Disclosure focus
This disclosure asks an organisation to explain how it has identified climate-related risks and how it has used scenario analysis to understand them. In practice, that means setting out the main climate risks it has considered, the time horizons it has looked at, and the way different climate futures were used to test the organisation’s resilience and exposure.
The practical focus is on whether the assessment is broad and decision-useful, not just a one-off exercise for a flagship site or a single business unit. An organisation should be able to show how it has covered the parts of the business and value chain that matter most, what assumptions were used in the scenarios, and how the results inform risk management, strategy and planning.
This LRA educational guidance supports disclosure preparation. For the exact requirements, always refer to the official EFRAG source.
Before you start
A quick mental checklist before you prepare this disclosure — tick each as you settle it.
Preparation
Key datapoints to prepare
＋ Show E1-2 sub-elements (LRA working checklist)
Classify the physical risks separately from the transition risks.
List the assets and activities that could be affected by hazards.
Name the climate hazards you have identified.
Explain the method used to judge how exposed those assets and activities are to those hazards.
List the assets and activities that could be affected by transition events.
Name the climate transition events and longer-term shifts you have identified.
State whether a 1.5°C pathway was used.
Give the temperature outcome linked to that pathway.
State whether a high-emissions pathway was used.
State whether scenario analysis was used.
Set out the range of scenarios applied.
Describe the part of the business covered by the assessment.
Set out the main assumptions used.
State the time period covered by the scenario analysis.
How to prepare it
1Set the boundary for the assessment first: decide which parts of the business, sites, assets and activities are in scope, and make that scope explicit before you start testing climate exposure.
2Separate the two risk lenses and define them in business terms: identify which matters you are treating as direct climate damage risk and which you are treating as change-driven business model or market risk, so the classification is clear and consistent.
3List the climate drivers you considered and link them to the affected assets or activities: record the relevant physical hazards, and separately the transition events or trends, then show which parts of the business each one could affect.
4Set out the method and assumptions used to judge sensitivity and scenario outcomes: explain how you tested vulnerability, what scenario work you used, the range of cases applied, the temperature pathway where relevant, the main assumptions, and the period covered by the analysis.
5Compile the disclosure content in the same structure as the underlying assessment: prepare the yes/no selections, the narrative descriptions, and any scenario details so they match the evidence you have assembled and the scope you assessed.
6Document anything you left out or changed, then check the final wording against the official source: keep a clear audit trail for exclusions, scope changes and methodological updates, and review the completed disclosure against the source requirements before sign-off.
Request the data
Request the climate risk and scenario analysis evidence
Translate the disclosure into an internal business question — then adapt it to your organisation's own language.
Which climate-related risks, exposed assets and activities, and scenario-analysis inputs have been identified for the reporting period, and what evidence supports them?
Use your organisation’s own language first (for example, your risk register, resilience review, business continuity, asset portfolio, or planning model terms), then map the outputs to the reporting disclosure. Keep the wording practical and internal; check the source material before sign-off.
Weak request
Please provide the ESRS E1-2 evidence for physical and transition risks, including hazards, exposed assets, sensitivity methodology, transition events, scenario analysis, assumptions, and time horizon.
Why it fails: It uses framework language that many internal owners will not use day to day, so it is harder to action and easier to misread. It also bundles several distinct asks into one abstract sentence, which makes it harder to trace to the team’s own registers, models, and working papers.
Better request
Please send the latest climate risk register extract and scenario analysis pack for [period] for [business area]. We need the risks you have tagged as weather-related or transition-related, the sites/assets/activities they affect, the method used to judge exposure, the scenario cases used, the assumptions behind them, the scope covered, and the analysis period. Please include the supporting workbook or slide deck and note the version to use.
Industry examples
Draft your disclosure
Notes that turn data into a disclosure
LRA training templates — adapt them to your organisation, and check the official source before sign-off.
Method note
Explain how the team defined the risk categories, identified relevant hazards and transition events, assessed which assets and activities were exposed, and set the scenario inputs, coverage and assumptions used in the analysis.
Context note
Set out what the results mean for the business by linking the identified climate hazards, transition shifts and scenario choices to the parts of operations that may be affected.
Fluctuation statement
If the assessment changed from a prior period, note whether the difference reflects a wider or narrower scope, a revised set of hazards or transition events, updated scenario inputs, or changes in the assumptions used.
Content index entry
E1-2 Identification of climate-related risks and scenario analysis — [location / page] / [notes]
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Preparation tools & forms
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Assurance readiness
For each claim, check the evidence
Evidence pack to prepare
Common reporting gaps
The information is presented without a date or as-at point.The scope or boundary of the statement is left undefined.Key terms are used inconsistently across the report.Material changes since the previous period are not disclosed.Assertions are made without supporting detail or a source record.Boilerplate is used that does not actually answer what is asked.
