Climate scenario analysis

The analysis of climate scenarios is a tool to stimulate the company to develop a medium-long term strategic vision that considers the risks (physical and transitional) and opportunities associated with climate change.

A climate scenario consists of projections aimed at considering how climate risks and opportunities influence a specific development path of the company.

This type of analysis is becoming increasingly relevant for companies that are exposed to climate risk with respect to their operations and for financial operators who risk reducing the returns on their investment portfolio.

Reporting on the impact that climate change has on the company (in addition to the impact that the company has on the climate) has a twofold purpose: to increase companies’ awareness of climate change, incentivising them to adopt a mitigation and adaptation plan in the medium to long term; and to quantify the financial impact so stakeholders are informed about the company’s commitment to climate change, which will be in line with the recommendations of the Taskforce on Climate-related Financial Disclosure (TCFD).

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Physical and transition scenarios

Transition scenarios define business economic development trajectories that produce a certain GHG emissions level. Instead, physical scenarios calculate the impact of GHG emissions variation on climate change.

Physical and transition scenarios complement one another. Transition models calculate GHG emissions variation based on different development trajectories, while physical models show the impact of such changes on the climate.

Comparing results from different scenarios aims at assessing how the transition to a sustainable economy affects future development and emissions.

Why should you rely on Carbonsink?

Our vertical experience in the field of climate change leads us to be among the first and most qualified operators in supporting your company. We assist you in developing climate scenarios and adopting a customised mitigation and adaptation strategy in the medium-long term capable of minimising risks and seizing the business opportunities that emerge from the analysis.

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