Climate-Related Financial Risk

Assess how climate-related drivers could translate into credit, investment and business exposures.

Clients may understand their sustainability objectives without having a clear view of the financial risks associated with climate-related change. We examine how physical hazards and transition-related developments could affect relevant sectors, counterparties and portfolios.

Our work is proportionate to available data and explicit about uncertainty. Clients receive an exposure assessment, scenario-based analysis where appropriate and recommendations for incorporating the findings into existing risk processes.

Steps and deliverables

6 steps, in order. The scope of each is agreed at the start.

  1. A patchwork of fields seen from the air

    Exposure and data mapping

    We map the relevant sectors, counterparties and portfolios, and the data available for each.

  2. Flooded fields and woodland seen from the air

    Physical and transition risk screening

    We screen for physical hazards and transition-related developments that could affect them.

  3. A seedling growing from a rolled euro banknote

    Materiality assessment

    We assess which climate-related drivers could be financially material.

  4. A plain of dry, cracked earth

    Scenario and sensitivity analysis

    Scenario-based analysis where appropriate, proportionate to the data available.

  5. Wind turbines across green hills, seen from the air

    Governance and monitoring recommendations

    Recommendations for incorporating the findings into existing risk processes.

  6. A stack of bound volumes with a ribbon marker

    Findings report and limitations statement

    A findings report that is explicit about uncertainty and the limits of the analysis.

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Credit and Counterparty Risk

Understand borrower, issuer and counterparty exposures through independent assessment and portfolio analysis.

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