Using RCP and SSP Data to Enhance Corporate Climate Risk Assessment

How can companies better assess climate risks? The answer lies in using RCP and SSP data. These scenario frameworks, developed and widely used by the Intergovernmental Panel on Climate Change (IPCC), help organizations understand future climate risks and socio-economic developments, enabling strategic responses that are both data-driven and forward-looking. By leveraging these standardized scenarios, companies can align their climate risk assessments with the latest scientific consensus and regulatory expectations.

Key Takeaways:

• RCP scenarios show how greenhouse gas concentrations can affect global temperatures (e.g., RCP 1.9 for <1.5 °C warming). For instance, RCP 8.5 represents a high-emissions pathway, while RCP 2.6 assumes strong mitigation efforts.
• SSP scenarios describe socio-economic developments and their impact on climate action, such as population growth, economic trends, and policy choices. For example, SSP1 envisions a sustainable world, while SSP5 assumes fossil-fueled development.
• Companies should select at least two scenarios (optimistic, realistic, pessimistic) and integrate them into their strategic planning to capture a range of plausible futures and stress-test their resilience.

3 Steps for Implementation:

1. Select scenarios: Combine RCP and SSP data tailored to your industry and region, ensuring relevance to your specific risk landscape.
2. Meet regulatory standards: Take into account requirements such as CSRD and the EU Taxonomy, which increasingly mandate scenario-based climate risk disclosures.
3. Integrate data into risk management: Analyze risks both qualitatively and quantitatively, embedding scenario results into enterprise-wide decision-making.

Example: Companies like Nestlé Germany use climate scenarios to adapt supply chains and optimize ESG strategies. Tools like the Regional Climate Atlas Germany or the Climate Impact Explorer support this process by providing localized projections and impact assessments.

Small and medium-sized enterprises can also use scenarios effectively—for example, by comparing two contrasting scenarios for investment decisions, site planning, or insurance assessments. Combining regional climate forecasts with sector-specific SSP assumptions on economic development is particularly helpful here, allowing for more granular and actionable insights.

Conclusion: Proper use of RCP and SSP data enables companies to minimize climate risks and seize opportunities, supporting both regulatory compliance and long-term value creation.

RCP and SSP Data: The Basics

RCP and SSP Definitions

RCP (Representative Concentration Pathways) and SSP (Shared Socioeconomic Pathways) are scenario tools that help organizations and policymakers better understand climate risks. RCPs describe different trajectories of greenhouse gas concentrations, while SSPs illustrate how socio-economic developments might unfold in the future, influencing emissions and adaptation capacity.

Here is an overview of the most important RCP scenarios:

These scenarios form the basis for regional climate forecasts and risk assessments, and are referenced in the IPCC Sixth Assessment Report.

German Climate Scenarios

For companies in Germany, regional climate impacts are especially important. The Climate Service Center Germany (GERICS) has developed detailed climate forecasts for all 401 German districts, regions, and independent cities. The data shows:

• Warming in mountain regions such as the Alps and the Black Forest will be more pronounced.
• Higher risk of hot days and tropical nights (nights with temperatures above 20 °C) in the Upper Rhine Valley.
• Increasing frequency of heavy rainfall events in many parts of Germany.

For example, in the Karlsruhe district, a significant increase in hot days, tropical nights, and longer heatwaves is expected—unless effective climate protection measures are implemented. According to Germany’s Environment Agency, such localized projections are crucial for business continuity planning.

Important: Regional differences are substantial. While companies in the north must plan for increasing wind intensity, in southern Germany, the rise in drought periods is a key challenge—especially for production processes with high water demand. Climate scenarios should therefore be broken down to specific locations for maximum relevance.

Methods for Climate Risk Assessment

The Climate Impact and Risk Analysis 2021 (KWRA) offers a structured approach to evaluating climate risks.

