Climate Change Adaptation Information Platform(A-PLAT)
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Practice of scenario analysis

TCFD provides the following processes as a reference for businesses to analyze scenarios.

Processes for applying scenarios analyses to climate-related risks and opportunities presented by TCFD
(TCFD(2017) "Technical Supplement: The Use of Scenario Analysis in Disclosure of Climate-Related Risks and Opportunities" and "Ministry of the Environment (2020) "Strategic planning utilizing TCFD: Scenario analyses incorporating climate-related risks and opportunities. Ver2 0." Compiled by National Institute for Environmental Studies.)

1. Establishment of governance

Incorporate scenario analysis into strategy formulation and risk management processes. In addition, we have established a monitoring system with the relevant Board of Directors and other bodies. Identify the internal and external stakeholders to be involved and how they are involved.

2. To assess the importance of risk

Assess the potential impact of transition risk and physical risk. Consider current and potential future risks and opportunities facing the company, their potential importance in the future, and the interests of stakeholders in the organization.

人物イラスト

The section on Climate Change Impacts and Adaptation by Industry presents information on climate change impacts (physical risks and opportunities) and adaptation measures by industry.

3. Definition of scenario groups

Establish multiple future scenarios that encompass relevant transition and physical risks. Consider what scenarios (and stories) are appropriate for your company, input variables, assumptions, and analytical methods. It also identifies the scenario to reference.

人物イラスト

In the Forecast WebGIS, you can see forward-looking statements about physical risks.

4. Evaluation of business impact

In each scenario, we assess the potential impact on our strategic and financial position. The impact on the business is "input cost," "business cost," "profit," "supply chain," "business shutdown," and "timing." Sensitivity analysis is also performed.

5. Definition of countermeasures

Identify applicable and realistic options to manage identified risks and opportunities. Countermeasures include business model reform, portfolio reform, and investment in capabilities and technology. We examine what modifications are required to our strategic and financial plans.

人物イラスト

In examining responses, let's look at the actual examples of corporate climate risk management and opportunities (Adaptation business).

6. Documentation and Information Disclosure

Document the process. Communication with related organizations. Prepare for disclosure of key input variables, assumptions, analytical methods, analytical results, and possible management options.