Next Generation Climate Scenarios: What UK Businesses Need to Know

EU commits €24 million to climate scenario research

The European Commission has outlined plans for a major research initiative that will rethink how climate scenarios are developed and used. The Horizon Europe call, opening in November 2026, aims to move scenario analysis beyond traditional emissions modeling. Instead, it will fund work that integrates physical climate impacts, adaptation needs, and practical decision-making tools for businesses and policymakers.

For UK businesses working across European supply chains or bidding on EU-funded contracts, this shift signals something important. Climate scenario work is becoming more tied to real-world planning. Companies that understand how these scenarios inform policy and investment decisions will be better placed to anticipate regulatory change and align their strategies accordingly.

The research topic sits within Cluster 5 of Horizon Europe and carries an indicative budget of €24 million. It opens on 17 November 2026, with a deadline of 4 March 2027. The Commission has assigned it the topic ID HORIZON-CL5-2027-01-D1-13.

Research priorities focus on practical outcomes

According to the Commission’s documentation, this call addresses a gap in current scenario analysis. Existing climate scenarios often focus heavily on emissions pathways. However, they tend to give less attention to physical impacts, adaptation limits, and the costs of transition. This new research action aims to correct that imbalance.

The topic description emphasizes several core priorities. Funded projects will need to account for multiple climate domains, not just temperature or carbon. They should also consider biodiversity interactions and how ecosystems respond to climate stress. Importantly, the scenarios must reflect a wider range of plausible futures under changing socio-economic and environmental conditions.

The Commission has framed this as a shift from forecasting to decision support. Scenarios developed under this call should inform policy interventions and help diverse end-users make informed choices. That includes national governments, regional authorities, investors, and businesses planning long-term strategies.

One line from the official materials makes the intent clear. The topic is designed for “next generation scenarios for informing climate and sustainability transitions” and aims at achieving “climate neutrality and resilience in Europe by 2050.” Consequently, the work funded under this call will cover more than emissions. It will also address resilience, adaptation, and broader sustainability transitions.

How scenario research influences business planning

Climate scenarios are already used by financial regulators, investors, and large corporations to assess transition risks. The Bank of England, for example, uses scenarios to stress-test how banks would perform under different climate futures. Similarly, many pension funds and asset managers rely on scenario analysis to evaluate long-term portfolio risks.

This research call suggests that scenario tools will become more granular and more directly applicable to sectoral planning. If funded projects succeed in integrating adaptation costs and physical impacts, businesses will have access to scenarios that better reflect operational realities. That means clearer guidance on infrastructure resilience, supply chain disruption, and resource availability.

For manufacturers, logistics companies, and construction firms, this matters in practical terms. Current climate scenarios often underplay adaptation costs or assume smooth transitions. In reality, businesses face hard choices about asset write-downs, stranded investments, and the timing of capital expenditure. Better scenarios could help firms model these trade-offs more accurately.

Furthermore, improved scenario analysis could influence public procurement and tender criteria. EU-funded infrastructure projects and public contracts increasingly require climate risk assessments. If the Commission adopts more sophisticated scenario frameworks, those requirements will likely tighten. Businesses bidding on public contracts may need to demonstrate that their proposals are resilient under a wider range of climate futures.

The research agenda also has implications for supply chain management. Companies sourcing materials or components from climate-vulnerable regions need to understand physical risks such as flooding, drought, and heatwaves. Traditional scenarios often treat these as secondary considerations. However, the new research will place them at the center of analysis. As a result, businesses may gain better tools to assess supplier risks and diversify sourcing strategies.

Funding structure and timeline details

The call is structured as a Research and Innovation Action under Horizon Europe. This means it will fund collaborative research projects that produce new knowledge and practical outputs. The indicative budget of €24 million will be distributed among successful consortia. The Commission expects proposals to involve multiple partners across different EU member states.

The opening date is set for 17 November 2026, although some EU portals list 16 November 2026. The deadline for submissions is 4 March 2027 at 01:00 CET. This gives potential applicants approximately three and a half months to prepare proposals once the call opens.

Proposals will need to demonstrate how their research addresses the topic’s core objectives. That includes showing how scenarios will be made relevant to diverse end-users and how findings will support policy interventions. The Commission also expects projects to engage with stakeholders throughout the research process, ensuring that outputs are usable by policymakers, businesses, and civil society.

The topic sits within a broader cluster of Horizon Europe funding. The overall indicative budget for the cluster section containing this topic is €123 million. Therefore, this research action represents a significant portion of available funding in this area. It reflects the Commission’s view that improving scenario analysis is a priority for achieving climate neutrality and resilience by 2050.

Research outcomes UK businesses should monitor

• Projects funded under this call will develop scenarios that integrate physical climate impacts, adaptation costs, and mitigation pathways into a single framework.
• The research will produce tools designed for decision-making by governments, investors, and businesses, not just academic modeling.
• Outputs are expected to account for biodiversity interactions and multiple climate domains, providing a more complete picture of transition risks.
• Scenarios will reflect a wider range of plausible futures, helping businesses plan for uncertainty rather than single pathways.
• The Commission aims to improve the quality and usability of climate scenario analysis for policy design, investment planning, and cross-sector transition strategies.

What this means for sustainability strategy

UK businesses should pay attention to this research initiative even though it is an EU program. The scenarios developed through this funding will influence European climate policy, and many UK firms operate in European markets or supply European customers. Understanding the analytical tools that inform EU policy helps businesses anticipate regulatory direction and align their sustainability strategies accordingly.

Climate scenario analysis is already becoming more important in corporate reporting. The Task Force on Climate-related Financial Disclosures (TCFD) requires companies to use scenarios when assessing climate risks. As scenario tools become more sophisticated, disclosure expectations will likely rise. Businesses that stay informed about developments in scenario research will be better prepared to meet evolving reporting standards.

There is also a practical opportunity here. Firms involved in sustainability consulting, climate risk assessment, or environmental data services may find it useful to track the research outputs. The methodologies and tools developed under this call could inform commercial offerings and help businesses provide more robust advice to clients.

For companies with science or research capabilities, this call represents a potential funding opportunity. UK organizations can participate in Horizon Europe consortia, provided they meet the eligibility criteria. Businesses with expertise in climate modeling, impact assessment, or decision-support tools may consider joining collaborative proposals. However, they should check the latest guidance on UK participation in Horizon Europe, as arrangements have evolved since Brexit.

More broadly, this initiative reflects a shift in how climate policy is developed. The Commission is moving toward evidence-based tools that can handle complexity, uncertainty, and trade-offs. Businesses that understand this shift will be better positioned to engage with policymakers, contribute to consultations, and shape the regulatory environment in which they operate.

We work with businesses to align sustainability strategies with regulatory developments and market expectations. Our compliance support services help firms navigate evolving climate disclosure requirements and integrate scenario analysis into their planning processes.

Where to find further details

The official topic description and application guidance are available through the EU Funding and Tenders Portal. Businesses interested in the research outputs or participation should monitor that platform for updates as the call opening date approaches.

The European Commission’s Horizon Europe website provides background on Cluster 5 and the broader research agenda for climate, energy, and mobility. This context helps businesses understand where this specific call fits within EU research priorities.

For UK businesses considering participation, UK Research and Innovation (UKRI) publishes guidance on Horizon Europe eligibility and association arrangements. This information is essential for understanding how UK organizations can join consortia and access funding.

National contact points for Horizon Europe also provide support to potential applicants. These organizations offer advice on proposal preparation, partnership building, and compliance with EU research funding rules. Businesses new to Horizon Europe should consider reaching out to these contact points early in the process.