10 minute read 18 Apr 2023
Hero hive at five

How we’re driving commitment, collaboration and action on climate

By EY Global

Ernst & Young Global Ltd.

10 minute read 18 Apr 2023

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The EY Global TCFD report discloses our climate risks and opportunities, impact on strategy, and progress toward our carbon ambition.

In brief
  • Preparing the EY TCFD assessment involved substantive quantitative scenario modeling by EY teams and in-depth input from EY business leaders across the world.
  • The process deepened our engagement with the TCFD themes, highlighting where we can be proud of our climate progress and where we need focus to move faster.
  • One of our key opportunities is to catalyze climate action in collaboration with EY clients, global peers, people and our shared communities.

The EY Global Taskforce on Climate-Related Financial Disclosures (TCFD) report deepens dimensions of the perspectives shared in Value Realized 2022, our annual report on the impact we have on our stakeholders – EY people, clients and society – and our progress toward achieving our NextWave strategy and ambition of creating long-term value as the world’s most trusted, distinctive professional services organization.

This report focuses on the climate risks to our people and business, the opportunity to help EY clients decarbonize, and how we are accomplishing our Carbon Ambition of becoming net zero in 2025. Our perspectives address the four climate disclosure themes recommended by the TCFD — governance, strategy, risk management, and metrics and targets.

Download the EY Global TCFD Report here (pdf).

What is TCFD?

The Financial Stability Board created the industry-led TCFD in 2015 to establish recommendations for consistent “disclosures that will help financial market participants understand their climate risks.” In 2017, the TCFD issued recommendations to address gaps in the information disclosed on the financial impact of climate risk across the investment chain. Since then, companies around the world have increasingly embraced these recommendations.

EY2 recognized the importance of the TCFD recommendations to achieving this market transparency by becoming a supporter in the year of their publication. EY is proud to have the EY Oceania Chief Sustainability Officer, Mat Nelson, as a member of the TCFD Task Force.

The TCFD recommendations are structured around four themes that reflect core elements of how organizations operate:

  • Governance
  • Strategy
  • Risk Management
  • Metrics and Targets

TCFD guidelines encourage companies to use climate scenario analysis to investigate and disclose three categories of climate-related information: physical risks, transition risks and opportunities.

TCFD taxonomy for climate-related risks and opportunities3

Taskforce on Climate Taxonomy Circle Diagram
  • Image description

    This image presents the TCFD reporting themes as four nested circles containing descriptions of the themes. The largest circle represents the governance theme, which encompasses three progressively smaller circles representing strategy, risk management, and metrics and targets.

EY TCFD assessment: summary of key findings

The process of preparing the research and analysis for the TCFD report provokes self-reflection. Taking stock of our climate governance, considering our climate strategy and risk, and tracking progress against our emissions goals highlight both the achievements for which we can be justifiably proud and where we need to focus our efforts to move faster.

This section provides a summary of the key findings of the EY TCFD assessment:

Photographic portrait of Carmine di Sibio

“It’s clear that one of our biggest opportunities for activating our purpose and strategy is to be a catalyst for climate action, working with EY clients, peers, people and the communities we share.”

Carmine di Sibio, EY Global Chairman and CEO

Where we are today

In the TCFD assessment, we identified the following set of priority material climate-related risks and opportunities, which our teams modeled in two scenarios – a low carbon economy (LCE) and business as usual (BAU) – for multiple future time horizons.

The scenarios aligned with IPCC AR6 Shared Socio-Economic Pathways (SSPs) to understand the range of potential financial impacts and how various socio-economic factors will influence risks and opportunities in the future:

  • LCE: Lower emissions scenario (SSP1-RCP2.6) anticipating less than 2°C of global warming by 2100
  • BAU: High-emissions scenario (SSP5-RCP8.5) anticipating 4-5°C global warming by 2100
Reputation risk

Our reputation as a leader on climate action is a key market differentiator and a key factor influencing revenue growth. In either the LCE or BAU scenario, EY could experience significant advantages or disadvantages with talent retention, as well as significant revenue gains or losses, depending on the maintenance or loss of its market-leading climate reputation.

Sustainability services opportunity

We expect demand for EY sustainability-related services to grow rapidly in both the BAU and LCE scenarios, as the world adapts to climate change and mitigates climate risk.

Served emissions

EY teams serve clients in every sector and every geography, including many of the largest organizations. Client climate risks therefore become our own. These risks are concentrated in six key sectors, based on our calculation of their weighted average carbon intensity and their proportion to our overall revenues.

