Scenario analysis
At a minimum in line with the strategic planning cycle, for example every three to five years.
¶22(b) disclosures may stay unchanged in years without a new analysis.Software · climate risk, cited
Climate risk software: what UK SRS S2 asks it to produce
Climate risk software identifies physical and transition risks, runs scenario analysis and produces the figures a climate disclosure needs.
UK SRS S2 sets the specification without naming a method, so this page sets out what it asks for, how much analysis fits your circumstances, and the tests that follow.
What the software does
What does climate risk software do? Five jobs, from hazard to disclosure
Climate risk software helps a company find out how climate change, and the response to it, could affect its business.
For a UK reporter the output is shaped by UK SRS S2, published by the Department for Business and Trade in February 2026.
The standard asks what the risks are, which kind each is, over what horizon, how resilient the strategy is under scenarios, and how much of the business is exposed.
It never names a model, a data provider or a product.
- 1
Map
Locate sites, assets and suppliers, and the activities that carry policy or market exposure.
- 2
Classify
Tag each risk physical or transition, with a short, medium or long horizon you define.
- 3
Model
Run scenarios against the map: hazards for physical risk, prices and policy for transition risk.
- 4
Measure
Turn results into the ¶29 amounts and percentages, and financial effects where they can be quantified.
- 5
Disclose
The resilience assessment, the scenarios used and their assumptions, ready for the report.
Physical or transition
What kinds of climate risk must a tool tell apart? Two, and two again
Under ¶10(b) of UK SRS S2 the entity explains, for each climate-related risk it identifies, whether it is a physical risk or a transition risk.
The standard’s defined terms split physical risk again: acute risk is event-driven, such as storms, floods, drought or heatwaves, and chronic risk comes from longer-term shifts in climatic patterns.
Transition risks arise from efforts to move to a lower-carbon economy, and include policy, legal, technological, market and reputational risks.
Under ¶10(c)–(d), each risk also needs a horizon, and the company defines short, medium and long term itself, linked to its own planning.
How S2 sorts climate riskExplore
How S2 sorts climate risk
Acute physical
Weather events such as storms, floods, drought or heatwaves.
How S2 sorts climate risk
Chronic physical
Longer-term shifts: precipitation, temperature, sea level, water availability.
How S2 sorts climate risk
Transition
Policy, legal, technological, market and reputational risks.
How S2 sorts climate risk
Horizon
Short, medium or long term, as the entity defines and links to its planning.
The ¶29 metrics
Which climate risk figures does S2 ask for? Amounts and percentages
¶29(b) transition risks
Amount and %Assets or business activities vulnerable¶29(c) physical risks
Amount and %Assets or business activities vulnerable¶29(d) opportunities
Amount and %Assets or business activities aligned¶29(f) internal carbon price
Price per tonneIf one is used in decisionsAmong the cross-industry metrics in ¶29 of UK SRS S2 are three that climate risk software exists to produce.
They are the amount and percentage of assets or business activities vulnerable to transition risks, the same for physical risks, and the amount and percentage aligned with climate-related opportunities.
Where the financial effect of a risk cannot be separately identified, or is too uncertain to be useful, ¶¶19–21 let the entity explain why instead of quantifying, and still ask for the qualitative effect.
| Output | Paragraph | What to check in a tool |
|---|---|---|
| Risks classed physical or transition, with horizons | ¶10(b)–(d) | Your horizons, not the vendor’s defaults |
| Assets vulnerable to transition risks | ¶29(b) | Amount and percentage, basis stated |
| Assets vulnerable to physical risks | ¶29(c) | Acute and chronic hazards both counted |
| Assets aligned with opportunities | ¶29(d) | Same denominator as (b) and (c) |
| Resilience assessment and scenarios used | ¶22, ¶B18 | Updated every reporting period |
| Explanation where effects are not quantified | ¶¶19–21 | Reason, qualitative effect and line items |
The emissions half of ¶29 is covered on climate disclosure software, and the internal carbon price on internal carbon price.
How much analysis
Does S2 require quantitative scenario analysis? It depends on you
UK SRS S2 ¶B2 asks for scenario analysis commensurate with the entity’s circumstances: its exposure to climate-related risks and the skills, capabilities and resources available to it.
¶B17 says an entity with a high degree of exposure and access to those resources is required to apply a more advanced quantitative approach; others may use qualitative scenario narratives.
¶B15 adds that qualitative information, alone or with quantitative data, can give a reasonable and supportable basis for the resilience assessment.
The checker beside this applies those paragraphs to your answers, which tells you how much software you need before you see a demonstration.
Which scenario-analysis approach fits you?
Two questions; the answer quotes the standard, not a vendor.
Nothing is stored or sent.
