What is ESG analytics?

ESG analytics is the analysis and visualization of environmental, social, and governance data to measure performance, track progress against targets, benchmark against peers, and identify disclosure gaps. It converts raw ESG data into insight that supports decision-making and strategy.

How is ESG analytics different from ESG reporting?

ESG reporting is about disclosing performance to stakeholders in a structured report; ESG analytics is about interpreting the underlying data to understand trends, risks, and opportunities. Analytics informs strategy and target-setting, while reporting communicates results. EcoActive provides both.

What can ESG analytics show?

ESG analytics can show performance against targets and KPIs, trends over time, peer and industry benchmarks, risk factors, and gaps in disclosure. Dashboards aggregate data from multiple frameworks so teams can view and interpret it in one place.

Does ESG analytics support peer benchmarking?

Yes. Benchmarking ESG performance against peers and industry references helps companies gauge the effectiveness of their initiatives and identify areas for improvement. EcoActive includes peer benchmarking in its analytics.

How does EcoActive's ESG analytics work?

EcoActive collects and organizes ESG data from multiple sources, tracks KPIs, visualizes performance through real-time dashboards, benchmarks against peers, and aligns outputs with frameworks such as CDP, and TCFD, enabling data-driven decisions and continuous improvement.

Who uses ESG analytics?

Sustainability, finance, and risk teams use ESG analytics to monitor performance, prepare for disclosure, engage stakeholders, and inform strategy, particularly as ESG data becomes central to investment and regulatory decisions.

What is double materiality?

Double materiality assesses ESG issues from two directions: financial materiality (how sustainability issues affect the company's financial position and performance) and impact materiality (how the company affects the environment and society). A topic is material if it is significant from either perspective.

What is the difference between double materiality and single materiality?

Single materiality — used by ISSB standards (IFRS S1/S2) — asks only whether sustainability issues affect the company financially. Double materiality adds a second dimension: how the company affects the world. Under CSRD, both must be assessed.

Is double materiality mandatory?

Yes, under the EU's Corporate Sustainability Reporting Directive (CSRD), companies in scope must conduct a double materiality assessment following the European Sustainability Reporting Standards (ESRS). Other frameworks, such as ISSB, currently focus primarily on financial materiality.

What is financial materiality vs impact materiality?

Financial materiality is about sustainability matters that affect enterprise value and financial performance. Impact materiality is about the company's actual or potential effects on the environment and society. Double materiality requires reporting on a topic if it is material under either lens.

Is a topic in scope if it is only financially material, not impact material?

Yes. Under ESRS, a topic triggers disclosure obligations if it is material from either or both perspectives. Financial materiality alone is sufficient.

What are the main challenges of a double materiality assessment?

The main challenges are the expanded reporting scope and the difficulty of gathering and communicating a broad spectrum of data on the company's impacts on people, the environment, and society. Software that structures stakeholder input, scoring, and ESRS topic mapping reduces this burden.

How long does a double materiality assessment typically take?

For first-time adopters working manually, 3 to 6 months is typical — depending on value chain complexity and stakeholder engagement scope. EcoActive's structured workflow significantly reduces this timeline.

Does the DMA need board sign-off?

ESRS 1 requires governance over the DMA process. In practice, material topics should be reviewed and endorsed by senior governance — typically the audit committee or sustainability committee — before the sustainability statement is approved.

Does the DMA have to be repeated every year?

Yes, with proportionality. Companies must reassess each reporting period, but ESRS 1 allows a lighter-touch update if circumstances have not materially changed. Thresholds and methodology documentation must still be maintained.

What is the value chain scope for a CSRD DMA?

ESRS 1 requires assessment across the full value chain — upstream (suppliers, raw materials, contracted workers), own operations, and downstream (distributors, retailers, end-users, product end-of-life). Proportionality applies to depth of assessment across tiers.

What happens if our DMA is challenged during assurance?

Limited assurance under CSRD covers the process and documentation of the DMA, not just its conclusions. Gaps in stakeholder evidence or undocumented thresholds can result in a qualified opinion. EcoActive's audit and review capabilities are designed to address this — with full documentation exports structured for assurance.

How does EcoActive support double materiality assessments?

EcoActive maps financial and impact materiality across all ESRS topics, structures stakeholder engagement and scoring, and integrates the results directly into CSRD-aligned reporting, making the assessment repeatable and audit-ready.

Climate Scenario Analysis

Climate Scenario Analysis Software for Climate Risk and Resilience

Climate Scenario Analysis helps organizations assess how different plausible climate futures could affect their operations, assets, value chain, financial performance, strategy, and business model.

