How We Structure Climate Scenario Analysis
The scenario frameworks, time horizons, and analytical approach we use when assessing physical and transition climate risk.
22 September 2025 · 6 min read
Our climate scenario analysis is built around internationally recognised frameworks, principally the Network for Greening the Financial System (NGFS) scenarios and Intergovernmental Panel on Climate Change (IPCC) pathways, selected based on the decision the analysis needs to support.
Scenario Selection. We typically evaluate a minimum of three scenarios spanning orderly transition, disorderly transition, and a hot-house-world outcome, allowing organisations to see how their assumptions perform across a meaningful range of futures rather than a single projected outcome.
Physical and Transition Analysis. Physical risk analysis maps asset and operational exposure against hazard datasets for the relevant time horizons. Transition risk analysis evaluates exposure to policy, technology, and market shifts at the sector and business-line level.
Translating Findings. Every scenario output is translated into a business-relevant format — financial impact ranges, exposure summaries by asset or portfolio segment — structured for board, risk committee, or disclosure use rather than presented as raw modelling output.