Industry sector: Consulting

Deloitte & Touche LLP white paper provides guidance for managing climate change risks on an enterprise-wide basis

HOUSTON, TX, Oct. 8, 2007 – Mitigating risks associated with climate change has been heavily publicized in recent years, and it is incumbent upon every energy industry executive to address the challenges head on. Less appreciated, however, are the business opportunities presented by global warming, and only the savviest energy leaders will exploit these opportunities to realize an advantage for their companies, according to a new white paper from Deloitte & Touche LLP.

The Risk Intelligent Energy Company: Weathering the Storm of Climate Change, the seventh installment in Deloitte & Touche’s series on Risk Intelligence, recommends a “Risk Intelligent” approach to Enterprise Risk Management (ERM) as the most effective method in addressing a threat that may test even the most risk-aware organizations.

“The energy industry has always dealt with risk,” said Pat Concessi, Global Climate Change and Sustainable Resources Leader, Deloitte & Touche LLP (Canada), and co-author of the study. “In cases where the risks are isolated to a specific business unit and risk type, traditional risk management approaches have been used with good success. However, when the scope, complexity, and interdependency of risk factors increase, as with global warming, or when an emerging risk simultaneously presents significant opportunities, more comprehensive and integrated approaches are necessary.”

Deloitte & Touche LLP’s white paper points out that a given risk factor which may pose a threat for one company may instead be an opportunity for another company that has a different business strategy, location, or asset mix.

“Before companies can evaluate the magnitude of their risks and returns on their capital investments, they must first be able to quantify their risks,” said Patchin Curtis, director, Deloitte & Touche LLP, and co-author. “Great strides are being made in quantification techniques that can be fruitfully applied to the spectrum of risks resulting from climate change. Companies are now in a position to understand the amount of risk they face across their value chain.”

“Deloitte & Touche’s Risk Intelligent approach to ERM elevates the management of enterprise risks to a senior level, which is appropriate when dealing with risk factors as far reaching in their impact as those related to climate change,” Concessi adds. “We highly recommend all potential climate change risks should be addressed as the result of long-term planning by senior management. Senior management is positioned as a high-level champion who can provide a cross business unit perspective.”

The Risk Intelligent Energy Company: Weathering the Storm of Climate Change is available at no charge from Deloitte & Touche LLP. Pat Concessi and Patchin Curtis are available for interviews and briefings. Please contact Jerry Bennett, Senior Manager, Public Relations, Energy and Resources, Deloitte Services LP at 214-840-7035.