IPIECA launch an awareness briefing - The role of scenario analysis in climate reporting.
Recently, there has been an increasing focus on the use of scenario analysis as a tool to aid corporate disclosure of climate-related risks and opportunities - for example, the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) or the CDP questionnaire. Scenario analysis can be a useful tool to inform a company’s business plan, but this is only one of many approaches.
This awareness briefing aims to ensure that the benefits and limitations of scenario analysis tools, and disclosure of their use, are clearly understood. It describes how it can be useful to investors to understand how a company has used scenario analysis, and some of the risks to their use in this situation. It also includes examples of how oil and gas companies currently use tools and methodologies, including scenario planning to assess climate change risk.