• Regional analysis: Use GERICS climate outlooks to better assess local climate risks.
• Scenario comparison: Comparing different climate protection scenarios helps in planning adaptation measures.
• Risk assessment: The KWRA framework allows for systematic evaluation of physical and transition risks.

When using RCPs and SSPs, companies should always document the underlying time horizon and model assumptions. While RCPs mainly represent climate-physical trajectories, SSPs help derive political, regulatory, or technological trends—for example, for Scope 3 calculations or supply chain analyses. For a deeper understanding, see Nature Climate Change: The Scenario Model Intercomparison Project.

The SSP RCP Scenario Framework: Status and Next Steps ...

3 Steps to Using RCP/SSP Data

With these three steps, you can leverage RCP and SSP data to specifically improve your corporate risk assessment and ESG strategy.

1. Select Scenarios

Choose at least two contrasting scenarios relevant to your company. The selection of suitable scenarios should be closely coordinated with risk assessment and corporate strategy. It is often worthwhile to include an explicit “worst case” for extreme scenarios (RCP 8.5)—even if this is considered increasingly unlikely—to analyze stress limits or insurance needs. According to TCFD guidance, scenario analysis is a best practice for understanding climate-related financial risks.

Here are some recommended combinations:

These scenarios should be plausible, distinct, and tailored to your specific requirements. Also consider different time horizons:

• Short-term: until 2025
• Medium-term: until 2030 (SDG targets)
• Long-term: until 2050 (climate neutrality)

2. Meet Regulatory Standards

Ensure your scenario analysis complies with applicable German and EU requirements. Clearly and transparently document:

• The data sources and assumptions used
• The analysis methods applied (qualitative and quantitative)
• The results of your scenario analysis

Key focus areas should include the following risks:

• Physical climate risks
• Transition risks (e.g., due to policy, legal, or technological changes)
• Market and reputation risks

Use the results to systematically integrate these into your risk management. Under the CSRD reporting obligation, it will soon be necessary to present climate-related risks using standardized scenarios (e.g., via ESRS E1). RCP and SSP combinations help to substantiate double materiality (impact & financial materiality)—especially when assessing physical risks.

3. Integrate Data into Risk Management

Integrate the analyzed data into your risk management in three clear steps:

1. Qualitative assessment
   Start with a qualitative evaluation to identify initial risks and lay the foundation for more detailed analyses.
2. Quantitative analysis
   Develop concrete indicators for the identified risks. For example, under the RCP 8.5 scenario, CO₂ concentrations could reach about 950 ppm by 2100, leading to a global temperature increase of more than 4°C, according to IPCC AR6.
3. Action planning
   Create a clear action plan that includes:
   • Short- and medium-term adaptation strategies
   • Milestones for risk reduction
   • Regular reviews and adjustments

"By agreeing on a limited set of scenarios, researchers (especially climate modelers) can be more sure they are comparing apples with apples when conducting their research and communicating their results." - David Furphy

Scenario Planning for ESG Goals

Connecting Scenarios and ESG Goals

Combining climate scenarios with ESG goals helps companies develop effective sustainability strategies. Both physical and transition risks should be considered over various timeframes:

The analysis should cover not only your own operations but also the entire value chain. It’s important to clearly document data sources, methods, impacts, and possible adjustments. A practical example shows how this linkage works in reality.

Examples from German Corporate Practice

A look at German companies shows how integrating climate scenarios into ESG strategies can be implemented. One example is Nestlé Germany, which in 2021 used climate scenarios to analyze its supply chains. Based on this analysis, the company developed a comprehensive transformation strategy with measures such as:

• Replacing animal-based with plant-based ingredients
• Adapting product development to identified climate risks
• Introducing new sustainability criteria for suppliers

"Scenario analysis enables companies to develop strategies that are adaptable and resilient to numerous climate-related risks and opportunities." – Task Force on Climate-Related Financial Disclosures (TCFD)

This example demonstrates how companies can use RCP and SSP data to future-proof their ESG strategies. The key is systematically integrating insights into existing management processes and communicating openly with investors and other stakeholders. According to CDP, scenario analysis is increasingly expected by investors and rating agencies.

