The task
To comply with the TCFD requirement to use climate-related scenarios in planning and to inform Pepkor’s climate response.

The challenge
Pepkor faced several challenges in applying scenario planning to climate action:

• Complexity and uncertainty of the transition environment: South Africa’s Just Transition is widely seen as struggling, characterised by slow progress in closing coal plants, limited community involvement, persistent load shedding and significant lobbying by high emitters. These dynamics delay regulatory action, increase uncertainty and threaten South Africa’s ability to meet its climate commitments.
• Scenario planning complexity: Scenarios are often presented as highly technical abstractions, limiting accessibility for operational teams.
• Consultant-led processes: Exercises are frequently shaped by external consultants without deep on-the-ground understanding.
• Static outputs: Scenarios are often one-off exercises that lack dynamism.
• Low engagement: For busy teams, scenario exercises can feel like a grudge activity with little lasting impact, as people often revert to ‘business as usual’ the following week.

The approach
Pepkor grounded its approach in its core purpose: to make a difference by solving customer needs and making life’s essentials affordable and accessible to all. Affordability requires resilience to climate shocks and volatility, ensuring the company can continue to deliver value to customers. It also requires us to maximise the value of every sustainability engagement with busy teams.

Key elements of the approach included:

• Using established scenarios: Rather than reinventing the wheel, Pepkor drew on existing climate-related scenarios.
• Global: Reviewed the NGFS May 2025 short-term scenarios, which outline four plausible transition pathways. The aim was not detailed interrogation, but translation of insights into concrete action.
• National context: Considered South Africa’s LT-LEDS, the Just Energy Transition Investment Plan (JET-IP), the Presidential Climate Commission pathways and modelling linked to the Climate Change Act, 2024 (including emerging sectoral targets).
• Water risk: Integrated the Pepkor Group’s 2024 Water Risk Scenarios (developed with WWF) based on IPCC RCPs and IIASA SSPs, providing 2030 and 2050 projections.
• Shared reference point: Adopted existing scenarios as common ground, acknowledging that multiple futures are credible. For Pepkor, what matters is not predicting a single trajectory but being ready to act under any of them.

The method
To operationalise this, Pepkor applied Estuarine Mapping (developed by The Cynefin Company, global leaders in applied complexity science,) to strategy and risk planning. This adaptive method helps organisations explore boundaries of certainty, identify safe-to-fail experiments and track signals of change.

The method enabled Pepkor to:

• Focus on actions that build resilience and improve emissions performance now, without overcommitting to forecasts.
• Identify constraints and opportunities across the value chain, considering them in relation to shifting policies, energy costs and consumer trends.
• Build habits of scanning, learning and adjusting dynamically.

In February 2025, the sustainability team introduced Estuarine Mapping through workshops with key operational teams: merchandise, supply chain, logistics and manufacturing.

Over the following months, teams mapped the ‘possibility space’ – clarifying what was possible, what was not and what safe-to-fail experiments could be attempted.

Teams provided feedback on mitigation and adaptation actions they had integrated into their core business plans.

This marked a shift from static scenario planning to a dynamic, participatory process.

The results
Expected outcomes:

• Teams engaged actively in the process.
• Mapping was easier and more intuitive than expected.
• Teams identified both current practices and new opportunities to improve climate resilience, spanning mitigation and adaptation.

Unexpected outcomes:

• High enthusiasm: Teams enjoyed the process and felt heard.
• Psychological safety: Discussions shifted from the need for personal responsibility or ‘mindset change’ to collective navigation of volatility and uncertainty.
• Recognition of progress: Teams saw how much had already been achieved despite constraints of discount retail and lean operations.
• Cross-silo insights: Workshops revealed opportunities linking logistics, supply chain and merchandising.
• Carry-over effects: Participants took new ideas back to their teams, with some sharing insights beyond the workshops.
• Mindset shift: The process reframed how teams think about climate risk and action, as well as the broader sustainability transition.

What we learned
By coupling established climate scenarios (NGFS, SSPs, national pathways, Pepkor’s Water Risk scenarios) with an adaptive planning method (Estuarine Mapping), Pepkor is consolidating its ability to respond intelligently and responsibly to an uncertain future.

This approach balances TCFD’s expectations for scenario use with the company’s operational need for agility, affordability and practical progress on climate risks and opportunities.