Don’t Take the GARP SCR Without Reviewing This Final Checklist
- Kateryna Myrko
- 1 minute ago
- 7 min read
The GARP Sustainability and Climate Risk (SCR) Certificate is a globally recognized designation that tests knowledge across climate science, policy, sustainable finance, risk management, and reporting. This guide provides a structured final-week checklist based on the 2025 SCR curriculum, complete with key topics and concise explanations.
Chapter 1: Foundations of Climate Change
Exam Weight: 8–12 Questions
Key Concepts and What You Must Know: GARP SCR , GARP SCR Final Checklist
1. Climate vs. Weather
Weather describes short-term atmospheric conditions (e.g., rain today).
Climate refers to long-term statistical averages over decades (e.g., 30-year temperature trends).
Think of weather as a single dice roll, and climate as the pattern from thousands of rolls.
2. Greenhouse Effect and Energy Balance
Earth receives ~340 W/m² of solar energy. About 30% is reflected, the rest absorbed.
The greenhouse effect traps outgoing infrared radiation using gases like CO₂ and CH₄.
Without GHGs, Earth would be ~33°C colder.
3. Anthropogenic vs. Natural Drivers
Human drivers: CO₂ from fossil fuels, deforestation, industrial GHGs.
Natural drivers: orbital cycles, solar variability, volcanic activity—but too slow or weak to explain current warming.
4. GHGs and Their Impact
CO₂: long atmospheric lifetime (~500 years), dominant anthropogenic GHG.
CH₄: ~29x CO₂ in global warming potential over 100 years, but shorter-lived (~12 years).
N₂O, halocarbons, and ozone also contribute to radiative forcing.
5. Adaptation, Mitigation, Geoengineering
Adaptation = reducing vulnerability (e.g., seawalls, crop switching).
Mitigation = reducing GHG emissions (e.g., renewables, energy efficiency).
Geoengineering: Direct manipulation of Earth’s climate, like solar radiation management or carbon removal.
6. Shared Socioeconomic Pathways (SSPs)
SSP1 ("Green Road"): low emissions, sustainable development.
SSP2 ("Middle of the Road"): moderate trends, current policy trajectory.
SSP5 ("Fossil-fueled Development"): rapid economic growth but high emissions.
7. Carbon Budgets and Temperature Targets
To limit warming to 1.5°C, the remaining carbon budget is shrinking rapidly.
Current emissions (~40 GtCO₂/year) will exhaust the 1.5°C budget by early 2030s.
Chapter 2: Sustainability
Exam Weight: 8–12 Questions
Key Concepts and What You Must Know:
1. The Three Dimensions of Sustainability
Environmental: Ecosystem protection, biodiversity, climate resilience.
Social: Equity, human rights, community well-being.
Economic: Long-term economic viability, responsible growth.
2. ESG vs. Sustainability vs. Climate Risk
ESG is a toolset used to assess sustainability in investments.
Sustainability is broader—about long-term human and planetary viability.
Climate risk is a subset of ESG-related environmental risks.
3. UN SDGs and MDGs
SDGs (17 goals): e.g., Clean Energy (7), Climate Action (13), Life Below Water (14).
Promote alignment of corporate actions with global priorities (e.g., SDG mapping, materiality assessments). GARP SCR , GARP SCR Final Checklist
4. Natural Capital and Ecosystem Services
Natural capital = forests, water, soil, biodiversity.
Ecosystem services = benefits like flood protection, pollination, air purification.
5. Sustainability Reporting and Frameworks
GRI (Global Reporting Initiative): Standards for impact disclosures.
TCFD (Task Force on Climate-related Financial Disclosures): Focused on financial impact.
SASB (Sustainability Accounting Standards Board): Industry-specific metrics.
CDSB, CDP, ISSB: Other relevant frameworks.
6. Greenwashing and Greenwishing
Greenwashing: Misrepresenting sustainability credentials.
Greenwishing: Ambitious claims with little substance or execution plan.
7. Life Cycle Assessment (LCA)
LCA = cradle-to-grave assessment of environmental impact.
Key tool for evaluating the full sustainability of products or processes.
Chapter 3: Climate Change Risk
Exam Weight: 8–12 Questions
Key Concepts and What You Must Know:
1. Physical vs. Transition Risk
Physical risks:
Acute: Storms, wildfires.
Chronic: Sea-level rise, drought.
Transition risks: Result from climate policy, tech shifts, or market changes.
2. Stranded Assets and Human Capital
Stranded assets: Investments (e.g., coal plants) that lose value due to transition.
