Disclosure focus
The practical emphasis is on coverage across the parts of the business that matter most to the assessment, rather than only highlighting a few flagship sites or isolated examples. An organisation should consider the areas, assets, operations and time horizons that drive the financial effect, and explain the basis for any estimates, assumptions and uncertainties used. The aim is to give users a clear view of where climate could change the organisation’s financial position or performance, and how broad that assessment is across the group or value chain where relevant.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official European Commission source.
Prepare
What to collect before drafting
Tick each field as the evidence lands. Owners are the teams that usually hold the source files.
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Assets exposed to physical climate risk
Finance with Risk and Asset ManagementThe carrying value of assets that sit in locations where physical climate hazards are judged material for the reporting period.
Evidence Asset register, location mapping, climate risk assessment, finance close pack.
Watch for Does not reconcile to the fixed asset register because site locations were not mapped to the climate risk assessment.
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Revenue exposed to physical climate risk
Finance with Commercial/OperationsThe net revenue linked to operations or customers associated with locations where physical climate hazards are judged material for the period.
Evidence Management accounts, segment or site revenue analysis, climate risk mapping.
Watch for Revenue is taken from the wrong scope because site-level sales were not aligned to the physical risk boundary.
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Physical risk action coverage
Risk with Operations and Asset ManagementThe number or proportion of relevant assets, sites or activities covered by actions intended to reduce physical climate risk.
Evidence Adaptation plan, project tracker, asset/site list, risk treatment register.
Watch for Coverage is overstated because the action list was not matched to the full population of exposed assets or sites.
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Locations of exposed assets
Asset Management with RiskA plain-language list of where the assets judged materially exposed to physical climate risk are located.
Evidence Asset register, property schedule, site portfolio map, risk assessment output.
Watch for Locations are incomplete because leased, remote or small sites were omitted from the source asset list.
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Assets exposed to transition risk
Finance with Risk and StrategyThe carrying value of assets that are materially exposed to climate transition risk for the reporting period.
Evidence Asset register, transition risk assessment, impairment or strategy review, finance close pack.
Watch for Does not reconcile to the asset register because transition exposure was assessed using a different asset population or cut-off date.
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Revenue exposed to transition risk
Finance with Commercial/StrategyThe net revenue linked to products, services or activities materially exposed to climate transition risk during the period.
Evidence Management accounts, product or activity revenue split, transition risk assessment.
Watch for Revenue is misclassified because the transition-risk definition was applied to products differently from the revenue reporting split.
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Transition action coverage
Risk with Strategy and OperationsThe number or proportion of relevant assets, activities or revenue streams covered by actions intended to reduce transition risk.
Evidence Transition plan, project tracker, portfolio or product list, risk treatment register.
Watch for Coverage is overstated because the mitigation actions were counted without reconciling them to the full transition-risk population.
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Collateral energy classes
Credit Risk with Real Estate/ValuationsA breakdown of real estate collateral by energy efficiency class, using the organisation's chosen class labels and the relevant property population.
Evidence Valuation files, loan security schedule, EPC or equivalent property records, collateral register.
Watch for The class split is wrong because property records and collateral records use different energy-efficiency categories or the same building is counted twice.
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Potential climate liabilities
Finance with Legal and RiskThe estimated monetary amount of possible liabilities linked to climate transition matters that the organisation has identified.
Evidence Legal review, provisions or contingent liability papers, scenario analysis, risk register.
Watch for The amount is understated because contingent items were left out or the estimate was prepared for a different reporting date.
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Financial effects method
Finance with Risk/StrategyA clear description of how the financial effects were estimated, including the approach, data sources, calculation steps and any modelling used.
Evidence Methodology paper, working papers, model documentation, finance review notes.
Watch for The method cannot be reproduced because the calculation steps do not tie back to the source data or model version used.
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Key assumptions and limits
Finance with Risk and Model OwnersThe main assumptions, simplifications and known limits that affect the financial effect estimates.
Evidence Assumptions log, model governance papers, sensitivity analysis, review sign-off.
Watch for The estimate is misleading because a major assumption or limitation was not disclosed and the result was read as more precise than it is.
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Climate opportunity assets
Finance with Strategy and Asset ManagementThe carrying value of assets that are directly linked to climate-related opportunities identified by the organisation.
Evidence Asset register, opportunity assessment, investment case files, finance close pack.