Integrating climate scenarios also supports the achievement of transformation goals, such as simulation-based planning of CO₂ reduction pathways. This allows companies to check whether their investment decisions are truly “Paris-compatible”—a crucial criterion for many impact investors and ESG ratings.

Planning Tools for German Companies

Overview of Available Tools

The Regional Climate Atlas Germany offers detailed regional scenarios. With a total of 120 scenarios, it enables precise analysis of potential climate changes, specifically tailored to German conditions and regularly updated.

Another important tool is the Climate Impact Explorer, which analyzes climate impacts from a warming of 1.5 °C upwards. The geographic levels of analysis and their applications are:

Additionally, the SSP database of the IIASA provides precise socio-economic projections. It contains up-to-date scenarios with radiative forcing values of 1.9 W/m² and is especially useful for developing net zero strategies.

The KliVO Portal also offers current climate data and adaptation services to help companies systematically integrate climate scenarios into their planning processes.

These tools provide a solid data foundation that can be optimally combined with expert services and sector-specific consulting.

In addition, industry guidelines—such as those from BDI, DIHK, or the Federal Environment Agency—are recommended to identify sector-specific risks and data sources. These resources help interpret technical data and translate it into practical action plans.

Services from Fiegenbaum Solutions

I support companies in using this data effectively and offer the following services:

1. Climate risk assessment
   Analysis of climate risks tailored specifically to your company. This includes various RCP and SSP scenarios as well as data from the Regional Climate Atlas and the Climate Impact Explorer.
2. ESG strategy development
   Development of sustainability strategies based on scientific climate scenarios. This also takes into account requirements such as CSRD and CBAM.
3. Data-driven decision-making
   Integration of climate scenarios into management systems to make informed decisions on investments and adaptations.

Key Insights

After explaining the analysis methods and application examples, the key points for using RCP and SSP data can be summarized as follows:

Scenario planning depends on these key factors:

• Scenarios should be credible, clearly distinguishable, and tailored to the company’s needs.
• A combination of qualitative and quantitative analyses is crucial.
• External influences must not be overlooked, including policy shifts, technological change, and market dynamics.

Key Elements for Implementation

Recommendations for Application

• Start with a qualitative analysis and gradually expand it with quantitative approaches.
• Record the results of the scenario analysis clearly and in a structured way to make them accessible to investors.
• Develop concrete action plans with clear medium- and long-term targets.
• Embed the findings directly into the corporate strategy.

Regularly reviewing and adjusting the scenarios ensures that strategies remain current and effective.

Frequently Asked Questions

Here I answer key questions on the practical use of RCP and SSP data.

RCP vs. SSP: Differences and Focus Areas

RCPs focus on greenhouse gas emissions and radiative forcing, while SSPs describe socio-economic developments.

Radiative forcing is measured in watts per square metre (W/m²). For comparison: doubling CO₂ levels from pre-industrial values corresponds to a radiative forcing of 3.7 W/m².

How to Choose the Right Scenario?

The choice depends on the expected temperature development:

• RCP 1.9: Approx. 1.5 °C increase
• RCP 2.6: Approx. 2.0 °C increase
• RCP 4.5: Approx. 2.4 °C increase

The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) are becoming increasingly important in climate reporting by German companies—especially since the CSRD has incorporated many of the TCFD’s elements.

Useful Tools and Resources

The German Environment Agency provides valuable information for assessing physical climate risks. For effective scenario analysis:

• Combine quantitative and qualitative data.
• Review scenarios regularly.
• Account for uncertainties in the analysis.

More than half of the case studies analysed refer to climate projections or general trends from global and regional climate models. This highlights the importance of a robust data foundation.