AASB S2 requires entities to assess the resilience of their strategy under climate scenarios, and unlike the international standard, Australia mandates the anchors. You must use at least two scenarios: one consistent with limiting warming to 1.5°C above pre-industrial levels, and one where warming well exceeds 2°C. One tests your exposure to a fast transition; the other tests your exposure to physical climate change itself.
The output is not a prediction. A resilience assessment asks: under each scenario, what happens to our assets, our supply chain, our markets and our obligations, and does the strategy survive? For physical risk that means working asset by asset: flood, heat, wind, fire and drought exposure at each site, under each warming pathway, over the asset's actual life. For transition risk it means carbon price trajectories, demand shifts and policy timelines applied to your revenue mix.
What separates a defensible analysis from a decorative one is traceability of assumptions. Which climate projections were used, at what resolution, downscaled how? Which discount rate, which asset lives, which adaptation assumed? Every one of those choices must be disclosed, and every one will be probed as assurance tightens. A spreadsheet built by a consultant two years ago, with assumptions nobody can reconstruct, fails that test the first time someone asks a question.
The practical standard to aim for: financial impact per hazard, per asset (expected annual loss and NPV under each scenario) with every assumption versioned and on the table. That is what ClimateRiskAgent produces from downscaled Australian climate data, so the resilience assessment in your report is a query on a maintained register rather than a one-off engagement.
Scenario analysis feeds the strategy pillar of the disclosure requirements; its emissions counterpart is the Scope 3 inventory.