Watch for Does not reconcile to the asset register because opportunity assets were selected using a different business-case definition than the one used in finance.
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Climate opportunity revenue
Finance with Commercial/StrategyThe revenue generated from products, services or activities that are directly linked to climate-related opportunities.
Evidence Management accounts, product or service revenue analysis, opportunity assessment.
Watch for Revenue is overstated because the opportunity label was applied to the whole product line instead of only the qualifying revenue stream.
Before you start
- Have you already fixed which parts of the business, assets and income streams sit inside the climate-risk scope for this exercise?
- For each figure, have you settled the time basis and measurement approach you will use so the numbers are built on the same footing throughout?
- Can every amount and location you plan to show be traced back to a source record or working paper you can explain?
- Have you agreed which internal definitions you are using for physical exposure, transition exposure and opportunity-related business, so the team applies them consistently?
- Before you draft the narrative, have you decided what assumptions, shortcuts and limits need to be stated so the figures are not read as more precise than they are?
How to prepare it
Request the data
Request the climate risk and opportunity financials from Finance
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
What amounts, locations, methods and assumptions do we need to support the expected financial impact of climate-related physical risks, transition risks and climate opportunities in our reporting period?
Use your own finance and risk terms first, then map them to the reporting categories. Ask for the figures and supporting notes in the way your team already tracks exposures, sites, revenue lines, assets and scenario work; do not start from the framework labels unless that is how your organisation already works.
Weak request
Please provide the ESRS E1:E1-11 data for material physical and transition risks and climate opportunities, including all financial effects, methodology, assumptions and location information.
Why it fails: It uses framework language first, which makes it harder for the owner to recognise the data in their own records. It also bundles several different asks without saying which internal files, categories or basis should be used, so the response is likely to be incomplete or inconsistent.
Better request
Please send the latest finance pack for climate-related exposures and opportunities for [period]. I need the amounts for assets, revenue and any liabilities your team tracks, plus the site or portfolio location, the source file, the currency basis, the method used, and any assumptions or gaps. Please use your team’s own labels first, then we can map them to the reporting categories.
Formal email template
Subject: Request for climate risk and opportunity financial data for [reporting period]\n\nHi [name],\n\nI am pulling together the climate-related financial evidence for [reporting period]. Could you please share the latest figures and supporting notes for the items your team tracks that relate to: \n- assets and revenue exposed to weather or other physical impacts;\n- assets, revenue and any liabilities exposed to policy, market or technology change;\n- any assets or revenue linked to climate-related growth or efficiency opportunities; and\n- the method, assumptions and limitations used to estimate those amounts.\n\nPlease include the source file or system, the reporting boundary, the currency basis, the location detail, and any comments on coverage or gaps. If you already have a summary table, that would be ideal.\n\nPlease adapt this to your organisation’s own terminology and check the official source before sign-off.\n\nMany thanks,\n[Your name]
Short Teams / Slack version
Hi [name] — could you send over the latest climate risk/opportunity financial pack for [period]? I need the amounts, locations, method, assumptions and any coverage notes for the assets, revenue and liabilities your team tracks. Please include the source file/system and boundary. Adapt this to your team’s own terms and check the official source before sign-off. Thanks.
Industry examples
Manufacturing
Context. A group with factories, warehouses and product lines exposed to flood, heat and energy-price change.
Adapted request. Please share the latest plant and product-line pack for [period]. I need the values for sites and revenue lines affected by flood, heat, supply disruption, energy policy change and any efficiency or low-carbon product opportunities, plus the method, assumptions, site list and source workbook.
Example response. Prepared table with factory names, country, exposed asset values, exposed revenue by product line, opportunity revenue from efficient products, method note, assumptions, and a separate note on which sites are covered by adaptation or upgrade plans.
Real estate / property investment
Context. A portfolio team tracking buildings, rental income, retrofit plans and any energy-efficiency-linked collateral information.
Adapted request. Please send the latest portfolio pack for [period]. I need the building values, rental income, any transition-related liabilities, the energy-efficiency class of collateral where relevant, and the assumptions used to estimate the figures, with the source schedule and portfolio boundary.
Example response. Table listing property ID, region, carrying value, rental income, transition exposure, collateral efficiency class, retrofit coverage, methodology, and notes on valuation basis and exclusions.
