This Climate Brief gives an overview of the degree of implementation of climate-related scenario analysis to evaluate risks and opportunities, based on the answers of a sample of 2,003 companies to CDP 2017 Climate Change questionnaire. The analysis shows that:
- Only 5% of companies indicate using scenario analysis to evaluate their climate-related risks and opportunities;
- Half of these companies are based in Europe;
- The use of climate-related scenario analysis is much more common among oil and gas companies and energy utilities than in other sectors of activity;
- Among companies that disclose carrying out a scenario analysis of their transition risks : about 40% indicate using tailored scenarios, in general internally designed and modelled, and only half explicitly mention using a 2°C or more ambitious scenario;
- Among companies that disclose carrying out a scenario analysis of their physical risks : about 25% indicate using external scenarios and tools, in most cases those put together by the IPCC;
- Overall, there seems to be confusions in the way climate-related scenarios are understood and used, and a need for guidance on this topic has been identified.
This publication will be followed by additional work on climate-related scenario analysis over the course of 2019, which will be publicly available.
This research is part of the Reimagining Disclosure Project, led by CDP, and supported by Climate-KIC.