IFRS S2
Climate scenario and financial impact analysis
The hardest requirement in Part D is the one that asks what climate change will do to your numbers. We run scenario analysis that produces defensible figures and documented assumptions, rather than a heat map.
From qualitative narrative to quantified effect
Most first-generation climate disclosure stops at describing risks as high, medium or low. IFRS S2 pushes further: the current and anticipated financial effects of climate-related risks and opportunities, and how resilient your strategy is under different climate futures. For a Hong Kong issuer, that means putting numbers against things like a typhoon shutting a logistics hub, a carbon price landing on an energy-intensive process, or a customer's decarbonisation commitment reshaping demand.
How we approach it
- Scenario selection appropriate to your sector, drawing on recognised reference pathways rather than invented ones
- Physical risk screening by asset and location — relevant across the Pearl River Delta and wider Asian operations
- Transition risk assessment covering policy, technology, market and reputational drivers
- Time horizons aligned to your planning and capital cycles, not arbitrary decades
- Quantification of financial effects with the assumptions stated and the sensitivities shown
- A resilience assessment your board can interrogate and, if necessary, disagree with
Assumptions you can defend
The value of scenario analysis lies almost entirely in whether the assumptions are visible. We deliver a working model with every input, source and judgement documented, so that when an investor, auditor or director asks where a number came from, the answer takes a minute rather than a week. Analysis that arrives as a finished PDF with no model behind it cannot survive that question.
Scenario analysis is where over-reliance on AI is most obviously damaging and hardest to spot from the outside. Plausible-sounding pathways, generic sector assumptions and confident percentages that trace back to nothing will pass a casual read and fail the first informed challenge.
What the engagement includes
- Scenario framing workshop with management
- Asset-level physical risk screening
- Transition risk assessment across policy, technology, market and reputation
- Financial quantification model with documented inputs and sensitivities
- Strategic resilience assessment
- Board-ready presentation of findings
- Disclosure text aligned to IFRS S2 and HKEX Part D
Who this is for
LargeCap issuers with mandatory Part D obligations; capital-intensive and asset-heavy businesses; groups with operations exposed to physical climate risk across Asia; companies whose existing scenario analysis has been questioned.
Request a quotationCommon questions
How many scenarios do we need?
Usually two or three, chosen to bracket meaningfully different futures rather than to fill a table. What matters more than the count is whether each one is internally consistent and whether your response to it differs.
Our business is asset-light. Is physical risk still relevant?
Often through the value chain rather than your own premises — a single supplier, port or data centre in an exposed location can matter more than your office. Screening tells you where to look rather than assuming the answer.
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Read moreReady to scope this?
Tell us your listing status and reporting year end. We come back with a defined scope, a fee and a realistic timeline — not a brochure.