How do you assess climate risks and report on them?

Climate-related disclosure has become a focal point for organizations. Risk assessments must include climate-related risks and opportunities – and that’s where scenario analysis comes in.

What is Scenario Analysis?

Scenario analysis is a widely used tool in strategic foresight. It helps organizations create plausible future narratives to inform decision-making. In a world of uncertainty, scenarios explore
alternatives that challenge the “business-as-usual” assumptions.

 

Identifying climate risks

Scenario analysis has many useful applications. One of them is understanding how climate related events may impact businesses over time.
Scenario analysis can help you:

• Assess business implications of climate risks & opportunities
• Integrate climate risks into financial planning
• Strengthen ESG strategy & future resilience

 

Scenario analysis for sustainability reporting

 

Scenario analysis is not only a CSRD requirement (ESRS 1 – Climate change). It also provides crucial insights for sustainability reporting. It can inform strategic decision-making on ESG
topics. Finally, in double materiality assessments, scenario analysis can help quantifying impacts, risks & opportunities (IROs).

3 Steps to follow:

Our approach to assessing climate risks & opportunities:

• Identify the most important climate-related issues for your business
• Quantify climate financial risks & opportunities with scenario analysis
• Disclose & implement a climate transition plan with metrics and targets

By using scenario analysis, organizations can broaden their strategic perspective and approach the future with curiosity, readiness, and vision.

 

INTERESTED TO LEARN MORE?
Contact us to explore how we can help you carry out a climate risk assessment and strengthen your competitive advantage.