Scenarios and data
Which scenarios and data does a tool draw on? Named sets, dated
A scenario is only as useful as its source and its date, so a tool should name both on every run.
Commonly cited sets include the NGFS scenarios and the IEA’s Net Zero Emissions by 2050 Scenario, whose current vintage is in World Energy Outlook 2025.
The TCFD’s 2020 guidance, which UK SRS S2’s application guidance draws on, notes that most methodologies recommend three or four scenarios; it is guidance from a disbanded body, not a requirement.
For UK physical hazards, the Met Office’s UKCP18 projections and the Environment Agency’s flood risk service are public; the flood service gives the risk of an area, not a specific property.
Read the detailed guidance and references
BEIS’s 2022 non-binding guidance on the Companies Act CFD rules said scenario analysis should be at least qualitative; it does not bind a company reporting under UK SRS.
Nationally, the Climate Change Act 2008 s.56 requires a five-yearly UK Climate Change Risk Assessment; the Climate Change Committee published its CCRA4 independent assessment on 20 May 2026.
The standard’s own scenario paragraphs are on IFRS S2 scenario analysis.
Scenario sets and UK dataExplore
Scenario sets and UK data
NGFS scenarios
A reference scenario set for climate scenario analysis.
Scenario sets and UK data
IEA NZE
Net Zero Emissions by 2050; current vintage in WEO-2025.
How often
How often does the analysis run? Two clocks
¶B18 of UK SRS S2 lets the scenario analysis follow the strategic planning cycle, for example every three to five years.
The resilience assessment, though, is carried out annually, and its results are updated at every reporting date.
So a tool needs two speeds: a deep run when strategy is reset, and a lighter annual update that reuses and records the last run’s assumptions.
- 25 February 202601
- 1 January 202702
Comply or explain begins
For periods beginning on or after this date, for UKLR 6, 14, 15, 16 and 22. - Each reporting date03
UK SRS S2
¶B18
¶B18
Resilience assessment
Carried out annually, with its ¶22(a) results updated every reporting period.
A tool should support an annual refresh without a full re-run.The tests before you sign
Which questions test a climate risk tool? Eight, each tied to S2
Each question beside this names the paragraph it comes from and what a passing answer looks like.
Run them on your own sites and activities; a demonstration portfolio never has your boundary or your planning horizons.
This site has tested no products
Nothing on this page is a rating, ranking or recommendation of any product.
Climate risk demo questions · tick the ones you need
The pass tests are our reading of the cited provisions.
Nothing you tick is stored or sent.
The vendors
What do vendors say about ISSB and IFRS S2? In their own words
Many capable platforms support climate-related disclosure; the matrix below shows what each says on its own site, alphabetically, which ranks nothing.
What vendors say about one regime · read 11 October 2026 and 30 September–1 October 2026
Each cell is the vendor’s own description of itself, linked to the page it is on.
A missing claim is a question to put to the vendor in writing, not evidence that the product lacks the capability.
Vendor claims about scenario analysis and hazard data are not separately recorded in the registry, so ask each vendor which models and data sets it uses, and their vintage.
Four things to ask any vendorExplore
Four things to ask any vendor
Hazards
Which physical hazards, acute and chronic, and from which data set.
Four things to ask any vendor
Transition inputs
Carbon prices, policy and market assumptions, and their dates.
Four things to ask any vendor
Outputs
The ¶29(b)–(d) amounts and percentages, and the ¶22 resilience text.
For the board
Every climate risk must be named as physical or transition, measured, and re-tested for resilience every year.
| What we know | What to do first |
|---|---|
| S2 asks each risk to be classed physical or transition, with your horizons | Agree the horizons with strategy before buying anything |
| ¶29 asks the amount and percentage of assets exposed | Fix the asset list and its denominator |
| Quantitative analysis is required if you are highly exposed and resourced | Answer the two questions in the checker honestly |
| The resilience assessment is annual | Plan a light annual update and a deeper cycle |
Frequently asked
Climate risk software, answered
What is climate risk software?
Software that identifies a company’s climate-related risks and opportunities, models how they could affect its assets and operations under different scenarios, and produces the information a climate disclosure needs.
Products range from hazard data for each site to full scenario-analysis platforms.
Does UK SRS S2 require climate risk software?
No. UK SRS S2 sets out what to disclose and leaves the method to the company.
For listed companies in UKLR 6, 14, 15, 16 and 22 it applies on a comply-or-explain basis for periods beginning on or after 1 January 2027, under FCA PS26/19; for everyone else it is voluntary.
What is the difference between physical and transition risk?
UK SRS S2 defines physical risks as risks from climate change that are event-driven (acute: storms, floods, drought, heatwaves) or come from longer-term shifts in climatic patterns (chronic).
