Speaker 1: Welcome back to our ASRS course, I'm Barbara Albert, co-CEO of 100% Renewables, a consulting firm specializing in helping our clients to decarbonize. In this video, we'll provide a step-by-step guide to conducting scenario analysis for ASRS compliant. Scenario analysis can be challenging due to its speculative nature and the complexity of predicting how climate change will unfold. However, it's a powerful tool for uncovering vulnerabilities in your business model and identifying strategic opportunities in a future low-carbon economy. Here are our nine steps for conducting a successful scenario analysis. Step number one, learn from best practices and industry leaders. Draw inspiration from businesses that have excelled in integrating scenario analysis into their strategic planning. This case studies not only provide valuable insights into effective practices, but also highlight the tangible benefits of a well-executed scenario analysis navigating the complexities of climate change. Step number two, select scenarios that matter. Start by identifying a set of plausible climate scenarios that cover a range of possible futures. These should include a scenario that reflects the most ambitious global temperature goal, such as the Paris Agreement goal. Another scenario might reflect a pathway where current policies continue without significant additional efforts to mitigate climate change, which is then leading to higher global warming. For example, you can use scenarios developed by the IPCC or those included in the IEA World Energy Outlook. Step number three, leverage tools and expertise for scenario analysis. Embrace a range of existing tools, data, research, and external expertise to enrich your scenario analysis. From climate data modeling software to consultancy services specializing in climate risk, the resources at your disposal can significantly enhance the quality and the depth of your analysis. Step number four, engage stakeholders. From early on in the process, facilitate an inclusive dialogue with both internal and external stakeholders to gather diverse perspectives, to build consensus, and to integrate stakeholder concerns into your strategic planning. Engaging with stakeholders not only enriches your scenario analysis with broader insights, but also helps build support for your strategic responses, enhancing transparency and fostering stronger relationships with customers, suppliers, investors, and the community. Step number five, understand the business impact. So, analyze the direct and indirect consequences of each scenario on your business operations, your supply chains, your customer demand, compliance costs, and also a competitive landscape. Consider both the physical impacts of climate change, such as extreme weather events and sea level rise, and transition impacts including policy and legal changes, technological innovation, market trends, and societal shifts in behavior and preferences. Step number six, assess the resilience of your strategy. So, evaluate the robustness of your business model against the identified scenarios to uncover areas of vulnerability and strength. This step involves a detailed review of your operational, financial, and strategic capacities to withstand and adapt to climate-related changes. Highlight areas where your business is well-positioned to manage risks and identify gaps where additional measures or transformations are necessary. Step number seven, develop strategic responses. Based on the analysis and stakeholder engagement, develop a strategic response that safeguards your business against risks while capitalizing on emerging opportunities. Strategies might include enhancing operational efficiency, adopting new technologies, entering emerging markets for sustainable products and services, enhancing climate resilience in your infrastructure and supply chains, and setting science-based targets for emissions reduction. Your strategy should be both adaptive and forward-looking. Step number eight, monitor and revise. Recognize that climate change and its impacts are dynamic and subject to ongoing scientific research and policy development. So, regularly revisit and update your scenario analysis to reflect the latest climate projections, technological advancements, and regulatory changes. This iterative process ensures your business remains agile and responsive to new information and evolving risks and opportunities. And finally, Step number nine, communicate and report. Clearly articulate the outcomes of your scenario analysis and strategic responses in your sustainability report and other communications. Transparency about your approach to managing climate risks and opportunities not only demonstrates accountability, but also positions your business as a leader in sustainability and resilience. I hope you found these steps useful. Please remember that by conducting detailed scenario analysis in line with ASRS requirements, you not only comply with the new standards, but also gain strategic insights that could drive innovation and competitive advantage in a transition to a low carbon economy. Please also remember that you can always engage with experts such as 100% Renewables if you need help with your climate risks and opportunities or with conducting a scenario analysis. In our next video, we'll have a look at developing transition plans for ASRS compliance. Please note that this video is part of our complimentary course on the ASRS. We have put the link to the course in the description below. Thanks very much for watching and I hope to see you in my next video.