Stranded human capital: Workers with skills tied to carbon-intensive industries.
3. Transmission into Financial Risk
Climate risk affects:
Credit risk (default likelihood)
Market risk (asset price volatility)
Liquidity risk (ability to sell assets)
Operational risk (supply chain disruptions)
4. Modeling Challenges
Physical risk modeling: Needs granular geographic data, complex scenario assumptions.
Transition risk: Dependent on evolving policy, tech innovation, and consumer behavior.
5. Opportunities
Innovation in clean tech, insurance solutions, data analytics, and ESG-aligned products.
Firms leading in adaptation and mitigation may see competitive advantages.
Chapter 4: Sustainability and Climate Policy, Culture, and Governance
Exam Weight: 8–12 Questions
Key Concepts and What You Must Know:
1. International Climate Policy
Major agreements:
Kyoto Protocol (1997): binding targets for developed countries.
Paris Agreement (2015): limit warming to below 2°C, ideally 1.5°C.
National and subnational efforts complement global frameworks.
2. Emissions Accounting and GHG Protocol
Scopes 1–3:
Scope 1: Direct emissions.
Scope 2: Indirect from purchased energy.
Scope 3: Indirect emissions from the value chain (e.g., supplier emissions).
3. Carbon Pricing
Carbon tax: Set price per ton of CO₂.
Emissions Trading Scheme (ETS): Cap-and-trade; market sets the price.
4. Policy Instruments and Private-Sector Regulation
Green finance promoted through taxonomies and sustainability-linked instruments.
Central banks and supervisors integrate climate risk into regulation (e.g., NGFS guidelines).
5. Climate Governance and Culture
Corporate boards are increasingly held accountable for climate oversight.
Disclosure expectations now extend to governance, strategy, risk management, metrics.
Chapter 5: Green and Sustainable Finance
Exam Weight: 8–12 Questions
Key Concepts and What You Must Know:
1. Green, Social, and Sustainable Finance
Green finance: Environmental benefits (e.g., clean energy).
Social finance: Social outcomes (e.g., education, health).
Sustainable finance: Combines ESG considerations across financial flows.
2. Instruments and Products
Green bonds: Use-of-proceeds bonds tied to eligible green projects.
Sustainability-linked bonds (SLBs): Pricing tied to achieving ESG goals.
Green loans and sustainability-linked loans: Structured similarly to bonds.
3. ESG Integration in Investing
Negative screening: Excluding harmful sectors.
Positive screening: Choosing leaders in ESG performance.
Thematic investing: Focused funds (e.g., climate tech).
ESG integration: Embedding ESG into financial models and decisions.
4. Data, Ratings, and Materiality
ESG data is complex, non-standardized, and evolving.
Materiality varies by sector (double materiality = financial + societal impact).
5. Taxonomies and Regulation
EU Taxonomy: Defines sustainable activities.
SFDR (EU): Mandatory disclosure for asset managers.
ISSB: International standards convergence for sustainability reporting.
Chapter 6: Climate Risk Measurement and Management
Exam Weight: 8–12 Questions
Key Concepts and What You Must Know:
1. Micro vs. Macro Risk Transmission
Micro-level risks affect individual firms (e.g., facility flooding, regulatory penalties).
Macro-level risks influence financial systems, markets, and economies (e.g., widespread asset repricing, insurance industry stress).
2. Types of Climate-Linked Financial Risk
Credit Risk: Counterparty defaults due to climate-related losses.
Market Risk: Asset revaluation driven by physical or transition events.
Liquidity Risk: Market dislocation or frozen asset markets in climate stress events.
Insurance/Underwriting Risk: Increased claims from more frequent/severe catastrophes.
Operational Risk: Physical damages, supply chain breakdowns, reputational events.
3. Measurement Tools and Data Requirements
Company-level: Need asset-specific data for emissions and physical vulnerability.
Portfolio-level: Assess exposure concentration across sectors and geographies.
Transition risk uses emissions intensity, policy risk models, tech exposure.
Physical risk assessments rely on geo-spatial data and hazard maps.
4. Climate Risk in Enterprise Risk Management (ERM)
Climate risk must be embedded into:
Risk governance
Strategy and target-setting
Performance metrics
Reporting and disclosure cycles
5. Risk Culture and Internal Controls
Organizations should create a climate-aware risk culture, with climate KPIs linked to performance, executive compensation, and strategic planning.
Chapter 7: Climate Models and Scenario Analysis
Exam Weight: 8–12 Questions
Key Concepts and What You Must Know:
1. Scenario Analysis Framework
A structured tool for anticipating uncertain future states under different assumptions about climate, policy, and economic development.