Draft your disclosure
Notes that turn data into a disclosure
LRA training templates — adapt them to your organisation, and check the official source before sign-off.
Method note
Explain how the amounts were identified, measured and grouped, including the basis used for the financial effects, the main assumptions applied, and the key limits or uncertainties that affect the figures.
Context note
Set out what the numbers mean for the business by linking the exposed assets, revenue and collateral to the organisation’s climate-related risk and opportunity profile, and by clarifying whether the figures are absolute amounts, shares, or both.
Fluctuation statement
If the figures moved materially, describe the main drivers in plain terms, such as changes in asset coverage, site mix, revenue mix, mitigation progress, valuation updates, or revised assumptions used in the calculation.
Content index entry
E1-11 Anticipated financial effects from material physical and transition risks and potential climate-related opportunities — [location / page] / [notes]Download Centre
Preparation tools & forms
Download preparation tools for E1-11 with free verified email access for 24 hours. Source-report links remain public.
Check
For each claim, check the evidence
We used the same calculation rules and presentation approach across the amounts and percentages in the coverage figure, so the figures are comparable and not built on mixed methods.
Risk The assurer will test whether different parts of the table were prepared on different bases, whether percentages were derived consistently, and whether any presentation choice could mislead users about comparability.
Evidence to check Working papers showing the calculation method, mapping of source data to reported figures, spreadsheet formulas, review notes on presentation choices, and sign-off confirming one consistent basis was applied throughout.
We split the loan-security balance by energy performance band using the information we could obtain, and where a band could not be populated from source records we prepared an internal estimate for the missing total.
Risk The assurer will probe whether the split is complete, whether the estimate for missing information is supportable, and whether the reported total could be overstated or understated because of gaps in the underlying records.
Evidence to check Collateral register, energy-rating source files, reconciliation of the split to the total balance, methodology for any internal estimate, assumptions log, and evidence of management review over missing-data treatment.
We set out how we quantified the expected financial impact from the identified climate exposures, including which parts of the business were in scope and how our risk assessment process fed into the numbers.
Risk The assurer will check whether the quantification method is clear, whether the scope matches the stated exposure set, and whether the risk process actually drove the estimate rather than being added after the fact.
Evidence to check Methodology paper, risk assessment outputs, scope memo, model inputs and outputs, links between risk registers and the reported amounts, and approval evidence from the preparers and reviewers.
We documented the key judgements behind the estimate, including the main assumptions, input settings and known constraints that could move the result.
Risk The assurer will look for hidden assumptions, unsupported parameter choices, and limitations that were not disclosed or were not considered in the estimate.
Evidence to check Assumptions register, parameter sheets, sensitivity or scenario analysis, limitation notes, version history, and evidence that the key judgements were reviewed and challenged before publication.
We included grouped site locations for assets exposed to significant physical hazards so the reported picture reflects where the exposure sits without exposing unnecessary detail.
Risk The assurer will test whether the location grouping is sufficiently specific to support the reported exposure, whether any sites were omitted, and whether the aggregation masks material concentrations of risk.
Evidence to check Asset location schedule, mapping or geospatial support, aggregation logic, completeness checks against the asset base, and review evidence showing the grouped locations were validated before release.
Where the financial statements already mention a possible climate-related liability, we linked the disclosure back to the relevant note or line item so users can trace it easily.
Risk The assurer will check whether the cross-reference is accurate, whether the referenced financial statement item really relates to the same matter, and whether the linkage is clear enough for users to follow.
Evidence to check Financial statement cross-reference table, draft and final note references, tie-out to the relevant accounting disclosure, and review sign-off confirming the linkage is correct.
Evidence pack to prepare
Common reporting gaps
- Figures are stated without the supporting narrative, or narrative without figures.
- Scope is inconsistent between the text and the numbers.
- The reporting boundary is left undefined.
- Material changes since the previous period are not disclosed.
- Estimates and measured values are not distinguished.
- Source records for the figures are not identified.
Where drafts go wrong
Mistakes to avoid and where judgement is needed
The left column is what preparers get wrong while collecting; the right column is where you will have to make and explain a judgement.
Mistakes to avoid
- Wrong owner, wrong languageThe request goes to a finance or risk contact using framework terms instead of the team that actually holds the figures, so the reply comes back in the wrong business language and cannot be mapped cleanly.