Transition risks arise from efforts to move to a lower-carbon economy: policy, legal, technological, market and reputational risks.
What climate risk metrics does UK SRS S2 ask for?
Among the cross-industry metrics in ¶29: the amount and percentage of assets or business activities vulnerable to transition risks, the same for physical risks, and the amount and percentage aligned with climate-related opportunities.
Is quantitative scenario analysis required?
It depends on circumstances.
UK SRS S2 asks for an approach commensurate with the entity’s exposure and resources.
An entity with a high degree of exposure and access to the skills, capabilities or resources is required to apply a more advanced quantitative approach; others may use qualitative narratives.
How often must scenario analysis be done?
The analysis may follow the strategic planning cycle, for example every three to five years, but UK SRS S2 ¶B18 requires the resilience assessment to be carried out annually and its results updated at each reporting period.
Which climate scenarios should a tool use?
UK SRS S2 prescribes none.
Commonly cited reference sets include the NGFS scenarios and the IEA’s Net Zero Emissions by 2050 Scenario, whose current vintage is in World Energy Outlook 2025.
TCFD’s 2020 guidance notes most methodologies recommend three or four scenarios.
Where does UK physical climate data come from?
Two commonly used public sources are the Met Office’s UK Climate Projections (UKCP18) and the Environment Agency’s long-term flood risk service, which gives the risk of an area, not a specific property.
What is the difference between climate risk software and climate disclosure software?
Climate risk software does the analysis: hazards, exposure, scenarios.
Climate disclosure software turns analysis and emissions into the disclosure document.
Many platforms do both; ask which parts are native and which come from a data partner.
Does the UK government assess climate risk too?
Yes, for the country: the Climate Change Act 2008 s.56 requires a UK Climate Change Risk Assessment every five years.
The Climate Change Committee published its independent assessment for CCRA4 on 20 May 2026. It is national context, not a company’s disclosure.
What about real estate transition risk?
CRREM publishes carbon and energy intensity pathways by country and property type; its primary output is the misalignment year, when a building’s trajectory crosses its pathway. It is one input a property company’s transition-risk analysis may use.
Has this site tested any climate risk software?
No. The tests on this page are written from UK SRS S2 and the public data owners, and the vendor matrix quotes what each vendor says about itself.
Sources
Primary sources
Every requirement on this page traces to UK SRS S2 or the data owner listed here.
Checked against 16 sources fromDepartment for Business and TradeFinancial Conduct AuthorityIFRS FoundationTask Force on Climate-related Financial Disclosures (FSB)BEISNetwork for Greening the Financial System
- Department for Business and TradeUK SRS S2 Climate-related Disclosures (PDF), ¶10, ¶22, ¶29 and Appendix A
Physical or transition, time horizons, the ¶29 metrics and the defined terms.
- Department for Business and TradeUK SRS S2, Appendix B ¶¶B1–B18
Scenario analysis commensurate with circumstances; annual resilience assessment.
- Department for Business and TradeUK Sustainability Reporting Standards S1 and S2
Published 25 February 2026 for voluntary use.
- Department for Business and TradeUK SRS S1 General Requirements (PDF)
The general requirements S2 sits within.
- Financial Conduct AuthorityPS26/19 — aligning listed issuers’ sustainability disclosures
Comply or explain for UKLR 6, 14, 15, 16 and 22, periods from 1 January 2027.
- IFRS FoundationIFRS S2 Climate-related Disclosures
The international text UK SRS S2 is based on.
- Task Force on Climate-related Financial Disclosures (FSB)Guidance on Scenario Analysis for Non-Financial Companies (October 2020)
“Three or four scenarios”; guidance from a disbanded body, never a requirement.
- BEISMandatory climate-related financial disclosures: non-binding guidance (February 2022)
Scenario analysis under the Companies Act CFD rules.
- Network for Greening the Financial SystemNGFS Scenarios Portal
A reference scenario set for climate scenario analysis.
- International Energy AgencyWorld Energy Outlook 2025: Net Zero Emissions by 2050
The current vintage of the NZE Scenario.
- Met OfficeUK Climate Projections (UKCP18)
Climate model projections for the UK.
- Environment AgencyCheck your long term flood risk
The flood risk of an area, not a specific property.
- legislation.gov.ukClimate Change Act 2008, section 56
The five-yearly UK Climate Change Risk Assessment.
- CRREM FoundationHow to use CRREM
Real-estate transition-risk pathways and the misalignment year.
- GHG Protocol (WRI, WBCSD)A Corporate Accounting and Reporting Standard
The emissions base under UK SRS S2 ¶29(a).
- Financial Reporting CouncilSustainability reporting developments: FAQs
The FRC’s position on UK SRS and listed companies.