4th CLIMATE CHANGE SCENARIO ANALYSIS
With progressive adoption of the International Sustainability Standards Board (ISSB) by regulators, conducting a climate change scenario analysis is fast becoming a business strategy norm. A climate change scenario analysis aids corporates in understanding the strategic implications and financial impacts of climate-related risks and opportunities.
Climate Change Scenario Study: Risks Identification, Quantification, Mitigation and Adaptation
Facilitated by an independent consultant, the Company has begun conducting our 4th climate change scenario study to better understand the short- to long-term financial implications of climate change-related physical and transition risks trends, covering acute and chronic risks as well as policy, technology, market and reputational risks.
Building on our 3rd study that was completed in 2022, the 4th study is expanded in scope, and incorporates methodology and data updates, as well as new and emerging risks to be quantified. Findings and recommendations from our 3rd study can be found on page 80 of CDL ISR 2024.
Key methodology changes include updated impact pathway mappings with increased clarity around new policy, market and financial impact mechanisms. Increased granularity of data at the asset-level, such as revenue, emissions and insurance premium, alongside the application of sub-national values where possible, led to greater accuracy of the quantified financial impacts. The updated parameters of the 4th study vis-à-vis earlier studies are shown in the table below. The study is still ongoing and is expected to be completed in 2H 2025.