Get the Most out of Your Climate Scenario Analysis

Boston Consulting Group (Sep 2, 2024) "Get the Most out of Your Climate Scenario Analysis" argues scenario analysis is now a requirement for good corporate disclosure: more than 8,000 global companies have committed to the Science Based Targets initiative (SBTi); the principles of the Task Force on Climate-related Financial Disclosures (TCFD) are widely accepted; and EU, US, Australia and New Zealand legislation is making disclosure mandatory. A core principle: scenario analysis is not a forecast — it is a description of what would have to be true to meet a certain outcome, e.g. holding warming to 1.5°C. Done well, it surfaces key strategic questions, underappreciated risks and emerging opportunities. Useful for SEA mid-market boards now subject to IFRS S2 expectations.