How to Build Climate Transition Scenario Planners for Asset Managers

As climate risks become a central concern for investors, asset managers are under pressure to integrate climate scenarios into their decision-making.

Building a climate transition scenario planner empowers firms to evaluate potential outcomes, manage risks, and align with regulatory and stakeholder expectations.

Why Climate Scenario Planning Matters
Benefits for Asset Managers
Essential Components
Steps to Develop a Planner
Helpful Resources

Why Climate Scenario Planning Matters

Climate change poses risks across industries, from physical risks like extreme weather to transition risks from shifting policies and technologies.

Scenario planners help asset managers assess these risks, test portfolio resilience, and identify opportunities under different climate pathways.

Benefits for Asset Managers

They enable informed investment decisions, improve regulatory reporting, and strengthen stakeholder trust.

They also support ESG integration and long-term value creation.

Essential Components

Include climate data integration, risk modeling, portfolio stress testing, customizable assumptions, and clear visualizations.

Tools should comply with frameworks like TCFD and NGFS guidelines.

Steps to Develop a Planner

1. Define objectives and engage stakeholders.

2. Select data sources and modeling methodologies.

3. Develop user-friendly dashboards and reporting tools.

4. Pilot with select portfolios, gather feedback, and iterate.

Helpful Resources

Explore resources from TCFD Hub and NGFS for guidelines and case studies.

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