Market demand risk

EY clients in many sectors face substantial transition risks, which could significantly affect their demand for a range of EY services. This presents a cross-cutting risk: If EY clients in carbon-intensive sectors fail to decarbonize quickly enough for evolving public opinion, EY could face reputational risks. On the other hand, existing business relationships with carbon-intensive players could mean significant opportunities to aid and accelerate the transformation of these clients and sectors.

  • Image description

    This visual presents three charts indicating different transition risks to EY under the BAU and LCE scenarios defined above. "Revenue risk from reputation decline" indicates the risk to revenues from going from a market-leading sustainability reputation to an average one. "Sustainability services opportunity" indicates the upside risk of increased demand for non-audit sustainability services. "Market transition risk" indicates the risk of factors that could negatively affect demand for EY services based on projected decarbonization in key sectors.

Acute and chronic physical risks

As one of world’s leading and largest professional services organizations, with offices in nearly every country, our physical climate risks are broadly reflective of the distribution of anticipated climate impacts globally.

  • Image description

    These charts indicate the overall risk scores for different climate physical hazards to EY offices in three global regions: Americas; Europe, the Middle East, India and Africa (EMEIA); and Asia Pacific. The “separate” view presents the charts for the three regions side-by-side. The “combined” view overlays the scores for the three regions in a single chart.

  • Image description

    This visual presents a series of three views of the climate risks to the largest 200 EY offices globally by headcount. The first view is cluster of circles representing each office, sized according to office headcount. The second view colors each sized circle according to that office’s overall climate physical risk score, where darker blue indicates higher risk. The third view divides the sized circles indicating individual office climate risks into three global regions - Americas, EMEIA and Asia Pacific – and indicates their overall climate physical risk and their risk for different climate hazards.

Photographic portrait of Steve Varley

“Collaboration is the lifeblood of real progress on mitigating climate risk and achieving the ambition set out in the TCFD. EY has both the responsibility and insights to support accelerating action, whether through engagements at the employee, community, national or international levels.”

Steve Varley, EY Global Vice Chair – Sustainability

What we're doing well

Progressing the seven actions of our Carbon Ambition

Achievement of our Carbon Ambition is being driven by measurable actions in seven key areas. These targets focus on the most important dimensions of EY activities ranging from business travel to electricity sourcing, offsets and removals, and suppliers. We reached the major milestone of becoming carbon negative globally in our 2021 fiscal year and are making the needed investments to achieve our targets in all seven areas.

  • EY Carbon Ambition

    EY launched our Carbon Ambition in January 2021: to reach net zero in 2025 with a 40% reduction in our absolute GHG emissions across Scopes 1, 2 and 3 emissions (against an FY19 baseline). This is consistent with a 1.5°C reduction pathway approved by SBTi1. This target aligns with what climate science deems necessary to meet the goals of the Paris Agreement to limit global warming to 1.5°C degrees.

    We reached the major milestone of becoming carbon negative globally in FY21. To achieve our ambition of becoming net zero in 2025, we will continue to deliver on our seven-point plan to reduce our greenhouse gas emissions in line with our Science Based Targets initiative (SBTi)-validated 1.5°C degree pathway.

    Seven actions are driving fulfillment of this ambition:

    1. Business travel emissions: achieve a 35% reduction by FY25 (against our FY19 baseline)
    2. Energy: reduce overall office electricity use and procure 100% renewable energy for our remaining needs
    3. Contracts: structure electricity supply contracts through virtual power purchase agreements (vPPAs), to add more renewable electricity than EY consumes to national grids
    4. Measurement: enable EY teams to calculate and reduce the amount of carbon emitted during client work
    5. Nature- and science-based projects that remove or offset more carbon than we emit, every year
    6. Suppliers: require 75% of EY suppliers, by spend, to set science-based targets no later than FY25
    7. Clients: invest in services and solutions that help clients create value from decarbonizing their businesses and provide solutions to other sustainability challenges and opportunities
Educating and upskilling

We are equipping EY people with the knowledge and skills needed to understand and respond to both EY climate risks and opportunities and those of EY clients. Our initiatives draw on a variety of strategies, including offering a formal sustainability MBA, engaging EY people in supporting climate positive entrepreneurship, and facilitating employee-led internal sustainability networks.