Common gaps
Mistakes to avoid when collecting the data
Wrong owner asked
The team chases the wrong business lead, so the climate-risk and scenario inputs come from someone who does not hold the underlying operational records.
Framework language used instead of local terms
People ask for answers in ESRS-style labels rather than the organisation’s own asset, site, portfolio, or planning terms, and the source team cannot map the request cleanly.
Scope not pinned down
The data pull starts before everyone agrees which operations, sites, or activities are in scope, so different teams collect different populations.
Timing basis mixed up
One team uses a different reporting cut-off or assessment date from the rest, which makes the climate-risk evidence and scenario inputs impossible to line up.
Counting basis not kept separate
Records are merged even though they were built on different bases, so the same exposure is counted in one place and treated differently in another.
Original source labels lost
During consolidation, the team strips out the source system names, file references, or local field names, so no one can trace a figure back to its origin.
Populations combined too early
Hazards, transition events, or assessed assets are rolled into one pool before the underlying groups are kept apart, which hides differences that matter for the analysis.
Evidence trail incomplete
The pack is assembled without the supporting metadata and sign-off history, so reviewers cannot see who supplied each input, when it was captured, or who checked it.
Where judgement is often needed
What sits inside the review perimeter after a buy-in or sale
Use the same organisational perimeter you used for the rest of the climate review, explain any additions or removals from acquisitions or disposals, and make clear the date or cut-off used.
When local labels do not line up across countries
If the same hazard, event or trend is described differently in different markets, map each local term to one internal label and disclose the mapping so readers can see how the group compared like with like.
How to handle sites or activities that sit near the boundary
State the rule you used for borderline assets, operations or value-chain links, such as inclusion by control, material exposure or operational dependence, and explain any exclusions.
Choosing the date and basis for the assessment
Say whether the review was built from year-end, average-period or another reference point, and explain why that basis was used for the climate risk and scenario work.
Using measured figures versus estimates
Where direct measurements were not available, identify the parts of the analysis that rely on estimates or proxies, describe the main assumptions behind them, and separate them from observed data where that helps understanding.
Setting the level of detail for scenario ranges and temperature paths
If you use a range of outcomes or a temperature pathway, explain the source, the range applied and any simplifications made so users can see how the scenario was framed.
Deciding how far forward the scenario review runs
Disclose the period covered by the scenario work and explain why that horizon was chosen, especially where different business units or risks were tested over different time spans.
Balancing useful detail with privacy or confidentiality limits
If site-level or population-level detail would expose personal or sensitive information, group the data to a higher level, say what was aggregated, and explain the limit this creates for interpretation.
Rounding and small differences in totals
State the rounding rule used for counts, percentages or exposure figures, and note that minor differences may arise because rounded components do not always add exactly to the published total.
Examples
Illustrative examples
Synthetic, written by LRA — not from a company report, not text from any standard.
Illustrative (synthetic) example — Manufacturing
*Illustrative only — synthetic example.* We assessed climate exposure across our own sites and selected suppliers, then grouped the findings into physical and transition risk classes for the group. - Physical side: we identified heat stress, flooding and water scarcity; these were tested against 18 factories, 6 warehouses and 2 key raw-material suppliers, using a sensitivity review based on location, asset design and dependency on water and power. - Transition side: we looked at carbon pricing, tighter product standards and shifts in customer demand; these were applied to the same operating footprint plus 4 logistics routes and 1 major distribution hub. - For the forward-looking test, we used one high-warming path and one 1.5°C path, with an assumed temperature outcome of about 3.0°C and 1.5°C respectively, and we ran scenario analysis over our direct operations, purchased energy use and the first tier of our value chain. The ranges applied were 2025–2030 for near-term effects and 2031–2040 for longer-term effects, with key assumptions including stable production volumes, gradual policy tightening and no major site closures.
Synthetic illustration only; figures are internally consistent and intended for training review.
Illustrative (synthetic) example — Retail
*Illustrative only — synthetic example.* We reviewed climate-related exposure for our stores, online fulfilment and transport network, then separated the results into physical and transition categories for management use. - Physical side: storm surge, extreme heat and prolonged drought were the main hazards; we mapped them to 42 stores, 3 fulfilment centres and 11 delivery depots, with sensitivity judged from building elevation, cooling capacity and dependence on local water supply. - Transition side: we considered higher energy costs, packaging rules and lower-emission consumer preferences; these affected 42 stores, 3 fulfilment centres, 11 depots and 2 outsourced distribution partners. - We used both a high-warming path and a 1.5°C path, with implied warming of around 2.8°C and 1.5°C, and we applied scenario analysis to our direct sites, leased premises and transport activities across 2024–2029 and 2030–2035. Key assumptions were that store openings follow plan, fleet renewal continues on schedule and policy changes arrive gradually rather than all at once.
