customer asks about climate risks, how do I determine those for my company

Physical and transition risks, listed separately

The answer consists of two parts: physical risks and transition risks, and the VSME basic module asks for both separately. Physical risks are the direct consequences of climate change on your locations and activities: flooding, heat, drought, storm damage. Transition risks are the consequences of the shift towards a low-carbon economy: more expensive emission allowances, new regulations, changing demand from customers who are themselves under pressure. A customer asking about climate risks usually wants to know whether you have considered both categories, not just whether your building is in a flood-prone area.

In practice, this is often the part where a file has nothing yet, because it is not a measurable value like emissions but an assessment. If you have not done this yet, "to be determined" is the right answer — not "no" and not a guessed assessment. What is already useful: if you have already mapped scope 1, 2 and 3 according to the GHG Protocol, this provides a starting point for transition risk, because high dependence on fossil fuels or transport usually means higher transition risk. See also the direct emissions of greenhouse gases and emissions in the value chain as building blocks for this. If you have already set a reduction target, this is also relevant for transition risk — see the objective for emission reductions.

Where this is located: VSME, basic module

The VSME basic module of EFRAG lists climate risk as part of the basic information that non-listed SME enterprises can report, separate from the quantitative emission figures from the GHG Protocol. The division into physical risk and transition risk is not an SME invention but the common distinction also used in broader climate reporting. For the scope division that serves as the basis for the transition risk assessment, see the explanation on scope 1, 2 and 3 together.