Getting Comfortable with Climate Scenarios: A Qualitative Study on the Micro-Stage of Making the TCFD Scenario Analysis Auditable

Abstract: This study examines how the scenario analysis as an integral part of the novel TCFD framework is made auditable. Drawing upon the theoretical lens of Carrington and Catasús' (2007) comfort framework, we uncover professionals' discomforts with the TCFD scenario analysis and show how they address these discomforts to make the scenario analysis auditable. We illustrate conceptual challenges of forward-looking and quantified disclosures, which allow us to further develop our understanding of "making things auditable" (Power, 1996). Making things auditable consists of (1) creation of auditable environments and (2) negotiation of audit knowledge. We refine the concept of auditable environments by suggesting a distinction between actions performed "with" and "within" the auditable environment, where the latter refers to activities that do not change the auditable environment. Activities "within" can further be distinguished as adopted and adapted activities, where the latter are adjusted to a suboptimal auditable environment. Related to the negotiation of audit knowledge, we suggest a possible distinction between technical and "ritualistic" (Pentland, 1993) aspects of auditing and show how proximity between novel and legacy disclosures can impede auditability. Finally, we investigate the relationship between marketization and professionals' discomforts in making marketized disclosures auditable.