The document discusses climate-related reporting and futures studies, emphasizing their importance in addressing climate change and promoting sustainability. It outlines key instruments such as the Global Reporting Initiative (GRI), Carbon Disclosure Project (CDP), and Task Force on Climate-related Financial Disclosures (TCFD) used for reporting climate risks and opportunities. Additionally, it introduces various futures studies techniques that organizations can utilize to navigate uncertainties and develop strategic plans for a sustainable future.

2. TOO4TO MODULE
Climate Change and Sustainability
Part 3: Climate-related reporting and predicting the future
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3. PART 3 LEARNING OBJECTIVES
• To understand the purpose of climate-related reporting and its associated
reporting instruments;
• To explore the futures studies approach and its techniques to better
understand the change caused by major issues such as climate change and
to create better futures.
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4. PART 3 CONTENTS
Climate-related reporting
• Overview
• GRI
• CDP
• TCFD
Scenario analysis
• Overview
• TCFD-recommended steps
Futures studies
• Overview
• Delphi technique
• Futures Triangle
• Futures Wheels
• Causal Layered Analysis
• Backcasting
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5. CLIMATE-RELATED REPORTING
Overview; GRI; CDP; TCFD
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6. CLIMATE-RELATED REPORTING: OVERVIEW (1/3)
The severity of human-induced climate change to humanity and the environment has been
acknowledged in various reports by the Intergovernmental Panel on Climate Change (link), according
to which global warming may reach a 1.5°C increase already before 2040. Limiting the warming
between 1.5°C and 2°C above the pre-industrial levels is expected to reduce the probability of
extreme regional droughts, floods and global sea-level rise, and risks such as water shortages,
extreme heat waves, extinction of species, and depredation of regions’ industries such as agriculture,
fishing and coastal tourism.
Limiting global warming even to 2°C requires a substantial reduction in greenhouse gas (GHG)
emissions in every region and every industry. At the same time, organisations must prepare for the
various risks of climate change.
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7. CLIMATE-RELATED REPORTING: OVERVIEW (2/3)
Reasons for climate-related reporting:
• Stakeholders rarely have the opportunity to observe companies’ climate-related performance directly. This is
particularly true for companies that outsource large parts of their operations and operate in complex supply
chains.
• Investors, creditors, suppliers, employees, regulators, policy-makers and other stakeholders have different
reasons to be interested in companies’ climate-related information, i.e. how companies emit and mitigate their
emissions but also how climate change affects their business operations and how they plan to adapt to this
changing environment.
• Climate-related disclosures may improve companies’ performance for two reasons: 1) disclosures may be used
by stakeholders such as activists and non-governmental organisations to pressure polluters to change
behaviour; 2) disclosures enhance benchmarking, i.e. companies are induced to perform better than their
competitors.
(Herbohn & Clarkson, 2022)
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8. Examples of mandatory GHG emissions measurement and reporting initiatives include EU Emissions
Trading Scheme (EU ETS, see link).
Beyond such schemes and GHG reporting, the rationale is that most G20 jurisdictions and the EU mandate
large companies to disclose information about their material environmental impacts publicly. For many
companies, climate-related risks constitute such material information.
The credibility of companies’ climate-related disclosure is often associated with the use of external reporting
standards and frameworks, of which three important ones are the GRI, CDP and TCFD.
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CLIMATE-RELATED REPORTING: OVERVIEW (3/3)

9. CLIMATE-RELATED REPORTING: GRI (1/4)
• Global Reporting Initiative (GRI) is an independent, international organisation established in 1997,
offering a sustainability reporting framework for businesses and organisations.
• GRI has become the most widely recognised and used sustainability reporting framework in the
world.
• In 2016, GRI transitioned from guidelines to set the first global standards for sustainability reporting.
• “In the GRI Standards, the term ‘sustainability reporting’ refers to the process of reporting, which
starts with an organization determining its material topics based on its most significant impacts and
results in the organization publicly reporting information about these impacts” (GRI, 2022, p. 10).
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10. CLIMATE-RELATED REPORTING: GRI (2/4)
The GRI framework consists of:
• Universal Standards that all organisations
claiming compliance with the GRI must report;
• Sector Standards that apply to specific sectors;
The standards outline the topics that are likely
material for the sector’s companies and identify
disclosures to report on those topics;
• Topic Standards contain disclosures by topic
areas. Companies must report disclosures from
topics if they are identified and assessed to be
highly material to them (i.e., topics that represent
the most significant impacts on the economy,
environment, and people).
