New climate change projections: What CMIP7 means for companies assessing climate risk

The publication of the framework for CMIP7 marks the most significant shift in the scientific basis of climate scenario analysis since the Paris Agreement (which coincided with CMIP6). Two changes stand out: the current highest global emissions scenarios (SSP5-8.5) are no longer feasible now lower than in the previous scenario sets, while the new lowest emissions scenario no longer keeps warming below 1.5°C throughout the century. For organisations conducting climate risk assessments, project planning, or navigating mandatory disclosure frameworks, both shifts have direct practical consequences.

What has changed, and why

CMIP7 introduces seven new scenarios from High to Very Low. This simplifies the current naming convention with descriptive tier labels to better reflect each pathway.

In designing CMIP7, the scenario development team reassessed questions of plausibility that had been raised in the scientific literature for the most extreme CMIP6 scenarios, most notably SSP5-8.5 and SSP1-1.9, in alignment with the world’s latest emissions trajectory. That process produced a range that no longer includes the most extreme ends of the CMIP6 set. The table compares the old and new scenarios, based on the projected 2100 temperatures:

Data selection: the practical question

For mandatory disclosure

The global disclosure landscape is varied, but as reporting regimes coalesce around International Financial Reporting Standards (IFRS) S2, companies are being pushed to assess both a high- and low-warming scenario. For many the default has been to use the “extremes” (SSP1-1.9 and SSP5-8.5) in order to test the full range of possible exposure.

As those end-cases are to be phased out, companies should look to the less extreme data sets from CMIP6 (i.e. SSP1-2.6 and SSP3-7.0) to ensure that the analysis focuses on plausible futures, support decision-making, and can be readily translatable once the CMIP7 data is available.

For project-level climate risk analysis

Outside of mandatory disclosure, assessments for project-level climate risk should be driven by their intended purpose, taking into account factors such as the asset's design life, criticality and the consequences of failure. The examples below illustrate how this principle can be applied in practice:

• Long-life critical infrastructure (e.g. ports, seawalls, major bridges; 50+ year design life): Use Shared Socioeconomic Pathway (SSP) 5-8.5 as a stress-test, especially for infrastructure projects where failure consequences are severe and decision-makers need to examine outcomes beyond the currently plausible scenario range. SSP3-7.0 may still be useful for less critical assets and when assessing a more likely impact range for day-to-day operations.
• Operational assets and business systems (e.g. supply chains, logistics networks, insurance portfolios; 10-30 year horizon): Use SSP3-7.0 as the high-end scenario, as it captures material physical climate risks within a plausible range of future warming. In most cases,SSP5-8.5 is likely to overstate exposure relative to decision-relevant outcomes.
• Capital investment and adaptation planning (e.g. industrial facilities, mines, energy assets): Assess performance across SSP1-2.6 and SSP3-7.0 to test resilience under both lower and higher warming futures. This provides a decision useful range that is consistent with the transition toward CMIP7 scenario frameworks.

What should you do now?

For most organisations, the immediate priorities are:

Reviewing your scenario selection

If your current analysis relies on SSP1-1.9 as the low-warming scenario, that choice will require increasing justification. SSP1-2.6 is the better supported default. If SSP5-8.5 appears as a reference or even ‘business-as-usual’ scenario, that framing needs updating.

Document the rationale

Whether for disclosure or project planning purposes, the reasoning behind scenario selection is increasingly subject to scrutiny from auditors, investors, lenders, and regulators. The shift in scientific consensus provides a clear and defensible basis for updated choices, but that basis needs to be articulated explicitly.

Plan for CMIP7 data migration

Organisations investing in climate risk frameworks now should design them to accommodate CMIP7 datasets as they become available, rather than rebuilding from scratch. The risk logic and governance structures developed under CMIP6 can carry forward; the underlying climate data must be updated.

How SLR can help

SLR supports organisations globally with physical climate risk modelling, climate scenario analysis, and mandatory climate-related financial disclosure under IFRS S2 and equivalent frameworks. If you would like to discuss how CMIP7 developments affect your analysis or disclosure approach, please get in touch.