input: How do I complete this indicator?
Instructions apply to first-year fund participants or funds that materially changed their management practices since last year's assessment.
Select Yes or No: If selecting 'Yes', select all applicable sub-options.
Note: The NGFS scenarios included as options in the 2026 GRESB Assessment refer to the 2024 version. Please report any 2025 NGFS scenarios under ‘Other’.
Open text box: The content of this open text box is not used for scoring, but will be included in the Benchmark Report. Participants should use this open text box to communicate on:
Description of how resilient the entity’s strategy is to climate-related risks and opportunities. The text should define “resilience” in the context of the entity. If applicable, explain how the entity’s strategy is operationalized into policies and management actions; where the entity’s strategy may be affected by climate-related risks and opportunities; and how its strategy might change to address such potential risks and opportunities;
The consideration of the transition to a lower-carbon economy consistent with a 2°C or lower scenario and, where relevant to the organization, scenarios consistent with increased physical climate-related risks;
Associated time horizon(s) considered.
Terminology
Climate-related opportunities
The opportunities produced by efforts to mitigate and adapt to climate change, such as through resource efficiency and cost savings, the adoption and utilization of low-emission energy sources, the development of new products and services, and building resilience along the supply chain. Climate-related opportunities will vary depending on the region, market, and industry in which an organization operates
Climate-related risks
The risks associated with the potential negative impacts of climate change on an organization. These are generally categorized as either transition risks or physical risks. See Transition risks and Physical climate-related risks below.
Overall business strategy
The entity’s long-term strategy for meeting its objectives.
Physical climate-related risks
The risks associated with the potential negative direct and/or indirect impacts of event-driven (acute) or driven by longer-term shifts in climatic patterns (chronic). Physical risks emanating from climate change can be event-driven (acute) such as increased severity of extreme weather events (e.g., cyclones, droughts, floods, and fires). They can also relate to longer-term shifts (chronic) in climatic patterns such as precipitation and temperature that affect entities. Participants who possess long-lived or fixed assets, operate in climate-sensitive regions, rely on water availability, or have value chains exposed to the aforementioned hazards, are likely to be exposed to physical climate-related risk.
Physical risk scenarios
Scenarios used in the exploration and assessment of physical climate risks. These scenarios can include projections of a host of climatic variables, including the frequency and severity of particular extreme weather events. Generally, these scenarios are linked to one of the Representative Concentration Pathways (RCPs). The RCPs, adopted by the IPCC [Intergovernmental Panel on Climate Change], have been used for analysis by ensembles of climate models and have become associated with particular climate targets. RCP2.6, which represents an atmospheric concentration profile ending at a radiative forcing of 2.6 watts per square meter at the year 2100, is associated with an atmospheric limit of 450 parts per million CO2‑equivalent, and is taken as satisfying a 2°C goal.
Transition risks
The risks associated with the transition to a lower-carbon global economy. These risks most commonly relate to policy and legal developments, technological changes, market responses, and reputational concerns. These risks are particularly relevant for actors with high GHG emissions within their value chain and are thus sensitive to policy and regulatory actions aimed at emissions reductions, energy efficiency, etc.
Transition risk scenarios
Scenarios that describe the evolution of the global economy to a lower-carbon state. These scenarios often describe the interactions between various sectors of the economy and link such interactions to wider narratives around the relative aggression of the transition to lower carbon economics. Commonly used transition risk scenarios include those produced by the IEA [International Energy Agency] including its Sustainable Development Scenario (SDS), Beyond 2 Degrees Scenario (B2DS), and Net Zero Emissions by 2050 scenario (NZE2050), the NGFS [Network for Greening the Financial System], and the Inevitable Policy Response’s Forecast Policy Scenario (FPS). Real Estate Participants might also use the CRREM decarbonization pathways. Infrastructure Participants might also use pathways from TPI [Transition Pathway Initiative] or those in line with the SBTi [Science Based Targets initiative].
2°C or lower scenario
A 2°C scenario is one in which the world is able to hold the increase in global average temperature to 2°C above pre-industrial levels. Such a scenario often entails a moderate to aggressive shift in the economy to a lower-carbon state and includes the associated severity of transition risks. A “lower” scenario in this context is one in which the global economy changes in such a way that the temperature rise is held to lower than a 2°C global average temperature rise above pre-industrial levels. A 1.5°C scenario is an example of a lower scenario.
Scenario analysis
Scenario analysis refers to the systematic use of scenarios in order to better understand the relevant impacts on an organization, and facilitate the creation of robust strategies under probable and potential future developments. It can help the participant to inform their financial planning process and provide insights into their strategies’ resilience to different climate-related scenarios.
Scoring
Scoring: How does GRESB score this indicator?
The scoring of this indicator is equal to the fraction assigned to the selected option, multiplied by the total score of the indicator.
References
Get Support: Solution Providers
GRESB Solution Providers are independent, third-party organizations within the GRESB Partner network that offer specialized products, tools, and services to support sustainability performance outside the GRESB Assessment process.
Currently, there are no GRESB Solution Providers associated with this indicator.
GRESB will continue to update this section as the GRESB Solution Provider network grows. Please check back regularly to find GRESB Solution Providers who can support your sustainability performance.
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