All GRI Standards are available at their website (link)
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11. CLIMATE-RELATED REPORTING: GRI (3/4)
The process of determining material topics is
depicted on the right.
The process is informed by the organisation’s
ongoing identification and assessment of
impacts, followed by prioritising the topics
representing the most significant impacts.
Based on this process, companies may need
to report specific information on their financial
implications due to climate change included
in GRI 201 Topic Standards and their
emissions whose disclosure requirements
are included in GRI 305 Topic Standards.
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12. CLIMATE-RELATED REPORTING: GRI (4/4)
Depending on the materiality assessment, a reporting organisation may need to report one or more of the following:
• Disclosure 201-2 Financial implications and other risks and opportunities due to climate change;
• Disclosure 305-1 Direct (Scope 1) GHG emissions;
• Scope 1 refers to emissions released as a direct result of a set of activities, at a firm level;
• Disclosure 305-2 Energy indirect (Scope 2) GHG emissions;
• Scope 2 refers to emissions released from the consumption of purchased electricity, steam, heat and cooling;
• Disclosure 305-3 Other indirect (Scope 3) GHG emissions;
• Scope 3 refers to emissions released in the value chain of the reporting company and linked to the company's operations;
• Disclosure 305-4 GHG emissions intensity;
• Disclosure 305-5 Reduction of GHG emissions;
• Disclosure 305-6 Emissions of ozone-depleting substances (ODS);
• Disclosure 305-7 Nitrogen oxides (NOX), sulfur oxides (SOX ), and other significant air emissions.
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13. CLIMATE-RELATED REPORTING: CDP
• CDP is a non-profit organisation that was established in 2000 to standardise the measurement of climate
change risks within the financial markets.
• CDP is a voluntary reporting as well as a rating system.
• CDP collects companies’ climate-related information through a questionnaire that companies respond to at
the request of institutional investors.
• The companies’ disclosure is then assessed and scored by the CDP from D- to A, indicating the following:
• D- and D (Disclosure level): organisation has responded to the questionnaire;
• C- and C (Awareness level): organisation has assessed its environmental impacts;
• B- and B (Management level): organisation has shown evidence of how it has managed its impacts;
• A- and A (Leadership level): organisation has shown best practices and actions as recognised by frameworks such as TCFD;
• F (Failure to disclosure) is assigned when a requested company fails to disclose through CDP.
• In 2021, over 13,000 organisations responded to CDP’s climate change questionnaire. You can explore
companies’ scores at the CDP responses page: www.cdp.net/en/responses/
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14. CLIMATE-RELATED REPORTING: TCFD
• The Financial Stability Board (FSB) developed TCFD (short for Task Force on Climate-Related
Financial Disclosures) to set recommendations for climate-related disclosure, published in a report
in 2017 (updated in 2021; link).
• The recommendations consist of disclosures structured around four areas: governance, strategy,
risk management, and metrics and targets, which are supported by guidance on specific disclosures
for all sectors and supplemented disclosures for certain sectors that organisations should include in
their mainstream corporate reporting.
• These disclosures provide decision-useful information for investors, lenders and insurers about the
reporting organisations’ financial risks and opportunities caused by their exposure to climate
change, whose probabilities are based on scenario analysis.
• Disclosing in line with the TCFD is mandatory in the UK and becoming mandatory in Switzerland
and New Zealand in 2024 and 2025, and proposals for mandating it are under way elsewhere, such
as the USA, Canada and Japan and countries in the EU.
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15. SCENARIO ANALYSIS
Overview; TCFD-recommended steps
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16. SCENARIO ANALYSIS: OVERVIEW (1/2)
• Scenario analysis is a well-established method for developing strategic plans to enhance flexibility
or resilience to various future states.
• Scenarios are hypothetical constructs. Their purpose is not to give a full description of alternative
futures but to highlight central elements of plausible futures and draw attention to the factors that
drive future developments.
• In practice, climate-related-scenario analysis means describing the impacts of different levels of
global warming on the business. While various scenarios exist, using a limited number of scenarios
is more feasible for the company. TCFD recommends using 2°C and considering other scenarios
most relevant to the organisation’s circumstances, such as business-as-usual, i.e. greater than 2°C.
Assessing these scenarios helps companies create strategies on how to adapt to different futures.
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17. SCENARIO ANALYSIS: OVERVIEW (2/2)
• Climate-related scenarios help develop an understanding of how the physical or transition risks
and opportunities associated with climate change might impact the business and its finances over
time.
• Physical risks may include “acute” physical damage from variations in weather patterns (e.g., severe storms, floods,
drought) or “chronic” impacts (e.g., sea level rise and desertification), which may affect businesses through interruptions or
damage to business operations or supply chains.
