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Sreya Nath

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Sreya works on multiple RISE programs across global supply chains. She supports RISE Respect—Tackling GBVH, RISE Foundations, and RISE Women and Leadership programs. She is also responsible for assisting country leads in India and Bangladesh.  

Prior to BSR, Sreya worked as a gender consultant in different nonprofits and international organizations. She worked on an action-research project on socioeconomic inclusion of migrant and refugee women in the EU, focusing on Italy, France, Greece, and the UK, in collaboration with Women Forward International. She also worked as a graduate research assistant at Sciences Po MediaLab, where she investigated the gendered dimensions of immigrant discourse on Twitter.    

Sreya has a Master’s in International Development, with a specialization in Advanced Gender Studies from Sciences Po Paris. Originally from Calcutta, India, Sreya is a native Bengali speaker. She speaks English and Hindi fluently, and she speaks French at an intermediate level. 

Case Studies | Thursday July 13, 2023

Conducting a Climate Risk Assessment through Scenario Analysis

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Introduction

BSR worked with Mercer International Inc., a Nasdaq-listed global producer of market pulp and solid wood products, to conduct a climate scenario analysis. With a tailored set of three climate scenarios, BSR helped Mercer explore key climate-related risks and opportunities facing the company and identify strategic interventions to improve the overall resilience of the company’s strategy. With strong engagement from senior leaders throughout the process, this effort was not a “check-the-box” disclosure exercise—instead, it was a strong analysis of climate impacts to Mercer’s business strategy.

Background

Mercer is a global producer of market pulp and solid wood products. With mills and manufacturing facilities in North America and Germany, Mercer is strategically located next to strong softwood and hardwood suppliers. Softwood and hardwood pulp are utilized for tissue, specialty paper, packaging, and more. In addition to pulp, Mercer also produces dimensional lumber for construction as well as cross-laminated timber (CLT). CLT is an alternative building product used to replace steel and concrete, driving greenhouse gas (GHG) emissions reductions in building construction.  

The Challenge

Given Mercer’s dependence on sustainable forests for pulp and timber production, the company must have a clear understanding of climate impacts. At the current level of warming, forests from which Mercer sources have already experienced climate-related events like disease, insect infestation, and increased wildfires. These, in turn, impacted the company’s operations, supply, and logistics. In 2021, an atmospheric river event in Canada affected Mercer’s transport and logistics of supply and delivery of its products to key markets. With these existing impacts on supply and logistics, as well as forecasted rise in demand for pulp and timber products, focusing on resilience and strategic interventions to key climate impacts is critical for Mercer's business.

Our climate scenario analysis approach helped facilitate that strategic thinking. After conducting Mercer’s first climate scenario analysis in 2020, Mercer was familiar with BSR's deep expertise in futures thinking and engaged BSR to help refresh and assess climate-related impacts on various business units across the globe. Mercer also understands the need to periodically reevaluate ever-changing climate risks, and it considers climate scenario analysis based on the latest science to be a crucial solution for companies and sectors highly exposed to climate change.

BSR’s Response

Our first step for this work was to understand Mercer's business strategy and market positioning in order to augment and tailor our off-the-shelf climate scenario narratives, originally developed in partnership with Bloomberg Philanthropies. The scenario set was built using the Network for Greening the Financial System (NGFS) base scenarios and projections.

BSR built out three in-depth scenario narratives: Current Policies, Net Zero 2050, and Delayed Transitions. This involved researching emerging trends and signals of change as well as integrating data projections from the NGFS climate scenario dataset. To tailor the scenarios, in collaboration with the Mercer team, BSR identified four critical themes of uncertainty for the company and conducted desktop research and analysis to learn how these themes could plausibly play out in each scenario. We also identified six critical transition data projections from the NGFS database and three key physical climate impact projections from the Climate Analytics portal that were relevant for Mercer’s main regions of supply and operation in Canada and Germany. With the full set of tailored scenarios, we began the internal stakeholder engagement process.

Our initial engagement consisted of small workshop sessions across critical business functions to identify a long list of climate-related risks and opportunities that Mercer might face in each future scenario. Through these working sessions, we engaged with 16 senior leaders across six functional areas, including operations, finance, forest management, sales, and logistics.

BSR collated the key risks and opportunities by scenario and identified thematic hotspots and overarching future trends that may present significant risks or opportunities to Mercer's business across the entire set of scenarios.

Our final workshop, the last step in our approach, brought back the senior leaders from the initial interviews. During the workshop, we started by validating the identified key risks and opportunities and then shifted quickly into exploring the hotspots in more detail. For each hotspot, BSR facilitated small group discussions to explore clear actions and strategic interventions that Mercer can perform across the organization to mitigate risks and seize the opportunities related to each hotspot. This final session encompassed actions to increase and enhance strategic resilience to these climate impacts.