- Boundary left undefinedPeople start collecting numbers before agreeing which entities, sites, contracts, or portfolios sit inside the scope, so different teams report different populations.
- Period basis not fixedOne team pulls a year-end balance while another uses an average or a different cut-off date, so the figures cannot be compared on the same timing basis.
- Mixed counting basisAmounts from gross, net, and partially adjusted views are blended together, which makes the final dataset internally inconsistent.
- Source labels stripped outThe original file names, account codes, site IDs, or system tags are lost during consolidation, so the team cannot trace each figure back to its source.
- Separate populations mergedPhysical-risk items, transition-risk items, and opportunity items are rolled into one extract even though they need to stay distinct for later reporting.
- Evidence details not capturedThe team saves the number but not the supporting note, extract date, version, or owner, so the figure cannot be checked later.
- No review trailDraft values move through email and spreadsheets without a clear sign-off record, so nobody can show who checked the data or when it was approved.
Judgement needed
- Group perimeter after a deal closes or a business is soldUse the same cut-off date and group boundary as the rest of the report, then explain any bought-in or sold-out operations that change the asset, turnover or opportunity figures.
- Different country labels for the same risk or asset classMap local descriptions into one internal grouping rule, and disclose the mapping where a site, loan book or revenue stream is named differently across jurisdictions.
- Borderline items that sit partly inside and partly outside the risk setSet a clear inclusion rule for mixed-use sites, shared facilities or partially exposed portfolios, and state how you treated the edge cases so the totals can be followed.
- Choosing the measurement date for forward-looking amountsAnchor the numbers to one reporting date or period basis, explain if you used year-end, average-period or another cut-off, and keep the basis consistent across all related figures.
- Modelled estimates versus directly observed amountsIf a figure comes from a model, proxy or scenario rather than a direct record, say so, describe the main assumptions and limits, and separate it from any measured amount where that helps users understand it.
- Rounding and small differences across linked tablesApply one rounding rule across the disclosure set, and explain any minor mismatches between subtotals and totals so readers can see they are caused by rounding rather than missing data.
- Protecting sensitive site or customer information when listing locationsGroup or generalise location details where naming a site too precisely would expose confidential information, and explain the level of aggregation used and why it still gives a useful picture.
- Coverage percentages where the denominator is not straightforwardDefine the population behind each coverage figure, including any excluded assets, revenues or mitigation actions, and disclose the basis used so readers can judge how complete the coverage is.
- Real-estate security where energy grades are missing or mixedState the rule used for properties without a clear energy class or with mixed certificates, and explain whether they were left out, grouped separately or assigned by a documented proxy.
- Opportunity figures that overlap with risk figuresAvoid double counting by setting one rule for whether an asset or revenue line sits in the risk bucket, the opportunity bucket, or both, and explain that rule in the narrative.
Examples
How it reads on the page
Synthetic, written by LRA — not from a company report, not text from any standard.
We have mapped the parts of our operations and sales that sit in areas exposed to climate hazards, and we estimate that 18% of our property, plant and equipment and 12% of annual net sales are linked to those locations; 72% of the identified physical-risk sites already have adaptation measures in place. For slower-burn climate change risks, 27% of our assets and 19% of net sales are exposed, 61% of those sites are covered by response actions, and 14% of the mortgaged property we hold as security sits in lower-efficiency energy bands. We also estimate possible climate-related transition charges of 6 monetary units, using scenario-based cash-flow effects, asset write-downs and cost assumptions; the main limits are that the figures rely on current site data, modelled hazard paths and management estimates. On the upside, 9% of our asset base and 7% of revenue are tied to climate-related opportunities, mainly from efficiency upgrades and lower-carbon product lines.
This is a synthetic, practitioner-style example showing how a company might describe exposure, coverage of response actions, collateral quality, possible transition costs, the method used to estimate effects, key caveats, and the share of assets and revenue linked to climate opportunities.
We have reviewed our warehouse network, stores and related sales to identify where climate hazards could affect value: 11% of our assets and 8% of net revenue are in locations with material flood or heat exposure, and 55% of those sites are already covered by mitigation plans. Looking at the shift to a lower-carbon economy, 22% of assets and 16% of net revenue are exposed, 68% of those sites have transition-response actions in place, and 9% of the property we hold as loan security falls into weaker energy-performance bands. Based on scenario analysis, we estimate potential transition-related liabilities of 4 monetary units; the estimate uses site-level data, internal capex plans and management judgement, and it is constrained by incomplete supplier information and uncertainty over future policy timing. We also identify 13% of assets and 10% of revenue as connected to climate opportunities, mainly through electrified transport, energy-saving retrofits and low-emission service offerings.
