What is an appropriate use of scenario analysis in SASB Level II?

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Multiple Choice

What is an appropriate use of scenario analysis in SASB Level II?

Scenario analysis focuses on exploring plausible future conditions and how they could affect material sustainability topics and the metrics and disclosures used to report them. In SASB Level II, this approach helps assess resilience and uncertainties by imagining different future states (for example, regulatory changes, physical risk, or market shifts) and examining how these states would influence performance indicators and the related disclosures. It’s about forward-looking effects, not just what happened in the past or a single forecast of earnings. It also complements qualitative disclosures by providing context and potential quantitative impacts under alternative futures.

Scenario analysis focuses on exploring plausible future conditions and how they could affect material sustainability topics and the metrics and disclosures used to report them. In SASB Level II, this approach helps assess resilience and uncertainties by imagining different future states (for example, regulatory changes, physical risk, or market shifts) and examining how these states would influence performance indicators and the related disclosures. It’s about forward-looking effects, not just what happened in the past or a single forecast of earnings. It also complements qualitative disclosures by providing context and potential quantitative impacts under alternative futures.

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