EmissionsrisikoManagements

Emissions Risk Management (ERM) refers to the process of identifying, assessing, and mitigating the financial risks associated with greenhouse gas emissions and climate change. It is a critical component of corporate sustainability and risk management strategies. ERM involves several key steps: first, companies must identify the sources of their emissions, which can include direct emissions from their own operations and indirect emissions from their supply chain. Next, they assess the potential financial impacts of these emissions, considering factors such as regulatory changes, carbon pricing, and market demand for low-carbon products. Mitigation strategies are then developed to reduce emissions, which can include investing in renewable energy, improving energy efficiency, and adopting sustainable business practices. Monitoring and reporting are essential to track progress and ensure transparency. ERM is not only about reducing emissions but also about managing the financial risks that come with them. By integrating ERM into their strategies, companies can enhance their resilience, attract investors, and contribute to a more sustainable future.