• Transition risks may include risks associated with the transition to a lower-carbon economy such as technology shift,
reputational risks stemming from public pressure to act and report on climate change, and regulatory and legal risks (e.g.
carbon disclosure and tax requirements).
• Scenario analysis can be qualitative, quantitative or both.
• Qualitative analysis looks into trends such as political developments. Organisations new to climate-related scenario
analysis usually start with qualitative narratives that help management explore different climate change implications.
• Quantitative analysis looks at numerical data and models, e.g. regional weather patterns or sea level rise at 2°C warming.
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18. SCENARIO ANALYSIS: TCFD-RECOMMENDED
STEPS
Scenario analysis is organisation-specific, it depends on the sector, geography, operations, supply chain, stakeholders etc. TCFD
recommended six steps for scenario analysis:
1. Ensure governance: integrate scenario analysis into strategic planning and engage correct stakeholders in the process.
2. Assess materiality of climate-related risks: assess what factors are significant to the organisation and its stakeholders:
1. What market and technological shifts are likely occur in a transition to low-carbon economy?
2. How do the climate risks affect the organisation’s reputation?
3. What policy and legal developments are likely to affect the organisation?
4. What physical risks, like draught, are possibly threatening the organisation?
3. Identify and define range of scenarios: identify all possible climate outcomes, including transition risks, like carbon tax, and
physical risks, like availability of water in dry areas.
4. Evaluate business impacts: evaluate each scenario’s impact on the organisation’s strategic and financial position, including
operational costs, supply chain, regulatory compliance costs, etc., identify potential responses: strategize responses to the
scenarios, e.g. invest in new technologies, make changes to the business model, processes and mix of portfolio.
5. Document and disclose: document the scenario analysis process and disclose it in the organisation’s annual reporting.
More on climate-related scenario analysis is available at TCFD’s website (link)
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19. FUTURES STUDIES
Overview; Delphi technique; Futures Triangle; Futures Wheels; Causal
Layered Analysis (CLA); Backcasting
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20. FUTURES STUDIES: OVERVIEW (1/4)
In addition to the scenario analysis described in the previous section, an array of other concepts and techniques
deriving from the emerging discipline of futures studies can help organisations better understand the change
process to create better futures.
Future studies is a study of possible, probable and preferred futures and the worldviews and myths that
underlie them. Many organisations start to think about the future only when something difficult happens. If
organisations do not predict, look for emerging issues, and anticipate what could happen, they continue to do
business as usual, which works only when the world is stable (Inayatullah in Metafuture, 2016)
As business-as-usual has disappeared – mainly due to the perception that the world is far riskier due to major
events, one of which is climate change, “futures studies” has been adopted increasingly by executive leadership
teams, planning departments, institutions and nations worldwide (Inayatullah, 2012)
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21. FUTURES STUDIES: OVERVIEW (2/4)
Although futures studies is often housed in the planning department in organisations, when compared with
planning, the futures approach:
• is longer-term, from 5 to 50 (even 1 000 years) instead of 1 to 5 years;
• links horizon three (20–30 years) with horizon two (5–20) and horizon one (the present to 5 years);
• is committed to authentic alternative futures where scenarios are fundamentally different from each other. When
planners and economic forecasters use scenarios, they are often mere deviations from each other;
• is committed to multiple interpretations of reality (legitimating various views instead of empirical data only);
• is more participatory in that it attempts to include all types of stakeholders instead of only powerbrokers;
• consciously uses different ways of knowing;
• is more concerned with the futures process;
• is more concerned with creating the future than simply predicting it; and
• is as much an academic field as it is a participatory social movement.
(Inayatullah, 2012)
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22. FUTURES STUDIES: OVERVIEW (3/4)
One of the pioneers in futures studies is professor Sohail Inayatullah who has advocated and developed various
futures studies techniques and created a conceptual framework called Six Pillars for understanding the future.
The following slides provide overviews of some of these techniques:
• The Delphi technique;
• Futures Triangle
• Futures Wheels;
• Causal Layered Analysis, and;
• Backcasting.
--
Read more about the Six Pillars approach in Inayatullah’s article: Six pillars: futures thinking for transforming (link).
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23. FUTURES STUDIES: OVERVIEW (4/4)
Watch a short video on what works in
Futures Studies (link)
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24. FUTURES STUDIES: DELPHI TECHNIQUE (1/3)
• The Delphi technique can be applied to many issues, including supporting decision-making and predicting
environmental impacts such as climate change.
