Sustainability & Climate Risk Reviews

It is an independent assessment of how climate change and broader sustainability factors could affect your organisation's assets, operations, supply chain, and financial position, paired with a review of whether your governance and disclosure practices are adequate to manage and report on that exposure. We assess both physical risk (direct climate impact on assets and operations) and transition risk (the financial impact of the shift to a lower-carbon economy), and benchmark your governance and disclosure against the framework that actually applies to you.

It depends on your listing status and size. SEBI's BRSR (Business Responsibility and Sustainability Reporting) applies to the top listed companies by market capitalisation on a phased basis, with BRSR Core introducing a mandatory reasonable-assurance requirement on a defined set of ESG attributes, phased in from the top 150 listed entities and extending to the top 1,000 by FY 2026-27. A related requirement for ESG disclosure and assurance over a company's value chain has since been eased by SEBI to a voluntary basis. Companies below the applicable threshold are not statutorily mandated to file BRSR, but many face de facto obligations through investor questionnaires, lender covenants, or customer/supply-chain ESG requirements even without a direct statutory trigger.

Physical risk is the direct impact of climate change on your assets and operations — acute physical risk from extreme weather events like cyclones, floods, and heatwaves, and chronic physical risk from gradual shifts like rising temperatures, changing rainfall, or water stress. Transition risk is the financial and operational impact of the shift to a lower-carbon economy — policy risk (carbon pricing, CBAM), technology risk (stranded assets), market risk (shifting customer preference), and legal risk from climate-related litigation. Most businesses carry some exposure to both, but the balance differs enormously by sector — a coastal manufacturing facility skews toward physical risk, while a carbon-intensive exporter skews toward transition risk.

The Task Force on Climate-related Financial Disclosures (TCFD) published its recommendations in 2017, organising climate risk disclosure around governance, strategy, risk management, and metrics and targets. The IFRS Foundation's International Sustainability Standards Board (ISSB) has since built its climate-specific standard, IFRS S2, directly on the TCFD framework, effectively carrying its structure forward into a more formal global baseline standard. TCFD as a standalone reporting body has been formally disbanded with its monitoring role transferred to the IFRS Foundation, but the underlying four-pillar structure remains the practical backbone of most climate risk assessment and disclosure work, including much of SEBI's BRSR approach.

The EU's Carbon Border Adjustment Mechanism (CBAM) requires importers of certain carbon-intensive goods into the EU — currently iron and steel, aluminium, cement, fertiliser, hydrogen, and electricity — to report the embedded greenhouse gas emissions of those goods. The mechanism's definitive regime began on 1 January 2026, and the financial obligation — EU importers buying CBAM certificates to cover reported embedded emissions — is scheduled to begin from 1 February 2027, with the first certificate surrender covering emissions from goods imported during 2026. Indian exporters of CBAM-covered goods to the EU are directly affected because their EU importers already need embedded-carbon data from them to comply, and the cost impact will ultimately flow back through the commercial relationship even though the formal payment obligation sits with the EU importer. CBAM rules continue to evolve — thresholds, phasing, and covered categories should be reconfirmed against the current EU regulation at the time of any transaction.

Not necessarily as a strict precondition, but a credible review benefits from at least a first-pass Scope 1 and Scope 2 emissions picture, since transition risk exposure and disclosure metrics both depend on it. Where no inventory exists, we typically scope a phased build — Scope 1 (direct emissions) and Scope 2 (purchased energy) first, with the most material Scope 3 (value chain) categories added as data maturity improves, rather than attempting an unrealistic full Scope 3 build in the first year.

Scenario analysis stress-tests your strategy against different plausible climate futures — typically an orderly, lower-warming transition scenario and a delayed or disorderly, higher-warming scenario — using publicly available reference pathways such as those published by the Network for Greening the Financial System (NGFS) or the International Energy Agency. TCFD and ISSB both expect evidence of this exercise, not just a statement that climate risk has been 'considered'. It converts a vague risk acknowledgement into a structured, defensible assessment of how revenue, cost, and asset value could move under different futures.

A full-scope review including a first-time GHG inventory build and scenario analysis typically takes 9–11 weeks from scoping to board presentation for a mid-sized entity. A lighter governance-and-disclosure-gap review for a company that already has an emissions inventory can be completed in 4–6 weeks. BRSR Core assurance, where applicable, is scoped separately and timed to your annual filing deadline.

A risk register covering identified physical and transition risks, each rated by severity and likelihood; a scenario analysis output; a governance gap assessment against TCFD's four pillars (or the specific framework applicable to you); a disclosure gap analysis against BRSR, BRSR Core, TCFD, ISSB, or a specific investor/lender requirement; and a phased disclosure-readiness roadmap. All of this is presented directly to the board, audit committee, or ESG committee, not just delivered as an emailed PDF.

