Climate Governance Initiative

Climate Scenario Analysis

12 October 2023

Guide Chapter Content

While scenario analysis as a strategic tool is not new, climate scenario analysis is a new concept for most organisations. Climate scenarios challenge conventional thinking and business-as-usual assumptions. The analysis provides organisations with a structured process to explore business opportunities and risks, through the lens of multiple, equally plausible scenarios, grounded by data and business insights. These scenarios provide an important overview of what can happen in the future, how an organisation might perform in future climate states and outline the choices that boards may need to consider when updating or developing more resilient business models and strategies in the present day.

Chapter Zero NZ in collaboration with the Institute of Directors, KPMG NZ, the Ākina Foundation, the External Reporting Board (XRB) and the Ministry for the Environment have created this resource to support directors in the effective use of climate scenarios.

This resource explores climate scenarios in the New Zealand governance context, and provides guidance around why climate scenarios are useful tools for boards and how directors should engage with the development, analysis and review stages of the process.