(C2.1a) How does your organization define short-, medium- and long-term time horizons?
Change from last year
No change
Rationale
CDP has added this question to understand the different timescales at which businesses consider climate-related issues in their risk assessment process and in strategy and financial planning. Subsequent questions on risk and opportunity disclosure, strategy and financial planning, relate to different time horizons, hence their definition is requested here.
Connection to other frameworks
TCFD
Strategy recommended disclosure a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.
Response options
Please complete the following table:
| Time horizon | From (years) | To (years) | Comment |
|---|---|---|---|
| Short-term | Numerical field [enter a number from 0-100 using no decimals or commas] | Numerical field [enter a number from 0-100 using no decimals or commas] | Text field [maximum 2,400 characters] |
| Medium-term | |||
| Long-term |
Requested content
General
- This question is seeking a definition of what your organization considers to be short-, medium-, and long-term horizons in the context of climate-related risks and opportunities.
- If your long-term time horizon is open-ended, you may leave the column “To (years)” blank.
Comment (column 4) (optional)
- You may specify if this time horizon for assessing climate-related risks and opportunities is aligned with other business practices time horizons and provide any other relevant information.
Additional information
Time horizons of climate-related risks
- There is a common perception that all climate-related risks are “long-term”, arising in 10+ years; however, transitional risks such as policies, technology, and markets are emerging earlier than this, and physical risks including the frequency and intensity of storms, floods, and droughts are recognized risks today.
- Evaluating exposure to climate-related risks over a range of time horizons allows for a strategy for the transition to a low-carbon economy as recognized in the Paris Agreement and UN SDGs.
TCFD position on time horizons
- Because the timing of climate-related impacts on organizations will vary, TCFD believes specifying timeframes across sectors could hinder organizations’ consideration of the climate-related risks and opportunities specific to their businesses. TCFD is therefore not defining timeframes and encourages respondents to decide how to define their own timeframes according to the life of their assets, the profile of the climate-related risks they face, and the sectors and geographies in which they operate.
- In assessing climate-related issues, organizations should be sensitive to the timeframes used to conduct their assessments. While many organizations conduct operational and financial planning over a 1-2 year timeframe, and strategic and capital planning over a 2-5 year timeframe, climate-related risks may have implications over a longer period. It is therefore important for organizations to consider the appropriate timeframes when assessing climate-related risks.
