Climate Risk
With the growing awareness of risks posed by climate change and the accelerated mandates from major global regulators, financial institutions are beginning to prioritise their attention on climate risk management. However, unlike the other risk categories, climate risk poses several unique challenges. Some of these are:
- Inadequate availability of data (at company level and climate hazards)
- Need to model scenarios over 30+ year horizons
- Limited understanding of risk transmission channels
- Standardised methodologies yet to evolve
- Translation of climate risk into tangible financial impact
RISE is well positioned to develop standardised solutions that solve these problems by leveraging its domain capabilities, access to data partnerships, and – most importantly – collaborative insights from global financial institutions.
RISE's climate risk industry ecosystem solution includes peer benchmarking studies, consulting services, scorecard validation, sector-specific frameworks, obligor level reports and stress testing.
Value Drivers
- Collaborative approach to drive best practices into the implementation of the solution
- Centralised platform for streamlined stress testing, including suite of standardised scenarios and models, with options to incorporate additional bespoke scenarios and models
- Consultation from SMEs with domain expertise through institution's climate risk management journey
- Intelligence on industry practices and advisory/recommendations across climate risk areas
Key Benefits
Accelerated compliance
- One stop, consultancy-driven support for meeting regulatory requirements
- Readiness for the stress testing exercise
Demonstrate thought leadership
- Ability to demonstrate thought leadership to the industry and regulators
- Enhanced market reputation
Cost mutualisation
- Joint development of solution reducing cost burden
- Efficiencies by avoiding potential duplication
Tangible benchmarks
- Actionable insights into climate transition pathways vis-à-vis global peers
- Inputs on portfolio strategy and monetisation through better risk pricing
A one-stop solution for identification, measurement and stress-testing of climate risks in portfolios