Synthetic illustration only; figures are internally consistent and intended for training review.
How companies report E1-2 in practice
Real reports where this topic is disclosed. These are report practice, not exact disclosure templates to copy.
Bakkafrost P/F
Food Production — Animal Source · Faroe Islands · 2025
Bakkafrost P/F’s Integrated Annual Report 2025 includes some related context on climate scenario analysis aligned with TCFD, conducted in 2022, mentioning biodiversity-related matters as material financial risks (p.72). The report also outlines a three-step approach to assessing climate-related hazards and transition events (p.71) and identifies material climate-related impacts, risks, and opportunities involving the company (p.79). However, there is no clear or direct disclosure specifically addressing the requested datapoint, and much of the relevant narrative remains unclear or not found elsewhere in the report.
Signify N.V.
Electrical Equipment and Machinery · Netherlands · 2025
Signify N.V.’s 2025 Annual Report includes a reported value indicating that the company has analyzed all climate-related hazards listed in appendix A from Annex 1 of the EU Taxonomy (p.69). The report also references the identification and assessment of physical and transition climate-related risks, with mentions of climate-related physical risks and transition risks on pages 53, 54, and 55, though these disclosures lack clear, detailed data. Notably, there is no clear or quotable evidence of methodology or comprehensive narrative explaining these risk assessments, and several datapoints remain not found or unclear throughout the report.
Raben Group
Ground Transportation — Trucking · Netherlands / Poland · 2025
Raben Group’s 2025 Sustainability Report includes a covered narrative on page 38 describing the initiation of a climate risks and opportunities assessment, noting a material impact of climate-related risks on its core business model (p.38). However, the disclosure is unclear regarding detailed methodology or comprehensive narrative on these risks, with no further quotable evidence found elsewhere in the report. Several expected datapoints related to climate risk disclosures are missing or not clearly addressed, limiting the completeness of the information provided.
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Scenarios to work through
A manufacturer has mapped flood-prone sites and heat-sensitive equipment, but the team is unsure whether to label the flood exposure as a weather-related threat and the fuel-price exposure as a change-over-time threat in the same note. The draft also lists the plant, warehouse and delivery fleet, but not the office lease.
QHow should the preparer separate the two kinds of climate exposure, and what should be named when describing what was assessed?
Reveal model answer →Hide answer ↑Treat the flood and heat issues as one class of weather-and-asset exposure, and the fuel-price and policy issues as a separate class of change-driven exposure. In the write-up, name the hazards or change drivers identified, then identify the assets and activities that sit in those exposure areas; if the office lease is not part of the assessed set, it should not be added just to make the list look fuller.
Why this matters · Keep weather-related and change-related exposures distinct, and describe the specific assets and activities actually covered.
A group has run a climate stress test on its European factories using a 2030 and 2050 view, but the analyst only wrote “we used scenario analysis” and did not record the temperature path, the assumptions, or which parts of the business were included. Management wants the note shortened to one sentence.
QWhat minimum content should be retained so the scenario work is understandable and traceable?
Reveal model answer →Hide answer ↑The note should still say that scenario analysis was used, identify the range of scenarios applied, state the temperature pathway where a warming pathway is part of the set-up, describe the scope of operations examined, record the main assumptions, and give the time horizon covered. A one-line summary is not enough if it leaves out those elements.
Why this matters · A scenario summary needs enough detail for a reader to see what was tested, over what period, and on what basis.
A food producer has identified drought, wildfire and water-stress as physical threats, but the team is debating whether to include a sensitivity method that only compares last year’s utility bills with this year’s. They also want to say the method was “desk-based review” without explaining how exposure was judged.
QWhat should the preparer explain about the way sensitivity was assessed?
Reveal model answer →Hide answer ↑The preparer should describe the method used to judge how exposed the relevant assets and activities are to the identified hazards, not just the fact that some internal review took place. A simple cost comparison may support the analysis, but the disclosure should explain the actual approach used to assess sensitivity and link it to the hazards and exposed operations.
Why this matters · Explain the assessment method itself, so readers can see how exposure was judged rather than only seeing the output.
A transport business has modelled a high-warming pathway and a lower-warming pathway, but the board asks whether it can omit the higher-warming case because it looks too remote. The team also wants to state only that “the analysis covered the business” without saying whether depots, vehicles and maintenance yards were all included.
