What are Climate Scenarios?
As the impacts of climate change become increasingly unpredictable, the ability to plan for change and uncertainty is essential to business strategy. Scenario thinking is central to building in this crucial resilience to business strategies: by constructing multiple plausible narratives as to how the future might turn out, businesses can generate insights as to where key strategic opportunities and vulnerabilities might lie.
Why should my business employ scenario thinking?
Scenario thinking is increasingly mandated by investors and regulators alike across a range of voluntary and mandatory disclosure frameworks:
- Voluntary frameworks: both the International Sustainability Standards Board (ISSB) and the Carbon Disclosure Project (CDP) encourage the use of scenario analysis via their disclosure questionnaires;
- Mandatory frameworks: the Taskforce on Climate-related Financial Disclosures (TCFD) and the Corporate Sustainability Disclosure Regulation (CSRD), affecting large businesses in the UK and EU, respectively, require companies to undertake scenario analysis to build in strategic resilience.
Scenario analysis can help businesses futureproof corporate strategy by enabling them to anticipate change, build in flexibility, manage key climate-related risks, and identify key strategic opportunities to benefit from the climate transition.
How can Longevity Partners assist?
Leading scenario-based publications, such as those published by the Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) can appear opaque and overly technical. Longevity Partners has distilled four climate scenarios from industry-standard publications to help firms construct resilient business strategies in the face of considerable uncertainty. Drawing on scenarios developed by the IPCC and IEA, Longevity’s scenarios describe how four possible futures might play out at the macro level. This document is available to download for free using the link below.
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For businesses considering developing in-house climate scenarios, or thinking about how scenarios can be used to support long-term business strategy, a full document plus advisory service is available. Contact our expert team using the details on the right for further information.
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