This paper discusses how financial institutions can construct climate pathway scenarios to quantify the financial impacts of climate risk. As regulatory and business expectations accelerate, insurers and pension funds need coherent and transparent scenarios that capture both physical and transition risks. The paper highlights the importance of structured scenario design to understand how different climate pathways affect assets, liabilities, and overall financial performance. It references the release of Phase 2 scenarios by the Network for Greening the Financial System in June 2021 as a significant advance, while noting that further refinement is needed. Well‑designed scenarios help institutions meet regulatory demands, improve comparability, and support better strategic, risk, and capita

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