ADDRESSING CLIMATE RISK
We regularly evaluate both transitional and physical climate-related risks and opportunities through our Risk Management process and in our BCDR planning process . Our Sustainability Director reviews these annually with our Chief Risk Officer and the Chief Financial Officer .
Transitional risks include potential future regulatory changes restricting GHG emissions , which could increase compliance costs and impact capital spending by our clients , and the shift in fuel supplies away from fossil fuels , which could present a longerterm risk as it impacts our clients ’ capital spending and investments .
We feel we have the adaptive capacity through our existing management systems to regularly review potential market changes . While approximately 14 % of our business in FY20 was dedicated to the oil and gas sector and essentially all our clients currently depend on fossil fuels in their energy mix , we believe these risks are offset by our diversified portfolio of clients and services , especially the growth of the renewable energy market , energy efficiency and other green technology opportunities .
Physical risks to our business from climate change can include severe seasonal weather conditions , such as hurricanes , floods , snowstorms , or other inclement weather , which can cause reduced project activity , temporary closure of some of our offices and / or project sites ; potential adverse impacts to fieldwork safety and efficiency ; and / or property damage . Our goal is to keep our employees safe and minimize interruption to client services . We also periodically assess water stress , both current and longer term ( 2020 and 2030 ), including flood and drought risks for our office locations using the World Resources Institute ( WRI ) Aqueduct tool .
Because of the decentralized nature of our business operations , any given severe weather event , natural disaster , or other physical impact from climate change is not anticipated to have a substantive financial impact to our overall business ; however , we do anticipate increasing frequency and severity of events and are incorporating these risks into our business continuity plans accordingly . Again , given the flexibility and adaptive capacity of our business mix , such events could actually create the need for additional TRC services related to resiliency and disaster recovery .
COVID-19 provided a real opportunity to test our business continuity communications and response systems . Our Crisis Management Team met daily for three months with our Executive Team to assess , communicate , and mitigate health / safety and business continuity risks associated with the pandemic . The same response processes and procedures would be employed in the event of a natural disaster , although the impacts would be more localized . The development of WFH protocols and platforms has further mitigated this risk as our employees are capable of working seamlessly in a remote setting .
Climate Action Commitment
TRC recognizes climate change and its adverse effects as one of the most significant challenges of our time . Pursuing our vision of making the Earth a better place to live , TRC is committed to :
■ Working with our clients to tackle climate challenges related to mitigation , adaptation , and resiliency .
■ Measuring , reporting , and reducing the carbon footprint of our own operations and focusing on increased employee awareness .
■ Engaging our communities to raise awareness and advance education on the topic of climate change and other global megatrends .
32 2020 Sustainability Report