C4: Climate risks
The climate-related hazards and transition events that create risks for your company, and how you respond.
In brief
C4 asks about climate risks. If you have identified climate-related hazards or transition events that create risks for your company, you describe them. You explain how you assessed the exposure and sensitivity of your assets, activities and value chain, give the time horizons and say whether you have taken adaptation actions. You may also describe the potential effects on your finances or operations and rate them high, medium or low.
At a glance
- Requirement
- If applicable: when you have identified climate-related hazards or transition events that create risks. The financial effects are voluntary.
- 10 employees or less
- Voluntary.
- Value chain cap (from 2027)
- Not included.
- In Selko Report
- Page "Climate Risks"
What changed from VSME
- Changed: "gross" was removed from climate-related risks.
- New: voluntary for companies with 10 employees or less.
- Unchanged: the time horizons. Short term is one year, medium term two to five years, long term more than five years.
VS Standard Reference
The official text of the Voluntary Standard, Annex I to Commission Delegated Regulation (EU) 2026/1560.
Selko Insights
How Selko applies it
Physical risks and transition risks
Physical risks come from weather and climate: storms, floods, drought and heat can damage property, interrupt deliveries or hinder work. EFRAG's guidance separates acute events from chronic changes such as rising temperatures or reduced water availability. Transition risks come from how society responds to climate change: regulation, energy and emission prices, technology, customer requirements and reputation. You do not need to model the risks. Describe the ones that could affect your operations.
How you assessed them
Say briefly which assets, activities and parts of the value chain are exposed, and how sensitive they are. For example: "Our two warehouses are in flood zones; a flood would stop deliveries for about a week."
Time horizons and adaptation
Selko Report asks for short-term, medium-term and long-term risks separately, using the VS time horizons. Then answer whether you have taken adaptation actions and describe them, such as flood protection, cooling or alternative suppliers.
Physical climate risk assessment from Selko
Selko provides physical climate risk assessment. Selko Climate Risk screens your sites or buildings for flood, heat stress and snow load, today and under future climate scenarios. The results give you a concrete starting point for describing physical risks in C4. The screening currently covers locations in Finland.
Frequently asked questions
Related content
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How the VS replaces a materiality assessment: essential, if-applicable and voluntary datapoints, the relief for 10 employees or less, and when information can be omitted.
Read moreReady to make progress?
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