ESGClimate

ESGclimate is a term used to describe the climate-related dimension of environmental, social, governance (ESG) analysis and reporting. It refers to the subset of ESG metrics and disclosures that pertain to how climate change, climate policy, and physical climate risks affect a company, asset, or portfolio. The term may describe a conceptual framework, a data framework, or a suite of tools and services that professionals use to assess and disclose climate-related risks and opportunities within ESG analysis.

Key components of ESGclimate include greenhouse gas emissions (Scope 1-3), energy use and efficiency, climate scenario analysis, exposure to physical risks such as extreme weather and supply chain disruption, transition risks from policy and market shifts, financial impact assessments, and governance processes overseeing climate risk. Data sources typically combine internal reporting, third-party datasets, and regulatory disclosures to support consistent assessment.

Standards alignment is common, with practitioners mapping ESGclimate outputs to frameworks such as the TCFD, SASB, GRI, and IFRS S1/S2 to aid comparability. In practice, asset managers, corporations, and regulators may use ESGclimate results to compare performance, manage risk, inform disclosures, and guide capital allocation decisions.

Challenges include data quality and availability, a lack of universal metrics, industry-specific factors, potential double counting, and concerns about greenwashing. Regulatory emphasis on climate disclosures has heightened the importance of clear, credible ESGclimate metrics. The term has grown in prominence as climate risk becomes central to ESG strategy and reporting.