Impact

BSR conducted a robust scenarios-based climate risk assessment to prepare Mercer for a TCFD-aligned climate risk disclosure. More importantly, BSR helped facilitate critical strategic conversations on the resilience of the overall business and growth strategy to key climate risks, and we equipped Mercer with a near-term roadmap that outlined key next steps and governance-related responsibilities to ensure successful management and mitigation of these risks.

"This in-depth assessment of Mercer's future resilience under all three climate change scenarios has enabled our senior leadership, across all key functional areas, to better understand the risk and opportunities of climate change and develop a more robust strategy that will incorporate these key learnings."

Bill Adams, VP, Sustainability and Innovation

After our work with Mercer, the company was able to produce a robust TCFD report and integrate resilience into its business strategy and planning processes.

Conclusion

As part of a wider set of activities in the business toolkit, climate scenario analysis is a powerful method for uncovering and assessing a company’s strategy against uncertain climate risks and emerging opportunities. By testing how to best respond to these uncertainties using actions that build resilience, companies can explore pathways for delivering successful business outcomes in the face of climate change.

"Undertaking a climate scenarios analysis was a strategic necessity for Mercer to ensure resilient operations and achieve sustainable growth. Proactively assessing and preparing for the potential effects of climate change helps businesses navigate the uncertain future. Specifically, it enables informed decision-making, fosters innovation, and helps build operations that can adapt, thrive, and contribute to a more sustainable world.”

Shahed Tootoonian, Director, Finance and Sustainability

Get in Touch

Interested in enhancing your company’s strategic resilience to climate impacts through climate scenario analysis? Please contact BSR’s Climate Team.

This case study was written by Nina Hatch and Ameer Azim. 

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Meghan Grever

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Meghan supports BSR’s member companies within the consumer products sector. She focuses on healthcare and food, beverage, and agriculture.

Prior to joining BSR, Meghan worked in pharmaceutical advertising, managing strategic marketing activities for new-to-market products, emerging therapies, and well-established treatments for various medical issues. She also consulted for the Food and Agriculture Organization on strategic messaging and communications for programs focused on bolstering sustainability and practical solutions in food value chains via the reduction of food loss and waste. She also interned at the UN Framework Convention on Climate Change, where she focused on climate mitigation and reporting transparency.

Meghan has an Executive Master in Sustainability Leadership (EMSL) from Arizona State University and a BA in Communications (Journalism) from Temple University. She is a US Green Building Council-certified TRUE Zero Waste Advisor and has a Sustainable Resource Management Certification, accredited by the National Standards Board of the National Recycling Coalition.

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David Korngold

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David partners with corporate boards, executives, and investors to develop high-impact sustainability strategies. As part of BSR’s Transformation team, he co-leads engagement with boards of directors to promote effective board governance and leadership ambition on sustainability. 

Having previously led BSR's Financial Services team, David continues to work closely with financial companies on sustainability, ESG integration, and impact investing. David has led engagements in nearly all of BSR’s focus areas and major industry groups. This includes leading climate scenarios workshops with boards, creating net-zero road maps for investment firms, designing and operationalizing a leading impact investing fund, conducting materiality assessments, undertaking human rights impact assessments, and co-authoring research on topics like ESG for emerging public companies and responsible investment policies for private equity firms.

Before joining BSR, David worked in strategy and management consulting at Bain & Company.

David holds a BA in History from Amherst College.

Case Studies | Monday September 19, 2022

Climate Scenarios with the National Association of Corporate Directors

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In June 2022, BSR and the National Association of Corporate Directors (NACD) collaborated on a joint climate scenarios workshop for NACD’s Climate Continuous Learning Cohort, a group of approximately 50 current and future corporate directors. The workshop demonstrated the potential and value of climate scenarios to navigate climate risks and opportunities for boards in an era of increased transparency and duty of care.

Context

NACD is a member organization for corporate directors aiming to expand their knowledge, grow their network, and maximize their potential. It has worked with members for over 40 years to help improve their performance and create long-term value for their businesses. In March 2022, NACD launched a Climate Continuous Learning Cohort, a year-long learning initiative for peers to connect, share knowledge, and learn from each other. The program offers thought leadership in collaboration with NACD's community of experts, leading directors, and trailblazing companies to advance climate proficiency in the boardroom.

The Challenge

Boards are increasingly aware that addressing climate change is essential to building resilient business strategies. The energy transition, commodity costs and availability, extreme weather disruptions, climate justice, regulatory shifts—all have the potential to pose existential risks and provide opportunities for business.

