S&P Global has collaborated with Oliver Wyman, a management consulting firm, to enhance its Climate Credit Analytics solution.
According to ESG Today, the latest addition of climate-related physical risk to the Climate Credit Analytics solution aims to empower clients with a deeper understanding of both physical and financial exposure to climate change affecting businesses and portfolios.
Established as a joint venture, S&P Global and Oliver Wyman introduced Climate Credit Analytics in June 2021. Their primary mission was to assist financial institutions and corporations in gauging the potential impacts of shifting climatic conditions and the transition to a low-carbon economy on the creditworthiness of their counterparties and investments.
The Climate Credit Analytics solution synergises S&P Global Market Intelligence’s advanced Credit Analytics risk models and sector-specific datasets with Oliver Wyman’s expertise in climate scenario and stress testing. This integration effectively translates climate scenarios into adjusted financials and scores at the individual company level.
With this new enhancement, the solution now incorporates data from S&P Global Sustainable1. This data offers insights into the physical risk exposure and its financial implications for over 20,000 companies. These insights span seven climate change-related hazards and are analysed across four CMIP6 climate change scenarios.
Since its inception, the Climate Credit Analytics solution has continually evolved, with the introduction of new climate scenarios, datasets, and disclosures. This includes company-specific transition targets which illustrate varying outcomes based on a company’s declared intentions towards energy transition, as well as features tailored to specific sectors.
S&P Global MI’s Head of Credit and Risk Solutions Whit McGraw said, “Our robust model suite and tailored approach to sectors, enhanced by the S&P Global acquisition of The Climate Service and merger with IHS Markit, provides greater granularity for regulatory climate stress testing and scenario analysis, enabling users to report to stakeholders with confidence.”
John Colas, Partner and Vice Chairman of Financial Services for the Americas at Oliver Wyman said, “This new release will serve banks, insurers, asset managers, asset owners and corporate risk managers to quantify climate risks in an even more thorough manner and thereby more readily integrate into business decisions and client engagement.”
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