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Storylines: A science‐based method for assessing and measuring future physical climate‐related financial risk

Author

Listed:
  • Tanya Fiedler
  • Nick Wood
  • Michael R Grose
  • Andy J Pitman

Abstract

Regulators increasingly require organisations to disclose their climate‐related financial risks. Most future physical climate risks present unique challenges, however, as their likely occurrence and consequence cannot be quantified with veracity at business‐relevant scales. Quantitative measurement thus renders preparers vulnerable to false precision, maladaptation, and litigation. We present an alternative method for assessing future physical climate‐related financial risk developed in the climate sciences, namely “storylines” (Shepherd et al., 2018). Storylines emphasise plausibility over probability, illustrate legally defensible and auditable futures, and allow the full expression of uncertainty. We conclude with recommendations and implications for integrating storylines into existing standards, frameworks and practice.

Suggested Citation

  • Tanya Fiedler & Nick Wood & Michael R Grose & Andy J Pitman, 2025. "Storylines: A science‐based method for assessing and measuring future physical climate‐related financial risk," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(2), pages 1908-1931, June.
    • Handle: RePEc:bla:acctfi:v:65:y:2025:i:2:p:1908-1931
    DOI: 10.1111/acfi.13295
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    References listed on IDEAS

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