Step
How to do so
Structure the effort
Ultimately, financial quantification should provide information and data that enables a company to respond to regulatory and other stakeholder demands. Outputs will, in many cases, need to be audit ready.
Companies will require a structured approach to meeting these. Key process steps should include:
Defining risk and opportunity items, timeframes, and scenarios
Confirming bespoke quantification methodologies and models
Data collection and input
Summarizing results and determining materiality for financial statements and disclosure.
Engage relevant stakeholders
A cross functional approach is required to ensure success (e.g., input from finance teams is critical for financial statement integration).
Identify and engage subject-matter experts (SMEs) and working groups to support the process (e.g., with validating methodologies, data collection, and integrating into financial reporting).
Further details and suggestions on how to approach this within an organization will be detailed in the second blog in this series.
Prepare data inputs
For the issues identified (e.g., flooding, carbon pricing, etc.), gather key data or information within the business to support methodology development and data requirement compliance. This may require SMEs and working groups to undertake initial assessments, work with other stakeholders across the business, etc.
Suggestions on who to include when preparing data inputs will be detailed in the second blog in this series.