EcoActive connects climate scenarios with physical and transition risks, assumptions, time horizons, business exposure, supporting evidence, and disclosure — helping reporting teams turn scenario analysis into a governed and traceable climate-risk process.

What Is Climate Scenario Analysis?

Climate Scenario Analysis is a forward-looking assessment used to understand how a business could perform under different plausible climate-related conditions. It is not a prediction of exactly what will happen.

Instead, it tests the organization against different possible futures to answer a more useful question:

How resilient is our business if climate conditions, regulation, technology, energy markets, or the economy develop differently from today?

PHYSICAL CLIMATE RISK

What Happens as the Physical Climate Changes?

Physical risks arise from climate-related hazards and longer-term changes in climate conditions. These can include:

Flooding
Storms
Wildfires
Drought
Heatwaves
Rising temperatures
Changing rainfall patterns
Water stress
Sea-level rise

Physical climate risks can affect assets, facilities, business continuity, supply chains, resources, and operating costs.

TRANSITION CLIMATE RISK

What Happens as the Economy Transitions?

Transition risks arise as economies move toward lower-carbon models. They can result from changes in:

Climate regulation
Carbon pricing
Energy systems
Technology
Consumer behaviour
Markets
Litigation
Industry expectations

IFRS S2 & ESRS E1 | CLIMATE SCENARIO ANALYSIS
What Do the Standards Require?

Climate scenario analysis is addressed by both IFRS S2 Climate-related Disclosures and ESRS E1 Climate Change.
The requirements differ.
IFRS S2 requires climate-related scenario analysis to inform the assessment of climate resilience, using an approach commensurate with the organization's circumstances.
Under revised ESRS E1-2 — Identification of Climate-related Risks and Scenario Analysis, organizations identify and assess physical and transition climate risks. Where scenario analysis is used, the standard requires information about the scenarios, scope, assumptions, and timing of the analysis.

Classify Climate Risks

Identify whether material climate-related risks are: Physical risks & Transition risks

Assess Exposure

Assess how assets and business activities may be exposed and sensitive to climate hazards or transition events.The analysis can extend across own operations as well as upstream and downstream value chain activities.

Assess Different Time Horizons

Evaluate risk over: Short term, Medium term, Long term. Climate exposure can change significantly depending on the time period being assessed

Select Relevant Scenarios

Where scenario analysis is used, select scenarios that are relevant to the climate risks being assessed. Revised ESRS E1 refers to consideration of a high-emission scenario for physical risk and a 1.5°C-aligned scenario for transition risk when scenario analysis is performed.

Document Assumptions

Relevant assumptions can include: Public policy, Macroeconomic trends,Regional variables, Energy use, Energy mix, Technology developments

Assess Climate Resilience

The outcome should help the organization understand the extent to which its strategy and business model can respond and adapt to material climate-related risks.

What Are You Assessing Against?

Climate Risk Area	Examples	Potential Business Effect
Acute physical risk	Flood · Storm · Wildfire · Heatwave	Asset damage · Operational disruption
Chronic physical risk	Rising temperature · Water stress · Sea-level rise	Resource constraints · Asset exposure
Policy and legal risk	Carbon pricing · Climate regulation	Compliance costs · Investment requirements
Technology risk	New energy systems · Low-carbon technologies	Asset obsolescence · New capital needs
Market risk	Energy prices · Customer demand · Commodity shifts	Revenue · Costs · Market position
Reputation risk	Climate commitments · Stakeholder expectations	Brand · Customers · Capital access

HOW IT WORKS

Climate Scenario Analysis: Step by Step

A scenario only becomes useful when its assumptions can be connected with real business exposure.

1. Define the Scope

Determine which parts of the organization should be assessed.This can include: a) Assets b) Facilities c) Business units d) Geographies e) Operations f) Value chain dependencies

2. Identify Relevant Climate Risks

Identify the physical climate hazards and transition events that could affect the organization across its operations, assets, locations, and value chain. These risks provide the basis for selecting relevant climate scenarios and assessing exposure across different time horizons.The findings from climate risk and scenario analysis can then inform the organization’s Double Materiality Assessment, particularly the assessment of climate-related financial risks and opportunities.

3. Select Scenarios

Select scenarios that represent sufficiently different plausible climate futures.Organizations may use recognised external scenario sources where appropriate.The NGFS Climate Scenarios provide pathways combining climate transition assumptions, physical climate impacts, and macro-financial variables.

4. Define Time Horizons

Determine the short-, medium-, and long-term periods relevant to the organization.Different risks may emerge or become more severe at different points in time.

