Climate Scenario Analysis 101. Beginner to Masterclass.

Define scenario analysis as assessing what could happen in the future amid uncertainty, including climate change implications, risks and opportunities, with financial impacts, to guide planning, strategy, and investments.

Explore the IPCC's AR6 findings on the enhanced greenhouse effect due to carbon dioxide, methane, and nitrous oxide, and the warming and hot extremes evidenced by observations since the 1950s.

Explore the main climate model families: general circulation models, earth system models, emics, regional climate models, paleoclimate models, and integrated assessment models—and how they inform policy, economics, and business risk.

Understand process-based integrated assessment models that quantify future pathways, support mitigation scenarios toward the 1.5°C target, and underlie IPCC assessments, SSPs, and RCPs.

Explore representative concentration pathways and radiative forcing in watts per square meter, as IPCC AR5 outlines RCP 2.6, 4.5, and 8.5, and CMIP5 model ensembles.

Explore shared socioeconomic pathways (SSPs) and their relation to climate scenarios within RCPs, examining emissions trajectories, temperature outcomes, and policy routes toward net-zero by 2050.

Explore how international organizations shape climate scenario analysis disclosures, highlighting the TCFD and the IFRS Foundation's ISSB, with qualitative scenarios guiding investor reporting and upcoming mandatory requirements.

Explore how EU reference scenario and UK FRC report shape climate scenario analysis for policy, energy, and finance disclosures.

Explore the impact of IFRS S1 and S2 on climate scenario analysis, covering governance and strategy, risk management, metrics and targets, with ESRB guidance and near-term implementation focus.

Understand IFRS S1 and S2 sustainability disclosures, including effective dates and relief for scope 3 emissions. Examine how jurisdictional status and global adoption affect climate scenario analysis under S2.

Explain IFRS s2 objective to disclose climate related risks and opportunities for primary users of general purpose financial reports, covering governance, strategy, risk management, and metrics and targets.

Explore how IFRS two requires climate related scenario analysis to assess resilience of the entity's strategy and business model to climate change, developments, and uncertainties.

Identify IFRS part 5 S2 key inputs for climate scenario analysis, including disclosed scenarios, diverse range of scenarios, transitional and physical risks, and alignment with net zero by 2050.

Explore how IFRS two requirements for risk management disclosures integrate climate related risks and opportunities, using scenario analysis to inform enterprise processes and investor reporting.

Examine IFRS S2 metrics and targets, including cross-industry metrics and scope 1–3 emissions, and learn how to disclose climate targets and progress toward net zero.

Explore IFRS S2 industry guidance for climate disclosures, analyzing scope one emissions and scope two and three, with net zero by 2050 scenarios for oil and gas and airlines.

Explore how IFRS S1 and S2 disclosures converge on climate reporting, emphasize climate scenario analysis as a priority, and prepare for 2024–2025 regulatory developments and scope three emissions.

Explore finance and energy sector practices for climate risk management and scenario analysis using NGFS scenarios, key guidance, and publicly available tools and data.

Map climate risk drivers to Basel risk types through scenario analysis, detailing physical and transition risks and their impacts on market, credit, and operational risk, with capital implications.

Explore how the Bank of England's biennial exploratory scenarios test UK banks and insurers against climate risks, detailing early action, late action, and no action paths and their macroeconomic impacts.

Analyzes Bank of England early and late action scenarios where renewables replace fossil fuels, carbon pricing raises consumer prices, and no-action paths affect GDP, interest rates, and physical risks.

Discover how the Glasgow Financial Alliance for Net Zero uses sectoral pathways for finance sector scenario analysis, aligning with 1.5°C and Race to Zero with WWF, Guidehouse, and HSBC.

Surveys by the Financial Stability Board and NGFS show climate scenario analyses vary in scope and objectives, complicating cross-border comparisons and highlighting data gaps and tail risks.

The lecture explains how the IEA's world energy model and the Energy Technology Perspectives model combine into a hybrid global energy and climate model, used to project WEO scenarios.

Explore BP's energy outlook with three scenarios—accelerated, net zero, and new momentum—and their 2050 emissions paths, including about 70% reduction, over 95% reduction, and under 10% below 2018.

Explore the UK national grid's four scenarios for energy supply and decarbonization, including falling short, system transformation, consumer transformation, leading the way, and net zero or net negative outcomes.

HSBC piloted climate scenario analysis and internal stress testing for portfolios most exposed to climate risk, with disclosures aligned to TCFD and NGFS orderly, disorderly, and hothouse scenarios.

Barclays' tcfd-aligned 2021 disclosures present climate scenario analysis under early, late, and no-action paths, highlighting wholesale credit risks and sector transition drivers.

Apply a practical implementation plan for climate scenario analysis, outlining a typical work plan and the scenario template to guide a climate related analysis framework.

Outlines a 12-week climate scenario analysis workplan, detailing board paper preparation, PMO setup, governance, executive training, workshops, and final board presentation.

Secure board-level engagement and appoint a project sponsor for climate scenario analysis, then choose a group-wide rollout with a clear escalation path.

Define the board meeting agenda for climate scenario analysis, appoint a project sponsor, outline governance, definitions, and 30-year to 2050 time horizons, IPCC 1.5°C targets, data needs, resources, and funding.

Establish the week 2 project team, appoint board member representatives, and resource the central project team; deliver intensive training to build climate change and scenario analysis expertise.

Establish a cross-functional climate change working group chaired by a senior executive to govern climate scenario analysis, report to the sustainability committee, and maintain a multidisciplinary team for ongoing governance.

Executive awareness training introduces IPCC and IEA climate scenarios, including RCPs and net-zero by 2050, to map business strategies, balance sheets, and actionable what-if scenarios across regions.

Lead week 6–8 scenario analysis workshops with focused draft scenarios, preparing executive awareness training to tailor IEA and IPCC level scenarios, including static and dynamic balance sheets and meaningful narratives.

Examine transition risk narratives for an airline and an oil and gas firm aiming for net zero by 2050, covering carbon taxes, licenses, jet fuel replacement, and renewables shifts.

Explore physical risk scenarios under the no action scenario, including sea level rise, flooding, heatwaves, and storm damage to planes and oil platforms, and quantify impacts with ranges and probabilities.

Review workshop outputs with businesses and functions to produce concise climate scenarios, detailing scope and emissions by sector and geography, and actionable outcomes.

Week 12 board level paper for approval outlines climate scenarios and heat maps for internal reporting. Align with anticipated external disclosures and designate CFO or CRO ownership.

Explore the climate scenario data collection template, a simple tool for documenting workshop outputs, scenario narratives, scope, risks, impacts, and actions toward net zero by 2050.

Conclude the climate scenario analysis course by outlining global requirements. Use scenario analysis as a forward-looking tool to measure financial impacts of transition paths to net zero, guiding investments.

Explore five climate training courses, from climate change fundamentals to sustainable reporting, with a recommended beginner sequence and options for in-house training and consulting.