• The technique comprises two or more rounds of structured questionnaires, each followed by an aggregation of
responses and anonymous feedback to the participating panel of ‘experts’ or other stakeholders.
• The major strength of this participatory technique is the reduced influence of social pressures among respondents,
which include:
• Groupthink: individuals in groups are inclined to seek consensus among the group at the expense of individual critical thinking;
• Halo effect: individuals misjudge others by concentrating on attributes that are irrelevant to the topic;
• Egocentrism: individuals rate their opinion higher than that of others;
• Dominance: individuals support the ideas of those with the ability to persuade or with higher status, although these attributes
are irrelevant to problem-solving.
(Mukherjee et al., 2015)
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25. FUTURES STUDIES:
DELPHI TECHNIQUE (2/3)
The general structure of the Delphi technique is illustrated on the right.
Several modifications of the technique exist. For example:
Scenario Delphi entails asking participants to project probable futures
based on their expertise. In its two modes: explorative scenario studies
aim to identify future challenges or adaptation options to issues such as
climate change, and; predictive scenario studies aim to clarify
judgements about predictions.
Policy Delphi seeks to elicit the breadth of common and divergent
views on particular policy, to identify priorities and potential solutions to
policy problems. The technique is useful for generating innovating
solutions to complex ecological challenges, such as climate change.
Different Delphi techniques can serve as a valuable complementary
method in topics with a high level of uncertainty and when conflicts of
interest between stakeholders exist and decisions or views cannot be
based only on established facts.
It cannot, however, substitute quantitative data, and conducting it can
be time-consuming, especially with large groups.
(Mukherjee et al., 2015)
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26. FUTURES STUDIES: DELPHI TECHNIQUE (3/3)
Watch a short video on Delphi Method
(link)
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27. FUTURES STUDIES: FUTURES TRIANGLE (1/3)
The futures triangle helps organisations to
map today’s views of the future through 3
dimensions:
1st is the vision of the future that pulls us forward
(e.g. stopping climate change);
2nd is the current quantitative drivers and trends
that push the organisation towards the future
(e.g. emission reduction measures);
3rd is the weight of the past that poses barriers
to change (e.g. short-termism).
(Inayatullah, 2008)
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28. FUTURES STUDIES: FUTURES TRIANGLE (2/3)
Extending the model allows us to map the gap
between the organisation’s desired vision and the
performance by asking the following 2 questions:
1) To reach the vision, what change path needs to
be taken over the next 5-20 years?;
2) After thinking about the last few years of the
organisation’s history, the plans, decisions and
results that have occurred, what change path is
the organisation actually on?
Assessing the two change paths gives indications
about the organisation’s prevailing behaviour and
behaviour needed to align with the desired future
vision.
(Insight & Foresight, 2022)
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29. FUTURES STUDIES: FUTURES TRIANGLE (3/3)
Read more and watch a short video on
the Futures Triangle (link)
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30. FUTURES STUDIES:
FUTURES WHEELS
The futures wheel helps organisations anticipate
future issues and understand the world at a
complex connected level: It does not stop at
immediate impacts but rolls along the second order
impact and so on, allowing us to explore and deduce
consequences.
For example, using the tool helps anticipate logical
implications of the construction of a new highway in
an undeveloped part of the city. While the economic
activity may increase, resulting in more jobs and
higher prices in the area, it may as well cause more
congestion and emissions, leading to health
problems, which may change the scenario in the other
direction.
(Inayatullah, 2008)
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31. FUTURES STUDIES:
CAUSAL LAYERED
ANALYSIS (1/2)
Causal Layered Analysis (CLA) helps to unpack
and deepens our understanding of the future. It is
a method that uses storytelling and narratives to
explore and construct possible futures. Using CLA
entails analysing issues embedded in a social setting
at four interconnected levels: litany, systemic causes,
worldview, and metaphors and myths. Each of these
levels is true and requires solutions.
The CLA can also be depicted as an iceberg, where
issues above and right below the surface level are
visible. Interventions at these levels are often short-
term and easy to grasp. The interconnected issues
below these levels become more broad and difficult to
identify, which is why making changes to them is
much harder and longer term.
(Inayatullah, 2008)
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32. FUTURES STUDIES: CAUSAL LAYERED ANALYSIS (2/2)
An example of the application of CLA to study congestion and pollution in large cities:
1. For cities, litany issues are often congestion and pollution. Possible solutions include expanding roads and regulating
emissions.
2. The systemic causes represent social, economic, and political underlying issues. Solutions here could focus on
travel choices and linking roads with rail.
