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Exam SCR topic 1 question 68 discussion

Actual exam question from GARP's SCR
Question #: 68
Topic #: 1
[All SCR Questions]

The CRO for a large agriculture company reviews reference scenarios as part of an annual climate scenario analysis exercise. The CRO creates a transition risk matrix that compares four different scenarios - W, X, Y, Z. Scenarios are compared according to scale of emissions cuts and pace of emission cuts. Scale is depicted as business as usual (BAU) to net-zero. Pace is depicted as orderly to disorderly. The CRO uses this matrix to explain transition risk to the company’s executive members:

How should the CRO rank the reference scenarios from lowest level of transition risk to highest level of transition risk?

  • A. Lowest = Y; Highest = X
  • B. Lowest = W; Highest = Z
  • C. Lowest = Z; Highest = W
  • D. Lowest = X; Highest = Y
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Suggested Answer: D 🗳️


Chosen Answer:
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1 day, 23 hours ago
Selected Answer: A
Transition risk is higher when emissions are cut more drastically (net-zero emissions by 2050 scenario versus a current policies or business-as-usual scenario), and when emissions cuts are more abrupt (disor-derly versus orderly transition).
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