Our climate analytics capabilities allow risks and opportunities to be assessed across your value chain or portfolio, in the short, medium and long-term, based on the latest climate scenarios. The outputs can support the increasing reporting requirements businesses face, and can be integrated into key strategic decisions and capital planning, increasing stakeholder confidence in business resilience and risk management.
We’re passionate about technology. We work with leading climate risk collaborators, Jupiter Intelligence™ and Risilience, to leverage data, assess risks across the value chain, and equip leaders with the knowledge and confidence they need to successfully navigate climate change.
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What is climate scenario analysis?
The uncertainty around the impact of climate change on our future environment, coupled with new disclosure and policy requirements, means organisations must understand and prepare for the physical and transtion risks they face.
Climate scenarios demonstrate different possible futures, based on expert peer reviewed projections. By understanding your Physical and Transition risks and opportunities, your business is better positioned to make key strategic decisions to be more resilient in a changing climate.
Physical risks are both acute and chronic and relates to extreme weather events and changes in temperature. These risks can cause severe business disruption and limitations on resource availability.
Transition risks are large-scale and cover more disruptive change such as political, economic or technological transformation. These risks are often associated with changing strategies, policies or investments as society and industry shift to a low carbon economy.
The transition also brings a number of opportunities. These include the development of new products and services, as well as new markets for companies to operate in.
The value this can bring in unlocking your ESG ambitions
Scenario analysis is a necessary exercise to understand what parts of the business are exposed to and driven by the effects of climate change. The importance of climate scenario analysis is driven by regulatory momentum and policy commitments, investor expectations and increasing reputational scrutiny and activism.
- Risk identification and financial impact
- ESG strategy design
- ESG reporting and disclosures
- Supporting your Net Zero transformation
Risk identification and financial impact
Scenario analysis allows your company to explore the risks it is facing through a quantitative lens. Mature companies can consider the potential financial impacts to their companies and identify risk hotspots.
ESG strategy design
Scenario analysis will enable your organisation to understand your business change needs and create an in-depth, valuable ESG strategy tailored to your company. An effective ESG strategy should integrate the results of scenario analysis into business as usual and stakeholder involvement.
ESG reporting and disclosures
Increasingly, regulations are specifying the need for scenario analysis within disclosures. Already, the following standards and regulations require scenario analysis: TCFD, UK MCD, TPT, CSRD, ISSB.
Supporting your Net Zero transformation
Scenario analysis enables a Net Zero transformation in line with achieving long term success, as called out by the Transition Plan Taskforce guidance. We’re reaching a tipping point: being too slow to act will cost companies more than changing the way they operate.
We will support you in collecting the data on your site locations, emissions mapping, resource consumption and more, will ensure you receive a tailored, bespoke approach aligned to your needs.
Using our modelling tools, we’ll map the potential impact your organisation faces under the selected scenarios and time frames, bringing to life the unknown. This will equip you to make informed decisions, react quickly and prepare for the future.
We transform these risk results into meaningful dashboards, where you’ll be able to accurately visualise where your risks lie, where your risks are increasing and where the most material financial impact is.
We’ll support you to integrate the findings into strategic planning, risk analysis, business continuity plans and engage with senior stakeholders, helping you focus your climate adaptation and mitigation actions.
Our climate data alliances
At PwC, we work with leading climate risk collaborators, Jupiter Intelligence™ and Risilience, to support analysis across sector and geography to identify climate risk and opportunity hotspots.
Jupiter Intelligence™ is a global leader in physical climate hazard data. Powered by proprietary cloud infrastructure and advanced machine learning, it brings together global climate models, historical datasets and high-resolution topographical models. The data allows for physical climate risk to be quantified anywhere on the planet, at a 90m grid resolution, every 5 years from the present to 2100. Quantitative outputs can also be presented in terms of financial losses to your business that climate change could pose.
Risilience is a climate-analytics company that supports business transformation to a low-carbon economy. It’s digital twin technology enables businesses to model transition and physical climate risks, in financial terms (Earnings Value @ Risk), over multiple time horizons. They integrate fourfold expertise centres; science, risk, business and technology, to help firms solve the multifaceted sustainability challenges they face today. Their technology is underpinned by influential frameworks pioneered out of the Cambridge Centre for Risk Studies at the University of Cambridge Judge Business School.
The value we bring to our clients
Global Energy Technology company
We helped the company scope and understand their climate risks and opportunities across transition and physical elements, working collaboratively to model the impact of declining oil and gas demand, and the increased frequency and severity of extreme weather events.
We created a user-friendly dashboard, which was integrated into existing enterprise risk management processes to assess where and how to implement adaptation strategies.
Largest UK Residential Property Development company
We supported this company through their TCFD journey, developing their climate strategy and governance structure, as well as assessing their approach to identifying material climate risks. We could then provide recommendations for improvement and best practice.
We also developed robust TCFD scenarios to help build detailed calculation pathways and conduct scenario analysis, driving continuous improvement.
Global Consumer Packaged Goods company
We helped the company map out their products to create a footprint of typical suppliers. We helped the company understand their exposure and vulnerability to climate-change driven changes, such as the impact of extreme weather event frequency and the severity of this on key commodities.
We assessed chronic risk using yield curves to see how climate change will impact the yield of these commodities, demonstrating how a decrease in yield will affect the price of the commodity, cost of goods and revenue of products.