Investors are shining a spotlight on these risks, like when the world’s largest asset managers call on boards to oversee climate disclosures or when the largest banks implement aggressive plans for decarbonization and climate risk management. Regulators and standards-setters around the world are also stepping up expectations for boards, often in alignment with recommendations from the Task Force for Climate-Related Financial Disclosure (TCFD). The International Sustainability Standards Board (ISSB), the US Securities and Exchange Commission (SEC), the EU Corporate Sustainability Reporting Directive (CSRD), the EU Corporate Sustainability Due Diligence Directive (EU CSDDD), the Japanese Financial Services Agency, and others are all poised to implement mandatory corporate climate disclosures that lodge responsibility for oversight with boards.

In light of both the growing urgency of climate change on the board agenda and the prevailing lack of climate expertise on boards, NACD reached out to BSR to collaborate on a climate scenarios workshop, based on our sustainability and board advisory expertise, our work on futures and scenario planning, and the reach of our global membership.

BSR’s Response

Building on work by the Network for Greening Financial Services, BSR tailored three scenarios to imagine potential versions of the world in 2030 and what they would mean for a fictive healthcare company. (While BSR typically facilitates customized scenarios workshops for participants from a single company, BSR adapted the approach to train directors from multiple businesses.) The scenarios addressed direct climate impacts as well as cross-cutting social, technological, economic, environmental, and political factors. NACD workshop participants collaborated to discuss risks and opportunities that each scenario would pose for the healthcare company. 

BSR facilitators then led the group into the most crucial part of the conversation: If the participants were on the board of the healthcare company, what steps would they take to govern the company for future success and resilience across all scenarios? 

Participants shared ideas for enhancing the board’s composition, structure, strategic engagement, oversight, and accountability measures. They identified questions for management and for boards to consider.

Examples of questions from the Board to management included:

• How might climate-related developments affect our business model and value chain? What alternative business models or approaches can be used to mitigate climate risk and unlock value?
• How ambitious do we want to be and when? What are the advantages/disadvantages of being an early vs. late mover?
• What are our biggest climate risk areas? How does this fit into enterprise risk management?
• How are we preparing for new reporting guidance (EU CSRD, CSDDD, SEC, ISSB, etc.)?

Examples for the Board included:

• How do we ensure a threshold of climate and ESG knowledge across all board members? How can we embed climate/ESG across all board committee charters?
• Do we have the right skills to address climate, including how it relates to existing focus areas such as policy, supply chain, geopolitics, etc.?
• Do we have access to insights from outside experts and stakeholder perspectives?
• How do we maintain a holistic understanding of climate and ESG impacts so that we don't look at issues in a vacuum? 

Impact

The exercise brought to life several keys to success in using scenario analysis:

• Create engagement and ownership among the participants. Arguably more important than the actual output is that the participants drive the process themselves and take ownership of their relevance.
• Use scenario analysis to build capabilities, expand vision, and reveal blind spots—not to choose “the most likely” scenario. Single-point forecasts are often wrong, and basing efforts on one scenario can potentially expose a company to risk.
• Tailor the exercise to the specific company, its value chain, business model, and stakeholders, based on commonly accepted, science-derived inputs.
• Consider climate scenarios with a broad range of outcomes and that consider social, technological, environmental, economic, and political developments. Narrow scenarios can fail to account for reality of risk.
• Consider physical and transition factors, as well as acute and chronic climate impacts. Climate risk is not “just” about storms and floods.
• Identify actions by the board and management that promote business resilience across a diversity of potential scenarios, aligned with respective roles. Scenarios should not be an intellectual exercise.

Participants hailed the exercise as invigorating, educational, and strategically valuable. One participant noted that, “When it comes to climate, an issue that can shape the strategic direction of the company in the long-term, this can get boards to think in more broad and diverse perspectives.” By engaging those perspectives, another participant commented, “It brings wide-ranging considerations to the table—from capital allocation to changes in talent development and complex reporting.” Another participant summarized: “It forces the discussion and thinking further, which should lead to a more robust strategy.”

One participant put it more plainly: a scenarios exercises for the board “helps minimize 'oh shit’ moments.”

Conclusion

Training on fundamentals of climate change—such as those conducted by NACD—are essential to build the knowledge base of board members. Scenario exercises for boards take that engagement a step farther to look at the specific company and the broad context, strategic implications, and the role of the board in building resilient business strategies.

[The] NACD and BSR partnership has proven to be a strong one, as the board members who participated in the workshop found it interactive, relevant, and practical. Through the breakout discussions, the BSR team was able to provide actionable knowledge on how to evaluate and navigate climate risks and opportunities, regardless of industry. I truly valued BSR’s expertise and enthusiasm while working on this project!

-Ghita Alderman, Associate Director, ESG Content, NACD

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Nina Hatch

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Nina works with BSR member companies across industries, on climate topics such as climate scenarios, TCFD, and decarbonization and net zero transformation.

Nina also works with companies across industries on developing robust sustainability strategies and conducting materiality assessments, among other topics.