5. Define Assumptions and Variables

Capture the key assumptions underlying each scenario.These may include: a) Temperature pathways b) Climate hazards c) Carbon prices d) Energy prices e) Energy mix f) Policy developments g) Technology adoption h) Macroeconomic conditions

6. Assess Exposure and Sensitivity

Assess how the organization could be affected under each scenario.Evaluate relevant assets, operations, locations, activities, and dependencies against the identified hazards and transition events.

7. Assess Resilience

Consider what the analysis means for the organization's:a) Strategy b) Business model c) Operations d) Financial performance e) Risk response f) Ability to adapt

8. Document the Analysis

Maintain the methodology, scenario sources, assumptions, results, limitations, supporting evidence, and review history behind the assessment.

How EcoActive Structures Climate Scenario Analysis

Scenario analysis can quickly become fragmented across climate models, spreadsheets, risk registers, locations, assumptions, and supporting files. EcoActive brings these components into the same governed reporting environment.

Scenario Management

Maintain scenarios together with their sources, pathways, variables, assumptions, and time horizons.

Physical Risk Assessment

Assess exposure to climate-related physical hazards across relevant business activities and locations.

Transition Risk Assessment

Assess exposure to policy, regulatory, technological, market, and other transition developments.

Business Exposure Mapping

Connect climate risks with relevant:
Locations & Entities

Dynamic Parameters

Ensure transparent assumptions and dynamic parameters so reviewers can understand the calculations and how input changes affect scenario results.

Scenario Comparison

Compare how risk exposure changes across scenarios
and time horizons.

How Climate Scenario Analysis Connects to Disclosure

Scenario Analysis Element	Reporting Connection
Climate hazards	Physical climate risk
Transition events	Transition climate risk
Time horizons	Short-, medium- and long-term exposure
Scenario assumptions	Methodology
Business exposure	Climate-related risks
Scenario results	Climate resilience
Supporting evidence	Review and assurance
Conclusions	ESG and climate disclosure

This creates a connected path:

Scenario → Climate Risk → Exposure → Business Effect → Resilience → Disclosure

Why EcoActive for Climate Scenario Analysis?

01 Built Around Climate Disclosure

EcoActive connects scenarios with risks, assumptions, exposure, supporting evidence, and reporting requirements rather than leaving scenario analysis as a standalone modelling exercise.

02 Physical and Transition Risk in One Process

Assess physical and transition risks across different scenarios and time horizons while maintaining the context behind each assessment.

03 Defensible From Assumption to Disclosure

Maintain scenario sources, assumptions, methodologies, evidence, reviews, and disclosure connections so teams can explain how climate conclusions were reached.

As an AI-native Financial and ESG Disclosure Management platform, EcoActive keeps AI within governed reporting workflows while maintaining human review and accountability.

Frequently Asked Questions

What is Climate Scenario Analysis?

Climate Scenario Analysis is a forward-looking assessment that evaluates how an organization could be affected under different plausible climate futures. It helps companies understand climate risk and assess the resilience of their strategy and business model.

Is Climate Scenario Analysis the same as forecasting?

No. Forecasting generally estimates a likely future outcome. Climate Scenario Analysis explores multiple plausible futures to understand uncertainty, risk exposure, and potential business effects.

Does IFRS S2 require Climate Scenario Analysis?

Yes. IFRS S2 requires an entity to use climate-related scenario analysis to inform its assessment of climate resilience. The approach should be commensurate with the organization’s circumstances. Learn more from the IFRS Foundation’s IFRS S2 guidance.

What does ESRS E1 say about Climate Scenario Analysis?

Revised ESRS E1 requires organizations to identify and assess physical and transition climate risks. Where climate-related scenario analysis is used, organizations disclose information about the scenarios, scope, assumptions, and timing of the analysis.

What is the difference between physical and transition climate risk?

Physical climate risks result from climate-related hazards and longer-term changes in climate conditions. Transition risks arise from regulatory, policy, technological, market, and economic changes associated with the shift toward a lower-carbon economy.

What data is used in Climate Scenario Analysis?

Inputs depend on the organization and the risks being assessed. They may include asset locations, climate hazards, temperature pathways, carbon prices, energy use, energy mix, policy assumptions, technology changes, and macroeconomic variables.

What are RCP climate scenarios?

Representative Concentration Pathways (RCPs) are greenhouse gas concentration trajectories defined by the IPCC, ranging from RCP2.6 (low emissions) to RCP8.5 (high emissions), used to model physical climate impacts and support climate-risk analysis

How does EcoActive support Climate Scenario Analysis?

EcoActive structures climate scenarios, assumptions, physical and transition risks, business exposure, evidence, review, and disclosure connections within a governed reporting environment.

Ready to Understand Your Climate Resilience?

See how EcoActive connects climate scenarios, physical and transition risks, assumptions, exposure,
evidence, and disclosure in one structured process.