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TCFD Climate Scenario Analysis

A guide for finance teams on frequently asked questions

Scenario analysis, a key recommendation of the Task Force on Climate-Related Financial Disclosure (TCFD), allows a company to understand and quantify the risks and uncertainties it may face under different hypothetical futures. It helps in decision making and allows businesses to shape their strategy.

Performing scenario analysis can be a challenging and demanding task due to the complexities that it carries.

As scenario analysis is highly analytical and modelling-based, the commitment and involvement of finance teams from the outset is critical.

Finance teams bring the skillset that is required to understand the modelling process and help businesses embed and translate the scenario analysis outcomes into strategic decisions.

To help finance teams enhance their knowledge of scenario analysis and steer them through the process, we have produced this guidance.

The guide addresses frequently asked questions, including:

  • What factors should be considered when selecting scenarios?
  • How are scenario analysis findings integrated within business strategy and decisions?
  • How should businesses report their scenario analysis findings to respond to investors’ and other stakeholders’ needs?

This guide is based on our work with companies across multiple sectors and the insights we have gained supporting TCFD implementation since its inception.

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Insights Series

Explore practical examples demonstrating how organizations are implementing the TCFD recommendations and explore reporting examples highlighting good practice TCFD disclosures.

Guidance

See other guidance A4S has produced and further resources on adopting the TCFD recommendations.

Statement of Support

LONDON - UK - 16th Nov 2017.Accounting for Sustainability  A4S, CFO and Investor Session held at St James's Palace in London and hosted by HRH The Prince of Wales.
Photograph by Ian Jones for A4S.

See the signatories to our TCFD statement of support from key groups in the financial system, including CFOs, CEOs of accounting bodies and pension fund chairs. 

Accounting for Sustainability is a Charitable Incorporated Organization, registered charity number 1195467. Accounting for Sustainability is part of The Prince of Wales’s Charitable Foundation (PWCF) Group of Charities.
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