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As if the regulatory patchwork wasn’t complex enough, you can’t lose sight of investor demands, which the Cooley alert noted may drive further utilization of ISSB’s IFRS S-1 and S-2. You may also need to consider what tools investors use when assessing their own exposure to climate-related risk and how their investments in portfolio companies impact their risk exposure — even if you’re not using or disclosing how you use those tools. For example, ISS ESG, the sustainable investment arm of ISS STOXX, just announced last week that it’s expanding its suite of suite of Climate Solutions, which are intended to “help investors gain a better understanding of their exposure to climate-related risks and gain insights in managing their investment portfolios,” with a new Scenario Analysis Dataset.

The new dataset covers around 30,000 issuers. The outputs, such as Implied Temperature Rise or cross point year metrics, are based on the comparison of Scope 1, 2 and 3 emissions projections with sector- and region-specific pathways. The different approaches to emissions projections and the range of pathways contribute to an in-depth forward-looking analysis of climate-related risks and opportunities, at medium and long-term time horizons. For instance, ‘realized’ emissions and emissions projections that include issuers’ targets will allow investors to assess the level of ambition of, and progress towards, their own disclosed GHG reduction target.

Leading public climate pathways incorporated in the new Scenario Analysis Dataset include the International Energy Agency’s World Energy Outlook 2022 (IEA), The United Nations Environment Programme’s One Earth Climate Model (OECM) and the Network for Greening the Financial System (NGFS) Climate Scenarios Phase 3. The set also captures the Net Zero emissions by 2050 scenarios based on the Glasgow Financial Alliance for Net Zero (GFANZ) recommendations.

Companies that incorporate scenario analysis to assess the impact of climate-related risks or are considering doing so may want to dig deeper on the new Climate Scenario Analysis dataset to understand what information will be provided to ISS clients and how this may impact their portfolios.

– Meredith Ervine