3 Hardest Topics on the October 2025 GARP SCR—and How to Conquer Them

Kateryna Myrko
Jul 30
4 min read

The SCR exam assesses not only your knowledge of sustainability frameworks and climate science but also your ability to apply them in practical risk‑management contexts. Three topic areas consistently trip up candidates:

Climate Risk Measurement & Management (12–18% of questions)
Climate Models & Scenario Analysis (8–12% of questions)
Net‑Zero Planning & Transition Reporting (4–6% of questions)

These topics demand both conceptual understanding and hands‑on analytical skills. Below, we map each area’s core learning objectives to targeted study tactics, ensuring you focus on exactly what the advisory committee deems essential .

1. Climate Risk Measurement & Management

Exam Weight: 12–18 questions

Core LOs:

Explain how climate risk translates into financial‑risk categories (operational, credit, liquidity, underwriting) .
Describe CVaR and its uses and identify analytical tools/sources for measuring physical and transition risks at company and portfolio levels .
Integrate climate‑risk drivers into ERM frameworks and apply case‑study examples.

Why It’s Tough

Heavy Quantitative Focus: You must adapt traditional risk metrics (VaR, CVaR) to fat‑tailed, climate‑driven loss distributions.
Data Challenges: Climate data (e.g., flood frequency, temperature projections) require careful vetting before feeding into risk models. Hardest Topics on the October 2025 GARP SCR
Systemic Links: Beyond firm‑level impacts, you need to articulate how climate shocks propagate through markets and sovereign exposures.

Action Plan Hardest Topics on the October 2025 GARP SCR

Formula Mastery & Derivation Workshops
- Build a one‑page “cheat sheet” with each metric’s formula, assumptions, and interpretation.
- In study pods, take turns deriving CVaR from a hypothetical loss distribution, then discuss its limitations in the face of non‑normal risks.
Hands‑On Modeling Exercises
- In Excel or Python, simulate a simple loss distribution (e.g., annual flood losses modeled via log‑normal) and compute VaR/CVaR at multiple confidence levels.
- Experiment with “stress‑tail” scenarios by increasing distribution variance and observing how CVaR escalates—this cements the importance of fat‑tail modeling.
Case‑Study Drill‑Downs
- Use the TCFD’s example of credit‑portfolio stress‑testing under physical‑risk scenarios; calculate incremental expected losses, then map them to capital buffer requirements .
- Reverse‑engineer published stress‑test exhibits: identify the input assumptions, reconstruct key outputs, and critique methodology.
ERM Integration Mapping
- Outline how climate‑risk metrics slot into each ERM component: governance (board oversight), strategy (risk appetite), risk evaluation (CVaR thresholds), and reporting (dashboard KPIs).
- Annotate real‑world ERM frameworks (e.g., a bank’s climate‑risk charter) to see terminology alignment.

2. Climate Models & Scenario Analysis

Exam Weight: 8–12 questions

Core LOs:

Define climate scenario analysis and explain how organizations use both global net‑zero and RCP/SSP pathways .
Describe how scenario analysis assesses both transition and physical risks and how financial firms integrate these into investment and risk‑management processes .

Why It’s Tough

Multiplicity of Frameworks: You must distinguish IPCC’s RCPs/SSPs, IEA reference paths, and NGFS scenarios—each with unique assumptions.
Analytical Justification: Beyond naming scenarios, you need to justify which pathway fits a given portfolio’s sector exposures.
Case‑Based Complexity: Multi‑part questions often present mixed physical‑ and transition‑risk outputs, demanding rapid interpretation and response planning.

Action Plan

Scenario‑Attribute Matrix
- Create a table contrasting the key features of major scenarios: peak warming, policy levers (carbon tax vs. cap‑and‑trade), energy‑mix assumptions.
- For each scenario, annotate likely sectoral impacts—e.g., heavy industry vs. financial services—to link paths to risk exposures.
Timed Exhibit Interpretations
- Collect at least ten multi‑part SCR practice questions involving scenario exhibits. Under 30‑minute timed conditions, practice:
  1. Reading the exhibit (3 min)
  2. Identifying the most material assumption (5 min)
  3. Drafting a concise risk‑management recommendation (10 min)
  4. Reviewing and refining answers (12 min)
Assumption Sensitivity Labs
- Take one scenario (e.g., IEA NZE) and tweak a key input—such as renewable‑cost decline rate—then recalculate a financial output (e.g., carbon‑price forecast).
- Discuss in a study group how this sensitivity informs which scenario assumption “moves the needle” most on credit losses.
Application‑Essay Outlines
- Weekly, write 200‑word outlines explaining your scenario choice for a hypothetical corporate‑loan portfolio, justifying with risk‑trade‑off reasoning.
- Exchange outlines with peers to hone clarity and ensure alignment with exam‑style expectations.

3. Net‑Zero Planning & Transition Reporting

Exam Weight: 4–6 questions

Core LOs:

Explain the concept of net zero, key alliances (e.g., UN Race to Zero), and attributes of credible net‑zero targets .
Describe how organizations use transition plans—covering interim targets, governance, metrics, and disclosure standards—to embed decarbonization into strategy .

Why It’s Tough

Regulatory Evolution: With IFRS S2 and local mandates (e.g., EU CSRD), candidates must stay current on disclosure requirements.
Qual‑Quant Blend: You need to critique narrative governance structures (board‑level oversight) alongside quantitative pathways (emissions trajectories).
Credibility Criteria: Distinguishing token commitments from truly robust net‑zero roadmaps requires judgment honed through real‑world examples.

Action Plan

Framework Flashcards
- Develop cards for each of IFRS S2’s five pillars—Governance, Strategy, Risk Management, Metrics, Targets—with one real‑company example per pillar.
- Include “common pitfalls” per pillar (e.g., missing Scope 3 boundary disclosures under Metrics).
Transition‑Plan Tear‑Downs
- Source three publicly available transition plans (from utilities, manufacturing, and finance). For each:
  - Identify the stated interim targets and underlying methodologies.
  - Flag any governance or disclosure gaps (e.g., absent third‑party validation).
  - Write a 100‑word critique focusing on credibility and transparency.
Mini‑Plan Drafting
- Given a hypothetical company’s baseline emissions and sector, draft a one‑paragraph net‑zero roadmap: select SBTi target type, outline governance oversight, and specify reporting cadence.
- Peer‑review these snippets to ensure they reflect best practices and exam relevance.
Regulatory Tracker
- Maintain a shared document tracking major policy updates (e.g., IFRS S2 amendments, PCAF guidance) with one‑sentence summaries of their implications for transition reporting.
- Review weekly to ensure your exam answers cite the latest frameworks.

By aligning your study with the official Learning Objectives—anchored in the 2025 SCR Study Guide—you can transform the three most challenging topics into pronounced strengths:

Climate Risk Measurement & Management: Achieve formula fluency, hands‑on modeling, and ERM integration.
Climate Models & Scenario Analysis: Master scenario attributes, timed exhibit interpretation, and sensitivity drills.
Net‑Zero Planning & Transition Reporting: Hone your qualitative critique skills, mini‑plan drafting, and regulatory acumen.

Integrate these tactics into a structured study calendar, leverage peer collaboration for accountability, and prioritize active learning over passive review. With disciplined focus on these high‑weight, application‑oriented topics, you’ll go into the October 2025 SCR exam fully prepared to demonstrate both technical rigor and real‑world judgment.

Good luck!