The Role of Scenario Analysis : Facilitation of the scenario analysis process with implementation guidance for organizations

Abstract: Organizations face multiple types of climate-related risks and opportunities. This creates financial and strategic challenges for organizations to solve, thus creating different frameworks, such as the Task Force on Climate-Related Financial Disclosures (TCFD), that support organizations and increases their financial stability and strategic resiliency. Within the TCFD recommendations and current regulations, scenario analysis is a strong tool to be used and reported on, to increase the transparency and resiliency further. Therefore, this degree project takes a deep dive into what role scenario analysis has concerning organizations, specifically the battery manufacturing industry, and examines the possibilities to facilitate the deployment of the scenario analysis process, aligned with the TCFD recommendations. Meaning that the guidance created addresses the current gap in research and scenario implementation. The results of this degree project indicate that scenario analysis holds a big role in all organizations because of its benefits. Scenario analysis increases the overall understanding regarding uncertainties, improves the anticipation of climate-related risks and opportunities and it enhances the understanding related to the interconnections and dependencies between them. Most importantly, scenario analysis supports organizations with decision-making and strategic planning by looking into how risks and opportunities develop in multiple scenarios and time horizons. The results also indicate that the battery manufacturing industry can face multiple risks and opportunities at each step of the value chain. Furthermore, this degree project presents a step-by-step implementation guidance that facilitates the scenario analysis process aligned with TCFD recommendations.