Bolstering our climate risk assessment

Our Climate Change and Sustainability sub-service line worked together with our Quantitative Economics and Statistics group to develop robust modeling to provide the basis for this TCFD report. This market-leading analysis provides us with valuable new insights into our physical and financial climate risks, which we are sharing with stakeholders and incorporating into our strategy. It also provides the foundation for deeper and more comprehensive analysis in future reporting.

Acting as a catalyst for sector transformation

Our cross-service line teams are supporting clients in every sector to achieve their own carbon ambitions and transform their businesses to thrive in a low-carbon economy. Working with a broad ecosystems of alliance partners, our teams are helping clients reframe their strategies, accelerate their net-zero transitions, govern and operate more effectively, and build stakeholder trust.

Positioning our sustainability practice for growth

We are investing in the talent and capabilities needed to pursue the sustainability-related service opportunities presented in both the BAU and LCE scenarios in coming years. Our investments include upskilling and headcount, building and acquiring new capabilities, and building an extensive ecosystem of business partners who can help us deliver leading sustainability services to our clients.

Where we need to focus


Compensation at EY is not currently directly linked to the achievement of our climate goals. We could increase global and regional climate accountability by directly linking compensation to progress on specific metrics related to our Carbon Ambition and the seven supporting actions we have defined, particularly for senior global executives.


While climate objectives are a core part of our overall corporate strategy, and we track our progress against our climate ambition, we need to incorporate sustainability metrics into strategy processes across all functions more consistently. Increasing comprehensive sustainability metrics monitoring would allow for more strategic decision-making. The market transition and reputation risks, and the potential sustainability services upside, underscores the continuing need to prioritize key recruitment activities across climate change and sustainability expertise.


This analysis highlighted the breadth of potential risks to EY people, office operations and markets globally, underscoring the need to continue to develop and deploy organization-wide and regional tools, checklists, and training scenarios for climate change-related natural disasters as such events become more frequent and severe. Risk will continue to build out Key Risk Indicators for ESG and climate change-related risks as part of the broader enterprise risk management (ERM) process.

Photographic portrait of Amy Brachio

“We are upskilling to translate a vital range of institutional and industry knowledge into sustainability relevant skills. Our EY Masters in Sustainability is a great resource, working alongside existing roles and experiences, and is the first of its kind.”

Amy Brachio, EY Global Deputy Vice Chair – Sustainability

Looking ahead

We come away from this TCFD assessment more deeply engaged with each pillar – governance, strategy, risk management, and metrics and targets – and a renewed commitment to achieving our carbon ambition of becoming net zero by 2025.

The process of developing the point of view and analysis shared in this TCFD report engaged over 50 EY leaders and professionals, representing all our service lines, geographies and key business functions. The interviews, workshops and quantitative analysis which informed this assessment strengthened existing organizational relationships around climate and created valuable new ones. As a result, we look forward to operationalizing our climate targets over the next year with enhanced agility and effectiveness.

We also look forward to building on the foundational risk analysis and scenario modeling presented in the assessment. This will help us both to deepen our reporting for TCFD and lay the groundwork for an eventual Taskforce on Nature-related Financial Disclosures assessment, as we bring an increased focus on biodiversity.

  • Report contributors

    • Elise Saur and Jessica Cunningham – Global Corporate Responsibility, Responsible Business
    • Jennifer Leitsch, Rico Salas, Rodrigo Leal, Meredith Outterson and Jasmine Olivera – Climate Change and Sustainability Services
    • Brandon Pizzola and Aman Rai – Quantitative Economics and Statistics
    • John de Yonge and Sampada Mittal – EY Research Institute
    • Charles Council – Creative Services Group

    The process of developing the point of view and analysis shared in this TCFD report engaged over 50 EY leaders and professionals, representing all our service lines, geographies and key business functions.

  • Show article references#Hide article references

    1. Photo of bee boxes by August Stubler.
    2. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
    3. Final Report: Recommendations of the TCFD on Climate-related Financial Disclosures," TCFD website (pdf), accessed 10 June 2019.


The 2022 EY TCFD report highlights our progress toward achieving our Carbon Ambition of becoming net zero in 2025, our steps to integrate climate considerations into global strategy, and our initiatives to upskill our people to respond to climate risks and opportunities – both our own and those of EY clients. The report also identifies where we should focus to make progress faster, providing the framework for action over the coming year. We come away from TCFD assessment process with a redoubled commitment to leveraging our global scale and relationships to catalyze climate action.

About this article

By EY Global

Ernst & Young Global Ltd.