QHow should the preparer decide which scenario set to keep, and what should be said about the part of the business assessed?
Reveal model answer →Hide answer ↑If the analysis used both a high-warming path and a lower-warming path, both should be kept in the disclosure rather than dropping the more severe case for presentation reasons. The scope should also be stated clearly enough to show which operations were assessed, such as depots, vehicles and maintenance yards, so the reader can tell what was inside the review and what was not.
Why this matters · Do not trim the scenario set for convenience; show the full scope of operations that were actually assessed.
Framework references
Related framework references
How this disclosure maps across the major reporting frameworks.
Primary
Related & explore
Transition plan for climate change mitigation → Guide ✓Internal carbon pricing → Guide ✓Anticipated financial effects from material physical and transition risks and potential climate-related opportunities → Guide ✓Resilience in relation to climate change → Guide ✓Policies related to climate change mitigation and adaptation → Guide ✓Actions and resources in relation to climate change mitigation and adaptation → Guide ✓Show all 10 related disclosures →
FAQ
Questions this page answers
For E1-2 climate change, what data do I need to gather before I start drafting the disclosure?+−
Use the page’s datapoint list as your starting checklist: physical risk flag, transition risk flag, hazards identified, exposed assets and activities, sensitivity method, transition drivers, transition-exposed assets, high-emission scenario, 1.5 degree scenario, temperature outlook, scenario analysis flag, scenario ranges, assessment boundary, key assumptions and analysis period. The page also gives a step-by-step preparation flow to help you turn that list into a draft.
How do I decide the scope and boundary for the E1-2 climate change disclosure?+−
The page points you to the assessment boundary, exposed assets and activities, and the analysis period as the main scope-setting items. Use the step-by-step preparation section to make sure the boundary is clear before you write the narrative or populate the workbook.
What should I include in the E1-2 scenario analysis section?+−
The page highlights whether scenario analysis is used, the high-emission scenario, the 1.5 degree scenario, temperature outlook, scenario ranges, key assumptions and the analysis period. That gives you the practical inputs to describe the analysis in a way that is consistent and reviewable.
How do I collect the right evidence for the E1-2 climate change disclosure?+−
The page includes an evidence pack with five items for assurance readiness, plus five assurance claims to verify. Use those together so each claim has a clear risk and supporting evidence trail.
What are the five assurance claims I should check for E1-2?+−
The page says there are five assurance claims to verify, each linked to a claim, risk and evidence. Use that structure to test whether the disclosure is supported by the underlying data and documentation before sign-off.
How can I use the E1-2 workbook to prepare the disclosure faster?+−
The Download Centre includes a Prep & Assurance workbook in .xlsx format. Use it to organise the datapoints, evidence and draft output so you can move from collection to a reviewable draft more efficiently.
What is the printable Library Card for E1-2 and when should I use it?+−
The Download Centre includes a printable Library Card in .pdf format. It is there as a practical companion to the page content, so you can keep the key preparation points and evidence checks to hand while drafting or reviewing.
What common mistakes does the E1-2 page warn me to avoid?+−
The page lists common reporting gaps and mistakes, so you can check your draft against them before it goes to assurance. Use that section to spot missing datapoints, weak boundaries, unclear assumptions or unsupported claims.
How do I turn the E1-2 data into a draft narrative and content index line?+−
The draft-output section gives visualisation ideas, narrative starters and a content-index line. Use those prompts to convert your prepared data into a concise disclosure draft that is easier for reviewers to follow.
Are there example disclosures for E1-2 climate change that I can copy from?+−
The page includes synthetic illustrative example disclosures, including a quantitative data table. They are there to show how the disclosure can be presented, but they should be treated as examples only and checked against your own data.
Where can I find real company reports that disclose E1-2 climate change?+−
The page has a 'From company reports' table that links to real published reports at the relevant pages where the topic is disclosed. Use it as a reference point for seeing how others present the topic, not as a substitute for your own evidence and judgement.
More questions this page can help with
E1-2 climate change disclosure checklist for sustainability managerE1-2 physical risk flag and transition risk flag what data do I needE1-2 hazards identified exposed assets and activities how to documentE1-2 sensitivity method and transition drivers how to explain in a draftE1-2 scenario analysis flag high-emission scenario 1.5 degree scenario temperature outlookE1-2 assessment boundary key assumptions analysis period what should be includedE1-2 assurance claims evidence pack what to prepareE1-2 common reporting gaps and mistakes to avoidE1-2 workbook download how to use the prep and assurance spreadsheetE1-2 library card pdf how to use for disclosure draftingE1-2 synthetic example disclosure data table how to read itE1-2 content index line and narrative starters for drafting
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