Prior to joining BSR, Nina worked with a mission-driven consumer products company that makes menstrual products for women. There, she helped to create a long-term strategy to establish its leadership in sustainability, social impact, and health. In her early career, Nina worked at an environmental health advocacy firm in Maine and collaborated with industry leaders to remove harmful chemicals from food products. She also worked at a landscape architecture firm, promoting climate resilience through parks in New York City. 

Nina holds a Master of Environmental Management from the Yale School of Forestry and Environmental Studies, a Master of Public Health in Environmental Health Sciences from the Yale School of Public Health, and a B.A. in Environmental Policy from Colby College.

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David Stearns

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David leads BSR’s marketing and communications initiatives, working with a global team to amplify the organization’s mission and showcase its activities, impacts, and thought leadership to members, partners, and the wider business and policy community.

David previously worked for The B Team, a group of global business and civil society leaders working to catalyze a better way of doing business for the well-being of people and the planet. Throughout his 20-year career, he has worked with businesses and nonprofits in economic development, public health, and sustainability to define and communicate their purpose and impacts. .

He has built high-impact communications campaigns for a collaboration to improve maternal health in Zambia and Uganda, driven top-tier media coverage for a major economic development project in upstate New York, and helped strengthen parliamentary capacity and voter education efforts in South Africa and Zambia. He began his career as a newspaper reporter.

David earned his M.A. from The Elliott School of International Affairs at the George Washington University and his B.A. in Journalism and Political Science from Michigan State University.

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Lara Birkes

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Lara is responsible for leading BSR's Climate and Nature team globally and driving the organization’s work with Member companies' impact consulting, grants, and collaborative initiatives.  

Lara is a sustainability and policy professional with over fifteen years of experience managing partnerships, sustainability initiatives and policy engagement with companies, international organizations, governments, and NGOs.  

Prior to BSR, Lara was Global Head of Sustainability at Sonder, joining in 2020 to establish the corporate responsibility function, implementing policies to engrain responsible business practices across the company pre to post IPO. 

She also serves on the Advisory Board of EQX Biome, a start-up working to mobilize financial markets to protect the world’s remaining biodiversity hotspots. In 2024 Lara started hosting a web series & podcast called Nature IS to raise awareness of the critical need for protection, conservation, and regeneration of biodiversity.  

Lara holds a B.S. degree in International Business & Management from the University of Montana, a M.A. degree in International Trade Policy from the Middlebury Institute of International Studies in Monterey, California and is a World Economic Forum Global Leadership Fellow.  

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Jen Stark

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Jen serves as a director for BSR's Inclusive Business practice.

She is a strategy development and implementation expert at complex health and humanitarian organizations with 20+ years of experience. At BSR, she relaunched the Inclusive Business practice to meet the needs of companies navigating shifting regulation, policy, and litigation, alongside evolving business needs in the U.S. and around the globe.  

Prior to joining BSR, Jen directed investments at the Tara Health Foundation to advance gender and racial equity through the private sector, including historic progress on paid family and medical leave, reproductive health, and other workplace protections. Before working in philanthropy, she founded the corporate relations program at Planned Parenthood Federation of America. She also managed the disaster fundraising team at the American Red Cross, coordinating large scale efforts to responsibly raise and deploy hundreds of millions of dollars. She is frequently cited in business press on flashpoint topics and is an advisor to Gauge.ai, the University of Michigan’s Erb Institute, and GoFundMe’s Compassion Leadership Network. 

Jen holds a BA in Economics and Political Science from the University of North Carolina at Chapel Hill and is based in the greater Boston area with her family, where she also plays cello in a community orchestra.   

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Paloma Muñoz Quick

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Paloma leads BSR’s work on Human Rights Standards, including standard-setting, knowledge management, and helping companies respond to emerging standards and regulation. She is also Senior Advisor to BSR’s Finance & Human Rights Practice.

Prior to joining BSR, Paloma was Advisor to the UN Working Group on Business and Human Rights and Senior Consultant of the UN B-Tech Project, where she developed a vision for promoting the uptake of the UN Guiding Principles on Business and Human Rights among investors and guidance on responsible investment in digital technologies. Prior to the UN, Paloma launched and led the Investor Alliance for Human Rights, where she developed thought leadership on the investor responsibility to respect human rights and supported stewardship engagements across industries. She also worked at the Danish Institute for Human Rights advising companies, governments, and civil society on business and human rights.

Paloma is a member of the US government’s Advisory Committee on Responsible Business Conduct. She sits on the Editorial Board of Developments in the Field of the Business and Human Rights Journal of Cambridge University.

She holds a Master of International Affairs (M.I.A.) in Human Rights from the School of International and Public Affairs at Columbia University and a B.A. in Political Science, also from Columbia University. 

Paloma is Chilean-American and is fluent in English, Spanish, and Portuguese.