In this webinar, ESG and Sustainability Consultant and Trainer Jia Xin Ng outlines the IFRS S2 climate risk reporting requirements and shares practical guidance on framework selection for Malaysian corporations. Climate Risk Scenario Analysis is particularly important for public listed companies under the National Sustainability Reporting Framework (NSRF), as it requires the assessment of potential financial impacts using structured scenarios aligned with IFRS S2.

Key Takeaways

1. Defining Climate Risk Scenario Analysis: Climate risk focuses on physical events such as rising temperatures, floods, and wildfires, while risk refers to their potential financial impact on a business. Scenario analysis evaluates “what if” situations using at least two or three scenarios, such as best, base, and worst case, with a clear focus on financial outcomes.
2. Available Frameworks for Scenario Selection: IFRS S2 does not mandate a specific framework, allowing flexibility in approach. Commonly used frameworks include IPCC for physical risks, NGFS for financial and transition risks, and IEA for energy-related transition scenarios and policy impacts.
3. Five Steps to Conducting the Analysis: The process involves identifying climate risks and opportunities, selecting scenarios and assumptions, assessing financial impacts, quantifying and reporting outcomes, and defining response strategies to support decision-making and build investor confidence.
4. Implementation Considerations: Companies may combine frameworks for a more comprehensive view while starting small and expanding over time. It is recommended to model a range of scenarios, and importantly, translate climate data into financial metrics for effective risk management.

To support implementation, Bernard Business Consulting offers the public workshop “Exploring IFRS S2 Climate Risk Scenario Analysis” on 4 June 2026, alongside a preparatory session “Bridging Sustainability and Finance with IFRS S1 and S2” on 3 June 2026.