New to Climate Risk? En-ROADS Can Help

By Katherine Markova
September 9, 2025

Finance and accounting professionals are increasingly encountering the challenge of understanding climate change in financial terms. Traditionally, financial reporting focused on past extreme weather events, with fewer tools available to assess forward-looking climate risks. These risks were often considered distant or difficult to quantify in present-day financial statements.

But the landscape has shifted. Countries representing over half of global GDP are now at various stages of mandating climate-related disclosures in mainstream financial reporting (source). Increasingly, responsibility for managing climate risk is shifting from sustainability teams to finance functions, and one of the fastest-growing roles in the field is that of an ESG Controller, a role that combines both skillsets (source).

Yet most finance professionals don’t have the time (or need) to become climate experts. Instead, they need focused, actionable knowledge on:

• Physical and transition risks
• Scenario analysis relevant to business and financial planning

From Reports to Real-Time Learning: Enter En-ROADS

En-ROADS, developed by Climate Interactive and MIT Sloan, is a global climate policy simulator that’s:

• Freely available and fully-documented
• Updated monthly with the latest science
• Capable of modeling both transition risks (e.g. carbon pricing, electrification) and physical risks (e.g. temperature rise, sea level rise)

With En-ROADS, even those starting from scratch can quickly gain the knowledge needed to understand, and explain, climate risks and solutions.

What Physical Risks Can I Assess in En-ROADS?

En-ROADS allows users to visualize five key physical climate risks, with data typically downscaled to 22x22 km resolution:

• Sea level rise
• Extreme heat days
• Extreme heat and humidity days
• Wildfire danger days
• Likelihood of prolonged drought

These indicators help companies carry out qualitative scenario analysis by modeling policy futures and their effects on physical and systemic risks. That includes not only direct damage, but also downstream global effects like:

• GDP loss
• Biodiversity decline
• Reduced crop yields
• Labor productivity losses from heat

Thoughtful Scenario Analysis

Scenario analysis asks: Is your business model resilient to climate change and the energy transition? For example: What happens to a gas station operator if more than 25% of new vehicle sales are electric?

En-ROADS allows users to take a global view of physical and transition risks and is a great supplement to more granular models that assess company and sector-specific risks. With En-ROADS, you can:

• Build your own tailored scenarios
• Adjust key assumptions in real-time
• Focus on business-relevant insights

Here’s one example: a delayed transition scenario where the electricity grid decarbonizes, but nature-based solutions and non-CO₂ emissions are neglected.

Not Ready to Build Your Own Scenario? No Problem.

For those who prefer to start with established scenarios, En-ROADS can approximate widely used climate scenarios, including those developed by the Network for Greening the Financial System (NGFS). Our interpretation of the NGFS Below 2°C scenario in En-ROADS is here.

The benefits?

• Easier to explain to colleagues, clients, and leadership
• Great starting point for further experimentation

Many preparers struggle to understand the assumptions behind scenarios like NGFS. For example, on the surface it may appear that the only inputs are GDP and population growth and a shadow carbon price but the reality is more complex. En-ROADS helps make the complex more accessible. You can learn more about NGFS scenarios and how they compare to the En-ROADS baseline here.

Case Study: When the Audit Team Needs Climate Fluency

Let’s say you’re the lead audit partner for a vertically integrated fossil fuel company. Your client claims they’ll remain a going concern because carbon capture and storage (CCS) will allow continued natural gas production.

As lead partner, you’ll be supported by ESG specialists but ultimately, your name is on the auditor’s report. You must assess whether the client’s CCS projections are reasonable under a range of “What If” scenarios.

This kind of climate knowledge needs to exist across the engagement team, from junior associates to the partner group. En-ROADS helps you get there quickly and credibly.

Why En-ROADS Is a Solution Urgently Needed Now

Given the urgent need for cost-effective, accessible, and scientifically rigorous tools, especially for preparers without internal climate modeling capabilities, En-ROADS stands out as a practical solution.

Whether you’re a preparer, an accounting body, or a regulator, En-ROADS helps:

• Build internal climate governance
• Strengthen the quality of scenario analysis
• Support implementation of, or compliance with, new legislation

Want to Learn More?

Get in touch with us at solutions@climateinteractive.org to explore how En-ROADS can support your climate capacity building, risk analysis, and scenario analysis needs.