Two key dimensions: Physical risk scenarios and transition risk scenarios.
2. Common Reference Scenarios
SSPs (Shared Socioeconomic Pathways): Demographic and economic pathways.
RCPs (Representative Concentration Pathways): Emission concentration levels.
IEA Scenarios: Industry-focused, updated frequently (e.g., NZE = Net Zero by 2050).
3. Inputs and Parameters
Scenarios include assumptions on:
Emissions trajectories
Carbon pricing
Technology adoption
Temperature and policy variables
4. Use Cases in Corporate and Financial Contexts
Corporates:
Resilience planning
Strategic investment
Stakeholder engagement
Finance:
Portfolio-level stress testing
Capital allocation and risk limits
Product pricing and disclosures
5. Practical Application
Effective scenario analysis should reflect:
Short-, medium-, and long-term timelines
Quantitative and qualitative outputs
Clear governance and transparency
Chapter 8: Net Zero
Exam Weight: 8–12 Questions
Key Concepts and What You Must Know:
1. Science Behind Net Zero and the 1.5°C Target
“Net Zero” = GHG emissions produced are balanced by removal efforts.
To meet the 1.5°C goal, global CO₂ emissions must decline ~45% by 2030 and reach net zero by 2050.
2. Global and Corporate Commitments
Countries:
U.S.: Net zero by 2050
EU: -55% by 2030 vs 1990 levels
China: Net zero by 2060
Corporates:
Science-based targets, verified by SBTi
Sectoral transition pathways
3. Transition Plans
Effective plans should include:
Strategy and governance
Interim targets and milestones
Capital allocation
Risk and opportunity mapping
4. Metrics and Indicators
Common metrics:
Emissions intensity (per unit revenue/output)
Carbon budget alignment
CapEx alignment with net-zero objectives
5. Reporting and Disclosure
Standards:
TCFD-aligned transition plans
CDP, ISSB, GRI for tracking commitments
Transparency around offsets vs. real reductions
Chapter 9: Climate and Nature Risk Assessment
Exam Weight: 8–12 Questions
Key Concepts and What You Must Know:
1. Climate-Related Financial Risk (CRFR)
Expands beyond carbon to nature-related and biodiversity risks.
Includes both physical and transition risks related to ecosystems.
2. Nature-Related Risks and Dependencies
Biodiversity Loss: Reduces resilience of natural systems.
Ecosystem Services: Pollination, water purification, etc., are at risk.
Water Risk: Includes scarcity, flooding, and quality issues, which affect credit risk and valuation.
3. Assessment Frameworks
TNFD (Taskforce on Nature-related Financial Disclosures): In development, modeled on TCFD.
NGFS and EU initiatives provide tools for integrating nature risk into financial decisions.
4. Data Sources and Methodologies
Use geospatial and satellite data to map exposure.
Financial institutions need sector-specific and location-specific data to assess dependencies and impacts.
5. Scenario Use Cases
Understand how ecosystems degrade under different climate scenarios.
Nature-related scenario analysis is an emerging but essential area for risk managers.
Chapter 10: Transition Planning and Carbon Reporting
Exam Weight: 8–12 Questions
Key Concepts and What You Must Know:
1. Components of a Credible Transition Plan
Ambition: Clear net-zero target with emissions pathways.
Action: Defined strategies and policies to reach the goal.
Accountability: Governance and oversight mechanisms.
Disclosure: Transparent progress reporting.
2. Carbon Accounting and Reporting Standards
GHG Protocol: Most widely used framework; distinguishes:
Scope 1: Direct operations
Scope 2: Purchased energy
Scope 3: Value chain (often >70% of total emissions)
3. Organizational Boundaries
Two key methods:
Equity share approach: Based on ownership percentage.
Control approach: Based on operational control.
4. Financed Emissions
Financial institutions measure emissions tied to loans, equity, and bond holdings.
Key tool: PCAF (Partnership for Carbon Accounting Financials).
5. Reporting Frameworks and Data Quality
Emerging standards (ISSB, SEC climate rules, EFRAG).
Emphasis on auditability, completeness, and comparability.
Voluntary vs. mandatory: Increasing convergence expected globally.
This checklist is your last-week guide to exam success. Focus on high-weighted concepts, practice applying them to case-style scenarios, and stay sharp on definitions and frameworks. The SCR exam rewards applied understanding, so reviewing answers in context is essential.
Enhance your GARP SCR exam preparation with our comprehensive study packages —get started today to achieve success in 2025 exam window!
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