Difference between revisions of "Climate Change Scenario Analysis"
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== Definition == | == Definition == | ||
| − | '''Climate Change Scenario Analysis''' denotes a specific form of [[Scenario Analysis]] that organizations can use to identify, measure and mitigate [[Climate-Related Risk]] generated by [[Climate Change]] | + | '''Climate Change Scenario Analysis''' denotes a specific form of [[Scenario Analysis]] that organizations can use to identify, measure and mitigate [[Climate-Related Risk]] generated by [[Climate Change]]. |
== Structure == | == Structure == | ||
Organizations should include scenario analysis as part of their strategic planning and/or enterprise risk management processes by:<ref>TCDF 2018, Technical Supplement The Use of Scenario Analysis in Disclosure of Climate-Related Risks and Opportunities</ref><ref>Credit Portfolio Alignment, An application of the PACTA methodology by Katowice Banks in partnership with the 2 Degrees Investing Initiative, 2020</ref> | Organizations should include scenario analysis as part of their strategic planning and/or enterprise risk management processes by:<ref>TCDF 2018, Technical Supplement The Use of Scenario Analysis in Disclosure of Climate-Related Risks and Opportunities</ref><ref>Credit Portfolio Alignment, An application of the PACTA methodology by Katowice Banks in partnership with the 2 Degrees Investing Initiative, 2020</ref> | ||
| − | * identifying and defining a range of [[Emissions Scenario| scenarios]], including a 2°C | + | * identifying and defining a range of [[Emissions Scenario| scenarios]], including a 2°C [[Climate Scenario]], that provide a reasonable diversity of potential future climate states |
* translated such physical scenarios into socioeconomic models with transition pathways for various economic activities. | * translated such physical scenarios into socioeconomic models with transition pathways for various economic activities. | ||
* evaluating the potential resiliency of their strategic plans to the range of scenarios; and | * evaluating the potential resiliency of their strategic plans to the range of scenarios; and | ||
Latest revision as of 14:08, 15 November 2021
Contents
Definition
Climate Change Scenario Analysis denotes a specific form of Scenario Analysis that organizations can use to identify, measure and mitigate Climate-Related Risk generated by Climate Change.
Structure
Organizations should include scenario analysis as part of their strategic planning and/or enterprise risk management processes by:[1][2]
- identifying and defining a range of scenarios, including a 2°C Climate Scenario, that provide a reasonable diversity of potential future climate states
- translated such physical scenarios into socioeconomic models with transition pathways for various economic activities.
- evaluating the potential resiliency of their strategic plans to the range of scenarios; and
- using this assessment, identify options for increasing the organization’s strategic and business resiliency to plausible climate-related risks and opportunities through adjustments to strategic and financial plans.
Disclosure
Over time, organizations can improve disclosure through documenting:
- management’s assessment of the resiliency of its strategic plans to climate change;
- the range of scenarios used to inform management’s assessment, including key inputs, assumptions, and analytical methods and outputs (including potential business impacts and management responses to them); and the sensitivity of the results to key assumptions.
