Climate risk and carbon reporting drive new business competitiveness standards

A decade after Mark Carney warned of a ‘Climate Minsky Moment’—a sudden market correction caused by the late realization of climate-related asset devaluation—global finance continues to navigate complex regulatory landscapes. While ESG data reporting has increased and climate risk is now central to financial regulation, investors still struggle to accurately price these risks.

Climate risks are categorized into physical risks, such as infrastructure damage from extreme weather, and economic transition risks, such as carbon taxes or technological obsolescence. For companies integrated into European supply chains, measuring carbon footprints has transitioned from a compliance exercise to a core business necessity.

In sectors like the Tunisian automotive industry, businesses must now provide detailed data on both organizational emissions and product-specific footprints to remain competitive. The increasing focus on Scope 3 emissions is actively altering purchasing behaviors, as major clients demand precise data from their entire value chain to avoid relying on estimations.