(C3.2b) Provide details of the focal questions your organization seeks to address by using climate-related scenario analysis, and summarize the results with respect to these questions.
Question dependencies
This question only appears if you select “Yes, qualitative”, “Yes, quantitative”, “Yes, qualitative and quantitative” or “Yes, qualitative, but we plan to add quantitative in the next two years” in response to C3.2.
Change from last year
New question
Rationale
Scenario analysis should be based on concise focal questions that provide direction for the analysis, and the results inform an organization’s decisions and actions. Providing this information to CDP data users gives insight into why your organization is using scenario analysis and how the results have impacted your organization’s strategy.
Connection to other frameworks
TCFD
Strategy recommended disclosure b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.
Strategy recommended disclosure c) Describe the resilience of the organization’s strategy, taking into consideration different climate related scenarios, including a 2°C or lower scenario.
SDG
Goal 13: Climate action.
Response options
Please complete the following table:
| Focal questions | Results of the climate-related scenario analysis with respect to the focal questions |
|---|---|
| Text field [maximum 3,000 characters] | Text field [maximum 3,000 characters] |
Requested content
General
- In this question you should provide a single response based on all scenarios disclosed in C3.2a.
Focal questions (column 1)
- List the focal question(s) that provided direction to your climate-related scenario analysis. See “Additional information” for further guidance on focal questions.
- Provide a rationale for selecting the scenarios disclosed in C3.2a to address the focal question(s).
Results of the climate-related scenario analysis with respect to the focal questions (column 2)
- Provide a company-specific summary of the results of the scenario analysis, and how the results have informed your decisions and actions, with respect to the focal question(s).
- You may also describe how the results of the climate-related scenario analysis have influenced your business strategy and financial planning more broadly.
Note for energy sectors:
- Discuss in particular whether your focal questions address the exposure of current investments in new reserves and/or assets to the risk of lower demand and stranded assets; how current and future capital expenditure may be affected by short-to-long term risk of stranded assets, and what probability/likelihood you assign to that risk. You should also discuss how you have considered your organization’s energy outlook in the scenario analysis, and whether you tested the flexibility of your strategy to adjust to significant changes in the demand for your products.
Note for financial services sector companies:
- Banks:
- Banks should consider providing a discussion of how climate-related scenarios are used, such as to inform credit and exclusion policies.
- Asset Managers/Asset owners:
- Asset managers should consider describing how they use climate-related scenarios, for example to better understand how climate-related issues inform relevant products or investment strategies.
- Asset owners should consider providing a discussion of how climate-related scenarios are used, such as to inform investments in specific assets.
- Insurance companies:
- Insurance companies should consider describing how they use climate-related scenarios, for example to inform insurance premiums and capital requirements.
Explanation of terms
- Focal question(s): The critical questions or potential decisions that a company seeks to address.
Additional information
Problem Definition: “Define the focal question(s)” – from section 2.2, step 2 of the TCFD Guidance on Scenario Analysis:
“This step is important because focal questions are a key anchor point for many of the decisions made during scenario development and analysis. In thinking about focal questions, a company is seeking to flesh out the focus of scenario analysis around the broad question of “how could climate change plausibly affect our [company, business unit, product, commodity input, customer segment], what should we do, and when?” Some questions a company should consider are as follows:
- What possible future developments need to be probed?
- What variables are needed to support decision-making?
- What forces and developments have the greatest ability to shape future performance?”
