The Intergovernmental Panel on Climate Change (IPCC) has issued a significant shift in how its global climate scenarios are defined. This could impact entities using IPCC climate scenarios in their risk assessments, resiliency planning, strategy development and external reporting.
This update has sparked public and political attention, with the retirement of RCP8.5 becoming the main subject of President Donald Trump’s social media (see Figure 1). This interpretation highlights the importance of understanding what has been updated, why and what this really means for you.
Figure 1. Truth Social post by President Donald Trump referencing IPCC scenario updates. Image taken from CBC.
What the IPCC Has Actually Changed?
The IPCC is in its Seventh Assessment Report cycle (AR7) running between 2023 and 2029, throughout which the IPCC updates its research on the state of climate change and updates its resources accordingly. Part of the work being undertaken within this cycle is responding to critiques of the Relative Concentration Pathway (RCP) and Shared Socioeconomic Pathway (SSP) climate scenarios that the IPCC has previously published. Critiques include that:
- The scenarios are implausible with underlying economic assumptions being outdated.
- The scenarios (RCP and SSP) are overly complex and do have a clear narrative which integrates both physical- and transition-related climate change factors.
- The scenarios miss real-world nuance in feedback loops between socioeconomic decisions and physical climate change impacts.
To overcome this, the IPCC research group CMIP7 (7th phase of the Coupled Model Intercomparison Project) has developed a series of new climate change scenarios which are founded in clearer narratives that consider how certain socioeconomic decisions could cause different emissions pathways, and therefore result in various climate change impacts – similar to the NGFS (Network for Greening the Financial System) climate scenarios.
These scenarios are labelled: ‘High (H)’, ‘High-to-Low (HL)’, ‘Medium (M)’, ‘Medium-to-Low (ML)’, ‘Low (L)’, ‘Very Low (VL)’, ‘Low-to-Negative (LN’ – reflecting their long term emissions and temperature trends.
The release of these scenarios indicates that the RCP and SSP scenarios will likely be phased out, with RCP8.5 already being formally retired as it is no longer considered achievable due to the actions already taken to mitigate GHG emissions increase – resolving the primary critique that the certain RCP/SSP scenarios were no longer plausible.
Figure 2. Proposed CMIP7 climate scenarios. Image taken from the Coupled Model Intercomparison Project. Adapted from van Vuuren et al., 2026.
Why This Creates a Problem
There is now potentially an implementation gap – old scenarios have been publicly critiqued by the IPCC’s own research groups, without the formal endorsement of the new CMIP7 scenarios which will not happen until the end of the AR7 phase in 2029. This creates uncertainty for organisations that rely on scenarios for climate disclosures, stress testing, and policy planning.
Communication risk – the retirement of RCP8.5 has led to criticism of climate change messaging by world leaders, arguing that limited or no further action is required to be taken manage the climate change risk. This highlights a disconnect between research messaging and interpretation to facilitate policy development and action.
Scenario analyses are now (potentially) out of date… as well as what the analyses informed – many organisations have built risk assessment tools, scenario analysis dashboards, strategies, reporting processes and templates which rely on the old RCP and SSP scenarios. These tools and outcomes may now appear outdated or misaligned, particularly if they make use of RCP 8.5.
What do you need to do now?
Separate the official vs the provisional for reporting purposes. Whilst our focus should be on impactful climate change risk assessments and strategy development, we do operate in a world of compliance and reporting requirements. CMIP7 scenarios are still provisional and not yet formally endorsed by the IPCC. If you are required to externally report against IPCC RCP and SSP scenarios, you should still do so.
…however, you may wish to explore use of the updated CMIP7 scenarios internally (and cautiously as they could be significantly updated or not endorsed at all in the future). Use of scenarios which more clearly combine the socio-economic and emissions pathway narratives often support a more meaningful and impactful risk assessment. By providing an integrated narrative regarding potential transition- and physical-risk and opportunity impacts, they inform the design of a more robust and practical strategy where transition planning and adaptation planning are considered in concert.
Conduct your scenario analysis and risk assessments using a principles-based and not label-dependent methodology. Quantitative dashboards can be impactful in informing business strategy and climate resilience plan development. However, it can be tempting to rely too heavily on the numbers without stopping to question the core narrative of the scenarios, why they are relevant to your organisation and as a result what they truly mean for your business. Retirement of the RCP and SSP scenarios would result in the update of many organisations’ dashboards and numbers – emphasising the need to have a strong foundational understanding of the why and the ‘so what?’. This update to the scenarios provides an opportunity for entity’s to refresh their scenario logic and ensure that they are critically evaluating each stage of their scenario analysis, leading to better understand of their results and more informed business strategy.
Dr Chris Stockey, Climate Change and Nature Lead
If you are interested in discussing more about what the IPCC scenario update could mean for you and your entity, or in learning about principles-based scenario analysis methodologies get in contact at chris@satarla.com
Wanting to learn more about how to integrate transition and adaptation planning methodologies to develop a ‘climate resilient transition plan’? Explore our suite of whitepapers.
To find out more about how to develop an effective enterprise risk management approach, integrating climate- and sustainability-related risk into your entity’s broader risk management processes, explore our website www.satarla.com and join our upcoming ongoing ‘mini masterclass’ training series through our Knowledge Hub.