We assess supply chain exposure to the extent it is material to your risk profile — supplier concentration in climate-vulnerable regions, dependency on carbon-intensive inputs, and CBAM-relevant embedded-carbon data flows for EU-bound exports. A full supplier-by-supplier climate risk assessment across an extended, multi-tier supply chain is typically scoped as a more extensive follow-on exercise, calibrated to how much of your total footprint and risk genuinely sits upstream.

BRSR is SEBI's prescribed sustainability disclosure format for applicable listed companies, covering environmental, social, and governance parameters in a structured format. BRSR Core is a defined subset of BRSR indicators that carries a mandatory reasonable-assurance requirement, phased in by market-capitalisation tier — top 150 listed entities from FY 2023-24, extending to the top 1,000 by FY 2026-27. A separate, related requirement for assurance over a listed entity's value-chain ESG disclosures has since been eased by SEBI from comply-or-explain to fully voluntary. Our climate risk review builds the underlying risk assessment, governance structure, and metrics that make a credible BRSR (and BRSR Core, where applicable) disclosure possible — the disclosure filing itself, and any required assurance, is coordinated as part of or alongside this engagement depending on your specific applicability.

Primarily the TCFD four-pillar structure (governance, strategy, risk management, metrics and targets), carried forward into the IFRS Foundation's ISSB standards (IFRS S1 and IFRS S2), SEBI's BRSR and BRSR Core format for Indian listed entities, the GHG Protocol Corporate Standard for emissions accounting, and NGFS climate scenario pathways for scenario analysis. For UAE group entities, we factor in the UAE's National Climate Change Plan and 2050 Net Zero Strategy context alongside relevant free-zone sustainability expectations.

Yes. CDP (formerly the Carbon Disclosure Project) questionnaires are increasingly used by institutional investors and larger corporate customers to assess supplier and portfolio-company climate performance. We help structure a credible response grounded in your actual risk assessment and emissions data, rather than a response that overstates maturity your organisation does not yet have — which tends to be discovered in subsequent years' comparisons or investor follow-up.

Yes. PNPC has operating offices in Chennai, Bangalore, Hyderabad, and Dubai. For groups with an India-UAE footprint, we assess both sides under one coherent engagement — India-side BRSR/regulatory context and physical hazard mapping, and UAE-side considerations including desalination-dependent water sourcing, the UAE's National Climate Change Plan and 2050 Net Zero Strategy, and relevant free-zone or ADGM/DIFC sustainable finance expectations — rather than treating them as two disconnected local exercises.

Greenwashing refers to disclosure or marketing claims about environmental or climate performance that are not adequately supported by underlying evidence, data, or governance — ranging from overstated sustainability claims to disclosures that are inconsistent with actual internal risk assessments. Regulators, stock exchanges, and increasingly courts globally are scrutinising this more closely. Our review's core discipline — building disclosure directly from an evidenced risk assessment and governance structure, rather than the other way round — is specifically designed to produce disclosure that can withstand scrutiny.

Yes, though the urgency and framing differ. Even without investor pressure, physical climate risk is a genuine operational and insurance risk — facility disruption from extreme weather affects any business regardless of ownership structure. Transition risk from carbon pricing or shifting customer preference is similarly indifferent to whether you have external investors. The review is simply framed more around operational resilience and cost management than disclosure and investor relations for closely-held companies without near-term capital-raising plans.

TCFD's first pillar is governance specifically because oversight structure matters as much as the underlying risk data. Larger or more exposed companies often establish a dedicated ESG or sustainability committee, or explicitly extend the audit or risk committee's mandate to cover climate risk. Smaller companies may adequately address this at full board level without a separate committee, provided oversight is genuinely documented — regular agenda time, defined reporting cadence, and recorded board discussion — rather than informally assumed.

We report it factually and flag it as a priority finding immediately rather than holding it for the final report. Depending on severity, this typically triggers a conversation about adaptation investment (flood defences, alternative water sourcing, backup power), insurance coverage adequacy, or in some cases a longer-term strategic question about the facility's location. We are not engineers or insurance brokers, and coordinate with specialist technical or insurance partners where the finding warrants deeper, specialist assessment.

Fees depend on the number of facilities and their geographic spread, whether a first-time GHG inventory needs to be built, the applicable disclosure framework (BRSR Core assurance carries its own defined scope and cost), and whether UAE operations are in scope. PNPC provides a written scope and fee proposal after the initial scoping conversation, before any chargeable work begins.

