If you’re a CEO of a micro or small enterprise in the Netherlands, you probably think climate risk is something that hits oil giants and airports. That’s a fatal mistake. Because while the North Sea rises slowly, your insurance premiums, supply chain delays, and utility costs aren’t waiting for high tide.

Let’s rip off the greenwashed veil. Quantifying climate risk is not about virtue signalling to your stakeholders, it’s about knowing where your cash will evaporate.

Climate Change Is Now a Financial Risk, Not a Future Hypothesis

Morgan Stanley, JPMorganChase, and the Institute of International Finance all say it out loud: The Paris Agreement targets are slipping out of reach. Translation:

More floods. More droughts. More volatility.

And while larger enterprises hire entire ESG teams, micro and small businesses get left in the rain, literally and figuratively, because they’re told it’s “too complex” or “not urgent yet.”

We’re here to dismantle that lie.

The new CSRD (Corporate Sustainability Reporting Directive) demands quantification, not just storytelling. The latest Omnibus packages say: data over fluff, numbers over narratives.

Scenario Thinking: Stop Playing the Probability Game

Traditional risk maps rate risk on a Likelihood x Impact matrix. Cute. But when it comes to climate, likelihood is meaningless. That’s the whole point of climate chaos, it’s nonlinear, unpredictable, and loaded with tipping points.

Instead, we use scenario analysis. Think:

• What happens if carbon pricing doubles in the Netherlands?
• What if your logistics hub gets hit by flooding twice in one fiscal year?
• What if water becomes your next major raw material cost?

We build plausible futures. Not probable ones. That’s how you navigate uncertainty like a real strategist, not a spreadsheet hostage.

The Holy Trinity of Climate Risk Quantification

Welcome to the model that separates hobby reporting from board-level decision-making:

1. Hazard

This is the climate punch. Think: flood, heatwave, drought. You model how it’s changing, how often it hits, and where.

2. Exposure

This is what gets hit. Assets, resources, operations. Every vulnerability in your value chain becomes a potential cost center.

3. Vulnerability

This is how hard you get punched. How prepared are you? How adaptive is your business? What buffers do you have? Or don’t have?

When combined, this triad produces financial impact ranges, scenarios you can price, mitigate, and plan for. The goal isn’t perfection. The goal is preparedness.

Case in Point: Water Scarcity in the Food and Beverage Sector

Let’s zoom into a practical example, from a sector close to many Dutch SMEs: food and beverage.

Water isn’t just a resource, it’s an operational dependency. Whether it’s washing, processing, or cooling, the absence of clean, accessible water derails everything.

So what do we do?

• Map current water stress at all production and supplier locations (WRI tools help here).
• Project future scenarios: How does stress change under 1.5°, 2°, or 3° warming paths?
• Estimate financial consequences: Increased costs, disrupted operations, supplier risk.

The result? A clear, strategic map of where to reinforce, reallocate, or redesign your operations, before climate reality enforces it for you.

Governance, Not Guesswork

Quantifying climate risk doesn’t mean buying expensive dashboards or hiring five ESG consultants. It means:

• Knowing which assets are most exposed.
• Understanding how transition risks (like new CO₂ taxes or regulations) alter your cost base.
• Identifying the real financial vulnerabilities that could hit your books.

And yes, it aligns with CSRD compliance. But more importantly, it aligns with your survival.

TL;DR for the Boardroom

• Climate risk is financial risk.
• Scenario thinking beats probability guessing.
• CSRD demands quantification, not green fairy tales.
• Hazard + Exposure + Vulnerability = Real financial risk.
• You don’t need to be big to be prepared. You need to be smart.

If You’re Not Quantifying, You’re Gambling

Whether your business is a food importer, a local brewery, or a transport firm in Zuid-Holland, climate change is already in your cash flow.

Start now.

Not because Brussels said so.

But because your supply chain, your staff, and your investors will ask you the same question:

"Did you see this coming?"