Corporate competition in climate scenario analysis: Current challenges and solutions
The Task Force on Climate-related Financial Disclosures (TCFD) and IFRS (International Financial Reporting Standards) S2 Climate-related Disclosures alignments have recently emerged as a main driving force for companies to disclose climate-related risks. In this context, climate scenario analysis ha...
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| Format: | Article |
| Language: | English |
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Elsevier
2025-12-01
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| Series: | Climate Services |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S2405880725000652 |
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| author | Chia-Chi Lee Shih-Yu Lee Shih-Yun Kuo Huang-Hsiung Hsu Ya-Ting Kuo Mu-Xing Lin Chung-Pei Pien Kuei-Tien Chou Yi-Ting Tsai |
| author_facet | Chia-Chi Lee Shih-Yu Lee Shih-Yun Kuo Huang-Hsiung Hsu Ya-Ting Kuo Mu-Xing Lin Chung-Pei Pien Kuei-Tien Chou Yi-Ting Tsai |
| author_sort | Chia-Chi Lee |
| collection | DOAJ |
| description | The Task Force on Climate-related Financial Disclosures (TCFD) and IFRS (International Financial Reporting Standards) S2 Climate-related Disclosures alignments have recently emerged as a main driving force for companies to disclose climate-related risks. In this context, climate scenario analysis has a direct impact on future quantitative climate risks, and therefore plays a pivotal role in the technical aspects of climate-related risk disclosures. To effectively comply with world trend in climate risk disclosures, competent authorities in Taiwan now encourage major companies to actively align with the TCFD and IFRS S2. However, many firms fell into the myth of the “climate scenario analysis competition”, leading major companies to compete to display various scenario analysis results in their reports. While learning from each other, they tend to lose sight of their own needs, avoiding crucial issues and omitting the truly important information. This study uses the industry chain of climate services as an analytical framework to conduct stakeholder interviews to explore the difficulties companies face in accurately disclosing their climate risks and in conducting scenario analysis, and also examine the role played by public climate service providers. The research results show that standard operating procedures (SOP) for scenario analysis in different industries, customized climate scenario production and analysis, and the cultivation of public and private climate service providers are all indispensable for overcoming challenges currently facing effective corporate climate scenario analysis. |
| format | Article |
| id | doaj-art-4328d6dc35f14292b9c7b42264ea11df |
| institution | Kabale University |
| issn | 2405-8807 |
| language | English |
| publishDate | 2025-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Climate Services |
| spelling | doaj-art-4328d6dc35f14292b9c7b42264ea11df2025-08-25T04:14:36ZengElsevierClimate Services2405-88072025-12-014010060410.1016/j.cliser.2025.100604Corporate competition in climate scenario analysis: Current challenges and solutionsChia-Chi Lee0Shih-Yu Lee1Shih-Yun Kuo2Huang-Hsiung Hsu3Ya-Ting Kuo4Mu-Xing Lin5Chung-Pei Pien6Kuei-Tien Chou7Yi-Ting Tsai8Research Center for Environmental Changes, Academia Sinica, Taipei, TaiwanResearch Center for Environmental Changes, Academia Sinica, Taipei, Taiwan; Corresponding author at: Research Center for Environmental Changes, Academia Sinica, 128 Academia Road, Section 2, Nankang, Taipei 115201, Taiwan.Research Center for Environmental Changes, Academia Sinica, Taipei, TaiwanResearch Center for Environmental Changes, Academia Sinica, Taipei, TaiwanDepartment of Marketing and Distribution Management, Asia Eastern University of Science and Technology, Taipei, TaiwanResearch Center for Environmental Changes, Academia Sinica, Taipei, Taiwan; Risk Society and Policy Research Center, National Taiwan University, Taipei, TaiwanInternational College of Innovation, National Chengchi University, Taipei, TaiwanRisk Society and Policy Research Center, National Taiwan University, Taipei, Taiwan; Graduate Institute of National Development, National Taiwan University, Taipei, TaiwanTaiwan Green Productivity Foundation, Taipei, TaiwanThe Task Force on Climate-related Financial Disclosures (TCFD) and IFRS (International Financial Reporting Standards) S2 Climate-related Disclosures alignments have recently emerged as a main driving force for companies to disclose climate-related risks. In this context, climate scenario analysis has a direct impact on future quantitative climate risks, and therefore plays a pivotal role in the technical aspects of climate-related risk disclosures. To effectively comply with world trend in climate risk disclosures, competent authorities in Taiwan now encourage major companies to actively align with the TCFD and IFRS S2. However, many firms fell into the myth of the “climate scenario analysis competition”, leading major companies to compete to display various scenario analysis results in their reports. While learning from each other, they tend to lose sight of their own needs, avoiding crucial issues and omitting the truly important information. This study uses the industry chain of climate services as an analytical framework to conduct stakeholder interviews to explore the difficulties companies face in accurately disclosing their climate risks and in conducting scenario analysis, and also examine the role played by public climate service providers. The research results show that standard operating procedures (SOP) for scenario analysis in different industries, customized climate scenario production and analysis, and the cultivation of public and private climate service providers are all indispensable for overcoming challenges currently facing effective corporate climate scenario analysis.http://www.sciencedirect.com/science/article/pii/S2405880725000652Climate scenario analysisClimate scenario analysis competitionClimate risk disclosureClimate service providersClimate disclosure anxietyTCFD |
| spellingShingle | Chia-Chi Lee Shih-Yu Lee Shih-Yun Kuo Huang-Hsiung Hsu Ya-Ting Kuo Mu-Xing Lin Chung-Pei Pien Kuei-Tien Chou Yi-Ting Tsai Corporate competition in climate scenario analysis: Current challenges and solutions Climate Services Climate scenario analysis Climate scenario analysis competition Climate risk disclosure Climate service providers Climate disclosure anxiety TCFD |
| title | Corporate competition in climate scenario analysis: Current challenges and solutions |
| title_full | Corporate competition in climate scenario analysis: Current challenges and solutions |
| title_fullStr | Corporate competition in climate scenario analysis: Current challenges and solutions |
| title_full_unstemmed | Corporate competition in climate scenario analysis: Current challenges and solutions |
| title_short | Corporate competition in climate scenario analysis: Current challenges and solutions |
| title_sort | corporate competition in climate scenario analysis current challenges and solutions |
| topic | Climate scenario analysis Climate scenario analysis competition Climate risk disclosure Climate service providers Climate disclosure anxiety TCFD |
| url | http://www.sciencedirect.com/science/article/pii/S2405880725000652 |
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