Yes, in many cases. Lenders offering green loans or sustainability-linked loans increasingly require evidence of a credible sustainability risk framework and, for sustainability-linked structures, defined and monitored ESG-linked performance metrics as a condition of preferential pricing. A recent, well-documented climate risk review with defined metrics and targets can support this application, though the specific format and metrics a particular lender requires should be confirmed with them directly.

Ideally a board member (audit committee chair, risk committee chair, or a dedicated ESG committee chair where one exists), with the CFO, company secretary, or head of sustainability as the operational coordinator. Anchoring the review at board level — rather than solely within an operational sustainability function — preserves the governance credibility that TCFD and ISSB both expect to see evidenced, and ensures findings translate into actual capital allocation decisions rather than staying at operational level.

An internal audit of environmental compliance typically checks adherence to existing environmental regulations, licences, and consents — a backward-looking, compliance-focused exercise. A Sustainability & Climate Risk Review is forward-looking and strategic — it assesses exposure to future climate scenarios, transition dynamics, and evolving disclosure expectations, alongside (but distinct from) current regulatory compliance status. Many clients benefit from both, run as complementary rather than overlapping exercises.

A stranded asset is one that suffers unanticipated or premature write-downs, devaluation, or conversion to a liability because of shifts associated with the transition to a lower-carbon economy — for example, fossil-fuel-dependent equipment that becomes commercially unviable as cleaner alternatives fall in cost, or a facility whose primary customer base shifts away from a carbon-intensive product line. It is most directly relevant to energy, heavy industry, and carbon-intensive manufacturing, but the underlying logic (capital committed to an asset whose economic life may be shortened by transition dynamics) is worth assessing for any business with long-lived, carbon-intensive fixed assets.

Yes, where material. Water stress — whether from reduced rainfall reliability, groundwater depletion, or (for UAE facilities) desalination dependency — is treated as a distinct chronic physical risk category, particularly relevant for water-intensive manufacturing, agriculture-linked businesses, and any facility in a water-stressed region as identified by publicly available water risk indices.

Most clients settle into an annual refresh aligned with their board's ESG or risk governance calendar and their disclosure filing cycle (BRSR or equivalent), supplemented by event-triggered mini-reviews whenever there is a material change — a new facility, a new export market, an actual weather-related disruption, or a significant change in transition policy such as evolving CBAM rules.

We can support the initial framing and governance structure for target-setting — establishing a credible baseline emissions year, identifying realistic near-term reduction levers, and structuring how targets will be governed and tracked. Formal validation against the Science Based Targets initiative (SBTi) methodology, where a client wants that specific external validation, is coordinated with SBTi's own process, which sits outside PNPC's direct assurance role but which we help clients prepare for.

Limited assurance involves the assurance provider performing procedures designed to reduce risk to a moderate level, resulting in a negative-form conclusion (nothing has come to our attention to indicate the information is materially misstated). Reasonable assurance involves more extensive procedures, comparable in rigour to a financial statement audit, resulting in a positive-form opinion. SEBI's BRSR Core framework itself mandates reasonable assurance across its phased glide path (top 150 listed entities from FY 2023-24, extending to the top 1,000 by FY 2026-27) — there is no lighter limited-assurance tier within BRSR Core itself. Limited assurance applies to a separate, related requirement: ESG disclosures for a listed entity's value chain, which SEBI has since moved from a comply-or-explain basis to a fully voluntary basis.

Yes, for several practical reasons even without a direct statutory trigger — supply-chain ESG requirements from larger corporate customers (who themselves face BRSR value-chain expectations), private equity investors applying ESG screening even at growth-stage investment, lender interest in sustainability-linked facilities, and straightforward operational resilience against physical climate risk that applies regardless of listing status. Many of our unlisted mid-market clients commission this review specifically because a larger customer or a PE investor has started asking questions they could not yet answer credibly.

Where PNPC is the incumbent CA firm for a client's other compliance work, we are transparent about that relationship in the engagement scope. Where genuine independence is required — particularly for any formal BRSR Core assurance engagement, which carries its own independence standards analogous to statutory audit independence — we structure the assurance team separately from the team handling the client's other advisory work, consistent with how we manage independence across our broader assurance practice.

In our experience, it is the absence of a documented governance structure — climate and sustainability risk is often being managed informally by one or two engaged individuals (frequently in the sustainability, HR, or CSR function) with no formal board-level oversight, no defined reporting cadence, and no linkage to capital allocation decisions. The underlying risk data, once gathered, is often more available than expected; the governance wrapper around it is usually the weaker link.