Technical Supplement – The Use of Scenario Analysis

Technical Supplement - The Use of Scenario Analysis

Scenario analysis is a well-established method for developing strategic plans that are more flexible or robust to a range of future states. The use of scenario analysis for assessing climate-related risks and opportunities and their potential implications, however, is relatively recent. Given the importance of forward-looking assessments of climate-related risk, the Task Force believes that scenario analysis is an important and useful tool for an organization to use, both for understanding strategic implications of climate-related risks and opportunities and for informing stakeholders about how the organization is positioning itself in light of these risks and opportunities. It also can provide useful forward-looking information to investors, lenders, and insurance underwriters.

To assist organizations in undertaking and using climate-related scenario analysis, this technical supplement sets out and discusses:
• Using scenario analysis
• Considerations for applying scenario analysis
• Analytical choices involved in scenario analysis
• Types of climate-related scenarios
• Publicly-available climate-related scenarios from the International Energy Agency (IEA), the Intergovernmental Panel on Climate Change (IPCC), and others

TCFD Technical Supplement - The Use of Scenario Analysis Download