Utilizing Sectoral Scenario Planning Profiles

<h2>Sector Scenario Planning Profiles</h2>

<p>Scenario Planning profiles for individual sectors provide you with a Quick Scan of the how climate change and climate policies could evolve with respect to the their materiality for that sector, again recognizing that there is no one size fits all estimate of future materiality.   </p>

<p>Profiles begin by pointing you to curated information collections you can use to dig more deeply into the future of climate change outcomes from the standpoint of that sector, allowing you to focus on the issues and sources of most relevance to you.   </p>

<p>Profiles then organize scenario planning relevant variables for the sector using a dashboard format.</p>

<h3>Sector Known Knowns, Known Unknowns, and Unknown Unknowns</h3>

<p>While the future is inherently uncertain, just how uncertain is it when it comes to anticipating a sector's future under alternative climate change scenarios? The number of "known unknowns" and the possibility of "unknown unknowns" is likely to vary by sector, and could be a useful indication of how much confidence to assign to current thinking about a sector's future in light of climate change.  </p>

<h3>Plausible Near-Term Sector Materiality</h3>

<p>Many business decision-makers are primarily interested in the short-term. As discussed elsewhere in the Guidebook, this makes thinking about the future difficult. The shorter the time frame, the harder it is to separate any "climate signal" from surrounding noise in the system.</p>

<p>The gauge below provides an assessment of Plausible 18-36 Month Materiality for the sector. This is not a prediction. Rather, it reflects both current materiality and the number of variables in play that might quickly shift perceptions of materiality.</p>

<h3>Mid-Term Sector Materiality, Excluding Systemic Risk</h3>

<p>The gauge shown below assesses the sectoral materiality of climate change over the next 10-15 years. Over this time period, it should become easier to separate any climate signal from the surrounding noise. Systemic risk is specifically excluded; it is addressed in another gauge below. </p>

<h3>Longer-Term Sector Materiality</h3>

<p>Over the longer term, climate change and potential responses to climate change are likely to become more material for most sectors. The gauge shown below broadly encompasses the period from 30-70 years into the future. While this time frame is well beyond the planning horizon for most companies, it is still a useful reference point for companies thinking about scenario planning. </p>

<h3>Sector Vulnerability to Systemic Climate Risk</h3>

<p>Systemic climate risk is a recent but important addition to the climate risk bookshelf (see the <a href="brain://api.thebrain.com/YMX-LCFjMk2kL_BK0z8Qkg/TRNwiCYun1eR-KM4sA3KwQ/SystemicRiskAsSpVariable">systemic climate risk page</a> for more information). Systemic risk is notable for the relative inability of companies to manage such risk on their own. They may be able to make themselves more resilient to systemic risk, but quickly hit limits in doing so. If disruptions in the global food sector resulting from extreme climate events led to political and economic disruption across the world, for example, that would be an example of systemic risk. This gauge assesses the vulnerability of the sector in question to systemic climate risk. </p>

<p>The analysis included in Sectoral Scenario Planning Profiles is not attempting to predict the future with respect to a sector's relationship to climate change. In line with scenario planning goals of the Guidebook, we are suggesting how climate change outcomes could influence the sector in the nearer as well as longer-terms. These assessments are not intended to be definitive and are not based on a quantitative methodology. Rather, they are based on a comprehensive review of relevant materials.</p>