3. At the worldview level, solutions to issues should not be considered within the existing conception of ‘large cities’, but
rather asking if the conception could be redefined, e.g., can the city be decentralised so there is no need to travel by
car? Can personal carbon credit cards be implemented to monitor one’s GHG emissions?
4. The metaphors and myth level deals with meanings that are often difficult to articulate. In the context of cities, the
deepest problem may be the notion of ‘bigger is better’. Making changes at this level is the hardest and takes the
longest.
(Inayatullah, 2008)
--
Short Read: Using Causal Layered Analysis for Transformational Change (link)
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33. FUTURES STUDIES: BACKCASTING (1/2)
Backcasting is an appropriate option when other
studies indicate that long-term developments will
likely lead to undesirable futures.
Backcasting works by moving individuals,
organisations, industries, regions or society into
particular future scenarios, e.g., the preferred
future or the worst case, and, secondly, moving
the perspective from the future to the present for
the definition of actions and objectives
necessary to reach the preferred future or to
avoid the worst-case scenario.
(Inayatullah, 2008; Neuvonen et al., 2015; Faldi & Macchi, 2017)
--
Short Read: Backcasting Smart City Futures (link)
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34. FUTURES STUDIES: BACKCASTING (2/2)
Watch a short video on Backcasting (link)
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35. THINKING EXERCISE
This thinking exercise can be done individually or in groups.
"What if?" Questions are an easy way to start thinking about future scenarios. In doing so, you try not to predict
but to think about it and thus possibly anticipate it. Below are two examples of such questions. You can be creative
with answering them and always add new ones.
1. What if climate change became the government’s number one priority?
Extra explanation: Due to various human-induced causes, the earth is warming further and further.
2. What if we no longer have fossil fuels (petrol, kerosine, diesel)
Extra explanation: Fossil fuels are one of our biggest sources of energy and emissions. According to scientists,
it is estimated that at this rate, we will run out of fossil fuels in 2060.
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36. REFERENCES
CDP (2022) Scoring Introduction 2022. Available at: https://cdn.cdp.net/cdp-production/cms/guidance_docs/pdfs/000/000/233/original/Scoring-
Introduction.pdf?
Faldi, G. and Macchi, S. (2017) ‘Knowledge for transformational adaptation planning: Comparing the potential of forecasting and backcasting methods for
assessing people’s vulnerability’, in Tiepolo, M., Alessandro, P., and Vieri, T. (eds) Green Energy and Technology, pp. 265–283. doi: 10.1007/978-3-319-
59096-7_13
GRI (2022) Consolidated Set of the GRI Standards. Available at: https://www.globalreporting.org/
Herbohn, K. F., Clarkson, P. M. and Wallis, M. (2022) ‘The state of climate change-related risk disclosures and the way forward’, in Adams, C. A. (ed.)
Handbook of Accounting and Sustainability. Edward Elgar Publishing Ltd., pp. 343–364. doi: https://doi.org/10.4337/9781800373518.00029.
Inayatullah in Metafuture (2016) What Works in Futures Studies (Part 1) [Video]. YouTube. https://www.youtube.com/watch?v=WTuIttajBOc
Inayatullah, S. (2008) ‘Six pillars: Futures thinking for transforming’, Foresight, 10(1), pp. 4–21. doi: 10.1108/14636680810855991. Available at:
https://www.foresightfordevelopment.org/sobipro/54/760-six-pillars-futures-thinking-for-transforming
Inayatullah, S. (2012) There’s a Future: Vision for a Better World, There’s A Future Vision For A Better World. BBVA. Available at:
https://www.bbvaopenmind.com/wp-content/uploads/2013/01/BBVA-OpenMind-Book-There-is-a-Future_Visions-for-a-Better-World-1.pdf
Insight & Foresight (2022) The Futures Triangle. Available at: https://www.insightandforesight.com.au/blog-foresights/futures-triangle
Mukherjee, N. et al. (2015) ‘The Delphi technique in ecology and biological conservation: Applications and guidelines’, Methods in Ecology and Evolution,
6(9), pp. 1097–1109. doi: 10.1111/2041-210X.12387
Neuvonen, A. et al. (2016) No Title. Helsinki. Available at: https://demoshelsinki.fi/julkaisut/nordic-cities-beyond-digital-disruption/ .
TCFD (2021) Task Force on Climate-related Financial Disclosures Implementing the Recommendations of the Task Force on Climate-related Financial
Disclosures. Available at: https://assets.bbhub.io/company/sites/60/2021/07/2021-TCFD-Implementing_Guidance.pdf
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