Corporate Sustainability Due Diligence Directive (CSDDD) 

The CSDDD aims to ensure that companies active in the EU market contribute to sustainable development and the sustainability transition by identifying, preventing, mitigating, and accounting for adverse human rights and environmental impacts in their operations and value chains. 

How RedLines Can Support 

Article 8 – Identifying Actual and Potential Adverse Impacts

We can assist organisations in: 

• Conducting comprehensive climate risk assessments across operations and value chains 
• Identifying both physical and transitional climate risks 
• Quantifying potential financial impacts of identified risks 

Article 10 – Preventing Potential Adverse Impacts

RedLines expertise allows businesses to: 

• Develop strategies to mitigate identified climate risks 
• Assess the effectiveness of proposed prevention measures
  
• Prioritise actions based on the severity and likelihood of impacts 

Article 11 – Bringing Actual Adverse Impacts to an End

We can support companies by: 

• Providing data-driven insights to address ongoing climate-related impacts

• Offering quantitative analysis of the effectiveness of existing measures
• Monitoring the effectiveness of implemented measures

RedLines Can Also Provide Valuable Support For: 

Due Diligence Policy & Reporting

• Assisting in the integration of climate considerations into overall due diligence policies 
• Assisting in the preparation of comprehensive climate-related disclosures aligned with CSDDD requirements 

Carbon Disclosure Project (CDP) 

The CDP is a global disclosure system for companies, cities, states, and regions to manage their environmental impacts. It focuses on climate change, water security, and deforestation. 

How RedLines Can Support 

3.1 Business Strategy 

We can assist organisations in: 

• Analysing climate-related risks and opportunities that have influenced business strategy 
• Quantifying the financial implications of identified climate-related risks and opportunities 
• Developing climate-related scenario analyses to inform business strategy 

3.5 Emissions Reduction Initiatives 
RedLines expertise allows businesses to: 

• Identify and assess potential costs associated with not reducing emissions 
• Quantify the potential financial impacts of these initiatives 
• Prioritise initiatives based on their cost-effectiveness  

4.1 Climate-Related Risks and Opportunities 
We can support companies by: 

• Conducting comprehensive assessments of climate-related risks and opportunities across various time horizons (short, medium, and long-term) 
• Quantifying potential financial impacts of identified risks and opportunities, including both direct and indirect effects on the business 
• Providing data-driven insights to help prioritise and manage the most significant climate-related risks and opportunities 

EU Sustainable Finance Disclosure Regulation (SFDR) 

The SFDR is an EU regulation that aims to improve transparency in the market for sustainable investment products, prevent greenwashing, and increase disclosure on sustainability issues. It requires financial market participants and financial advisers to provide specific information about how they consider sustainability risks and adverse sustainability impacts in their investment decisions and advisory processes. 

How RedLines Can Support 

Article 3: Transparency of sustainability risk policies 

We can assist financial market participants by: 

• Providing comprehensive climate risk assessments to inform sustainability risk policies 
• Offering data-driven insights on how climate risks may affect investment decisions

   Supporting the development of robust methodologies for integrating climate risks into overall risk management processes 

Article 6: Transparency of the integration of sustainability risks
We can help financial institutions by: 

• Conducting detailed analyses of how climate risks might impact the value of investments 
• Quantifying potential financial impacts of climate-related risks on various asset classes
• Offering scenario analyses to assess the resilience of investments under different climate scenarios

Task Force on Climate-related Financial Disclosures (TCFD) 

The TCFD has developed a framework to help companies more effectively disclose climate-related risks and opportunities. This framework is structured around four core elements, often referred to as pillars: 

• Governance 
• Strategy 
• Risk Management 
• Metrics and Targets 

How We Can Support 

RedLines can provide valuable assistance across several aspects of the TCFD framework, particularly in the areas of Strategy and Risk Management. Here’s how RedLines can support your business in implementing TCFD recommendations: 

Strategy 

RedLines can help by: 

• Analysing climate-related risks and opportunities that may influence business strategy 
• Quantifying the financial implications of identified climate-related risks and opportunities 
• Supporting the development of climate-related scenario analyses to inform business strategy 

Risk Management 

RedLines expertise allows businesses to:

• Identify and assess potential climate-related risks and their impacts on operations 
• Quantify the potential financial impacts of these risks 
• Develop robust methodologies for assessing climate-related risks 
• Prioritise risk management strategies based on their cost-effectiveness and potential impact 

Metrics and Targets 

While RedLines doesn’t calculate emissions, it can assist in: 

• Identifying appropriate climate-related metrics for assessing risks and opportunities 
• Analysing potential financial impacts of climate-related risks and opportunities
• Supporting the development of climate-related targets aligned with business strategy 

Taskforce on Nature-related Financial Disclosures (TNFD) 

The TNFD is a market-led initiative that aims to develop a risk management and disclosure framework for organisations to report and act on nature-related risks and opportunities. The framework is structured around four pillars: Governance, Strategy, Risk Management, and Metrics & Targets. 

