TNFD discussion paper on conducting advanced scenario analysis

This document is a discussion paper that describes approaches to advanced scenario analysis. It builds on the TNFD's fundamental guidance on scenario analysis. It is primarily intended for experienced scenario users in financial institutions and large multinational enterprises interested in advanced methods of nature-related scenarios. This can include those taking action in anticipation of regulatory stress tests, as has happened with climate-related risk assessment.

Key Areas of Focus

• A comprehensive view of three phases of scenario development, tailored for advanced assessments.
• A practical step-by-step summary of the implementation of each phase.
• Examples of developing and applying scenarios for different use cases using the IPR FPS + Nature approach as an illustration.
• Summary of recommendations and guidance on nature-related scenarios in frameworks and norms.

Key results
- Encourage feedback to the TNFD on the development of guidance on advanced scenarios.
- Enable financial institutions and large corporations to use advanced scenarios to explore the implications of uncertainties, assess risks, set transition goals and plans, and test the resilience of their strategies.
- Support the action of financial institutions in anticipation of regulatory stress tests on nature-related risks, as has happened with the assessment of climate-related risks.