Scenario Analysis
Scenario analysis is a strategic planning tool that models how different climate pathways — typically 1.5°C, 2°C, and 4°C warming — could affect an organisation’s operations, strategy, and financial performance.
What is Scenario Analysis?
Climate scenario analysis is a core requirement of TCFD and ISSB disclosures. It involves selecting climate scenarios (e.g., IEA Net Zero by 2050, IPCC SSP pathways), identifying the key drivers for your business under each scenario (carbon pricing, regulation, demand shifts, physical impacts), and assessing the financial implications. This is not forecasting — scenarios describe plausible futures, not predictions.
Practical Examples
A property company models three scenarios: orderly transition (1.5°C), disorderly transition (2°C), and hot house world (4°C), assessing impacts on asset values, retrofit costs, and insurance premiums.
An energy company uses IEA scenarios to assess the long-term viability of its gas assets under different policy trajectories.
How Climatise Helps
Climatise provides the emissions data foundation that scenario analysis builds upon, supporting the quantification of carbon pricing impacts and regulatory exposure under different pathways.
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