How RedLines Can Support 

RedLines can provide valuable assistance with the following TNFD recommendations: 

A2: Identification of nature-related risks and opportunities 

RedLines expertise allows businesses to: 

• Assess potential nature-related risks, including physical, transition, and systemic risks 
• Identify nature-related opportunities that could benefit the organisation 
• Provide data-driven insights on how these risks and opportunities might affect business strategy and financial planning 

A3: Analysis of risks and opportunities 

 RedLines can support companies by: 

• Conducting scenario analyses to assess the resilience of the organisation’s strategy against different nature-related risk scenarios 
• Quantifying potential financial impacts of identified risks and opportunities

   Prioritising risks and opportunities based on their potential impact and likelihood 

ISO 14091

ISO 14091, titled “Adaptation to climate change – Guidelines on vulnerability, impacts and risk assessment”, provides organisations with a structured approach to understand their vulnerability to climate change and assess climate-related risks. 

Key Takeaways

• Offers a consistent, structured, and pragmatic method for evaluating climate risks and vulnerabilities 
• Helps organisations assess their vulnerability to climate change impacts 
• Supports local governments and communities in adapting to climate change based on vulnerability, impacts, and risk assessments 

How RedLines Can Support 

RedLines can assist organisations in implementing ISO 14091 by: 

Vulnerability Assessment 

• Conducting comprehensive assessments of an organisation’s vulnerability to climate change impacts 
• Identifying key areas of exposure and sensitivity within operations and value chains 
• Providing data-driven insights on potential climate change impacts specific to the organisation’s context

Climate Risk Assessment 

• Performing detailed climate risk assessments in line with ISO 14091 guidelines 
• Quantifying potential financial implications of identified climate risks 
• Developing scenario analyses to assess the organisation’s resilience under different climate futures

Adaptation Planning 

• Offering data-driven insights to inform climate change adaptation strategies 
• Assisting in the prioritisation of adaptation measures based on risk assessment outcomes 
• Supporting the integration of adaptation considerations into existing management systems

Stakeholder Engagement 

• Providing data and analysis to support communication with stakeholders about climate risks and adaptation efforts 
• Assisting in the development of clear, evidence-based messaging on climate vulnerabilities and adaptation strategies 

IFRS S2 Climate-related Disclosures 

IFRS S2 is a standard issued by the International Sustainability Standards Board (ISSB) that requires entities to disclose information about their climate-related risks and opportunities. It aims to provide users of general purpose financial reporting with useful information about an entity’s climate-related risks and opportunities. 

How We Can Support 

RedLines can assist organisations in implementing IFRS S2 by focusing on the following climate-related aspects: 

Governance 

• Providing data-driven insights to inform board and management discussions on climate-related risks and opportunities 
• Supporting the development of robust governance structures for overseeing climate-related issues

Strategy 

RedLines can help businesses by: 

• Analysing climate-related risks and opportunities that may influence business strategy 
• Quantifying the potential financial impacts of identified climate-related risks and opportunities 
• Supporting the development of climate-related scenario analyses to assess the resilience of business strategies 

Risk Management 

RedLines expertise allows businesses to: 

• Identify and assess potential climate-related risks and their impacts on operations 
• Quantify the potential financial implications of these risks 
• Develop robust methodologies for assessing and prioritising climate-related risks 

Metrics and Targets 

While RedLines doesn’t calculate emissions, it can assist in: 

• Identifying appropriate climate-related metrics for assessing risks and opportunities 
• Analysing potential financial impacts of climate-related risks and opportunities 
• Supporting the development of climate-related targets aligned with business strategy 

RedLines data-driven approach can help organisations understand and disclose how climate-related risks and opportunities might affect their financial position, financial performance, and cash flows over the short, medium, and long term. This comprehensive analysis supports businesses in providing the transparent and decision-useful information required by IFRS S2. 

EU Taxonomy for Sustainable Activities 

The EU Taxonomy is a classification system that provides a common language for identifying environmentally sustainable economic activities. It aims to help companies, investors, and policymakers make informed decisions about sustainable investments and combat greenwashing. 

Key Aspects of the EU Taxonomy 

Six Environmental Objectives: 

• Climate change mitigation 
• Climate change adaptation 
• Sustainable use and protection of water and marine resources 
• Transition to a circular economy 
• Pollution prevention and control 
• Protection and restoration of biodiversity and ecosystems 

Technical Screening Criteria:

• These determine the conditions under which an economic activity qualifies as contributing substantially to one of the environmental objectives.

“Do No Significant Harm” (DNSH) principle:

• Activities must not significantly harm any of the other environmental objectives.

Minimum Safeguards:

• Activities must comply with minimum social and governance safeguards.

How RedLines Can Support 

RedLines can assist organisations in navigating the EU Taxonomy by: 

Climate Change Mitigation and Adaptation 

• Conducting comprehensive climate risk assessments to identify potential impacts on business activities 
• Analysing how business activities contribute to climate change mitigation or adaptation 
• Quantifying the potential financial implications of climate-related risks and opportunities 

Technical Screening Criteria 

• Providing data-driven insights to help businesses understand and meet the technical screening criteria for their specific economic activities 
• Assisting in the assessment of whether activities meet the “substantial contribution” thresholds

“Do No Significant Harm” (DNSH) Assessment 

• Offering analysis to ensure that activities aimed at one environmental objective do not significantly harm the others 
• Supporting the development of strategies to mitigate potential negative impacts on other environmental objectives

Reporting and Disclosure 

• Assisting in the preparation of clear, data-driven disclosures on Taxonomy-aligned activities
• Supporting the integration of Taxonomy considerations into existing sustainability reporting processes