This is a second synthetic example for a different sector, showing the same disclosure points with different figures and a different business profile.
Quality ladder
- Basic
I estimate €12 million of climate-linked financial exposure.
- Better
I estimate €12 million of climate-linked financial exposure, split between €7 million from weather-related asset risk, €3 million from policy-and-market shift risk, and €2 million from opportunity-linked assets, using our year-end balance sheet and sales data.
- Best
I estimate €12 million of climate-linked financial exposure across our owned assets and revenue streams, with €7 million tied to weather-related asset risk, €3 million to policy-and-market shift risk, and €2 million to opportunity-linked assets, measured at year-end from our balance sheet and sales records, and the increase from last year mainly reflects a wider set of sites included in the review.
Check your understanding
Scenarios to work through
A manufacturer has two sites in a flood-prone area. The finance team has estimated that one plant and part of the related sales base could be affected if severe weather becomes more frequent, and operations have already started some protective work.
A group owns a warehouse portfolio and a vehicle fleet. Management has concluded that some assets may lose value because of policy changes and market shifts linked to the move to a lower-carbon economy, while a separate set of assets is expected to benefit from demand for low-emission services.
A preparer has modelled future cash impacts from heat stress and carbon-pricing changes using internal scenarios, but the estimates rely on broad assumptions about timing, customer behaviour, and asset lives. The team is unsure how much detail to give about the method and its weaknesses.
A retailer has identified a new line of products and services that should benefit from climate-related demand, and the finance team has quantified the assets and sales linked to that opportunity. The team is tempted to present the upside only, because the downside exposures are still being refined.
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Advice, not assurance
Framework references
Relevant ESRS requirements and related disclosures
ESRS
E1-11
within ESRS E1: Climate Change
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FAQ
Questions this page answers
Start with the plain-language explainer, then work through the step-by-step ‘how to prepare’ section and the datapoints list. The page is designed to help you move from scoping and data collection to a draft output, rather than to act as an official source.
The page lists the datapoints to prepare, including assets and revenue exposed to physical and transition climate risk, the related action coverage, and the locations of exposed assets. It also points to collateral energy classes, potential climate liabilities, financial effects method, key assumptions and limits, and climate opportunity assets and revenue.
Use the page’s datapoint list and the synthetic illustrative example disclosures to check that each subset sits within the relevant total and that your scope is clear. The page also flags common reporting gaps and mistakes, which is useful for spotting inconsistent boundaries or incomplete coverage.
The page is set up for use by a sustainability or ESG manager, HR or data owner, and assurance reviewer, so ownership should sit with the people closest to the underlying data and controls. Use the step-by-step preparation section and the evidence pack to decide who gathers, checks, and signs off each input.
The page includes an evidence pack with five items specifically for assurance readiness. Use it alongside the six assurance claims to verify so you can show the claim, the risk it addresses, and the supporting evidence in a way an assurance reviewer can follow.
The page says there are six assurance claims to verify, each framed around claim, risk, and evidence. Use them as a checklist to test whether the disclosure is supported, complete, and ready for review before you draft the final wording.
The page lists common reporting gaps and mistakes, so it is meant to help you spot issues before you finalise the disclosure. A practical way to use it is to compare your draft against the datapoints, evidence pack, and illustrative example to catch missing scope, weak support, or unclear methodology.
Use the draft-output section, which includes visualisation ideas, narrative starters, and a content-index line. That gives you a practical route from raw data and evidence to a first draft that can then be checked against the page’s assurance and gap guidance.
The Download Centre includes a Prep & Assurance workbook in .xlsx format, which is intended to help you organise the preparation and assurance steps. Use it together with the printable Library Card PDF if you want a quick reference while collecting data or reviewing the draft.
The page includes synthetic illustrative example disclosures, including a quantitative data table. These are there to show how the disclosure can be structured in practice, not to provide a template you should copy without adapting to your own data and scope.
Yes. The page includes a ‘From company reports’ table that links to real published reports at the pages where the topic is disclosed, which can help you see how the subject is handled in practice.
More questions this page can help with