Finastra and Green RWA introduce climate risk management platform


Finastra, a financial software applications provider, has partnered with Green RWA to unveil the Climate-Extended Risk Model (CERM) Sandbox. 

This immersive platform aims to simplify the process for banks to comprehend and manage climate risks, Finastra claims.

The inception of the new platform was driven by an increasing need for enhanced financial resilience against the threat of climate change. The CERM, sitting at the heart of the Sandbox, has been meticulously designed to address this urgent requirement.

Finastra’s principal operations are centred around delivering cutting-edge financial software applications and marketplaces. They are renowned for creating technology solutions that power financial institutions across the globe, enabling them to deliver innovative, customer-focused financial services.

In contrast, the CERM Sandbox is an interactive platform designed to provide a comprehensive approach to climate risk management. Its distinguishing feature is the integration of two core risk components – physical and transition risks. By incorporating this into the existing capital framework, the Sandbox augments the current credit risk model used by banks. Consequently, it provides a thorough method for detecting evolving climate risks on a global scale and allows for more precise potential loss calculations.

Additional details regarding the product indicate its openness to all interested users, from financial institutions to policymakers and even the general public. The inclusive nature of the CERM Sandbox certainly sets it apart as a key tool in the sphere of climate risk management.

In the original announcement, Olivier Vinciguerra, Chair of Green RWA, stated, “By launching the CERM Sandbox, we aim to provide the finance industry with a comprehensive approach to understanding and managing climate-related financial risks at the highest level. This is a huge achievement, in line with Green RWA’s goal to support energy transition financing, and I want to thank Finastra for its support on that journey.”

Chirine BenZaied-Bourgerie, Head of Innovation at Finastra, further elaborated, “Including environmental, social and governance (ESG) factors within risk assessments has become a board-level discussion for banks. Partnering with Green RWA is one of Finastra’s contributions towards providing the industry with tools for better climate risk management. Finastra is open by default, and we believe that open culture and technology are key for innovation and collaboration.

“By bringing the Sandbox to the community, we are helping the global banking industry effectively manage the impact of climate risks in their lending portfolios.”

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