Climate Change Solutions

Understanding the climate risks and opportunities – and the resulting winners and losers of the transition to net zero – is crucial for informed decision-making and effective policy formulation. Our climate solutions go beyond mere identification; we provide organisations with the tools to understand how different economies, sectors and subnational areas are impacted by changes in:

• The regulatory environment, including the implementation of carbon taxes and programmes such as the Carbon Border Adjustment Mechanism (CBAM)

• Levels of investment, energy efficiency and innovation

• Energy demand, supply and prices

• Carbon emissions, global temperature and the associated impacts of physical risks of climate change

We can do this through many different lenses, from hyper-local to global and for the now and into the future. As well as informing strategic planning, investment decisions and risk management strategies, our climate change scenarios enable organisations to test their assumptions and plans, fostering agility and competitiveness while mitigating climate risk in the pursuit of a net-zero future.

Our climate solutions help organisations navigate complex climate-related regulatory requirements, going beyond simply interpreting regulations to providing actionable, bespoke outputs. We help mitigate climate-related risk with a full solution that includes both long- and short-term climate change scenarios, as well as physical and transition risk climate scenarios at the national, sectoral and sub-national levels.

• We cut through the noise and complexity of NGFS scenarios with a solution that includes the latest data and the most comprehensive variable and country coverage

• Our data and insights support your climate and sustainability-related risk management reporting and financial disclosure requirements (TCFD, CSRD and others)

• Our Global Economic Model’s fully integrated climate change channels provide a unique and comprehensive view of the interaction of the real economy and financial markets with the energy system and climate, whether for short-term or long-term shocks

• We decompose the impact of climate risks across various scenarios and provide full transparency to the scenario assumptions

Our extensive regulatory climate stress testing experience includes running climate ICAAP scenarios and central bank stress tests for the European Central Bank, Bank of England, Federal Reserve and the Hong Kong Monetary Authority, among others.

The economic impacts of climate change and subsequent climate mitigation policies cannot be discussed only in national or sectoral terms. Cities and regions will face different growth trajectories under alternative climate change scenarios, reflecting their unique sectoral composition, inter-regional dependencies and vulnerability to the physical risks of climate change. Our unique suite of climate change solutions can address this.

• Complete national, sectoral and sub-national coverage of the economic impacts of climate change for your strategic planning

• Support the risk management of key assets by interpreting the economic impact of the transition to net zero

• Geospatial modelling assesses potential economic disruptions from physical risks, combining natural vulnerability with hyperlocal economic activity estimates

• Extensive coverage of all key economic indicators enables the formulation of crucial insights into the impact of climate mitigation policies at national and sub-national levels

With consistent data and forecasts across countries, sectors and cities, our climate change solutions empower confident decision-making to optimise future demand-building efforts, asset management and supply chain resilience.

Climate risks and opportunities are increasingly affecting long-term investment strategies and returns. As a result, not only have asset managers recognised the need to incorporate climate-related risks and considerations into their investment risk management processes, but they must also demonstrate how they’ve done so to meet the various regulatory requirements (eg TCFD, IFD/IFR and SFDR). Our climate solutions provide the economic foundation to embed climate risk into their overall framework.

• Evaluate investment implications for strategic asset allocation across different transition pathways and physical risk scenarios in the short, medium, and long-term

• Perform due diligence and manage climate risks across different asset classes, sectors, and geographies

• Leverage national, sectoral and sub-national outputs to evaluate, assess, and demonstrate an understanding of the relevant physical and transition risks that climate change may pose to investments

• Decompose the impact of climate risks across over 100 sectors, government bond yields, equity prices, exchange rates, corporate credit spreads and house price index, among others, to inform investment strategies

Our climate change scenario services provide clients with the vital tools to shape their climate and sustainability strategy.  Incorporating quarterly updates and monthly published research, our services provide clients with

• A continuous and accurate understanding of the evolving climate situation and policies

• Ability to model their own transition risks, climate risks and opportunities and test their decisions over various time horizons and across geographies with bespoke scenarios

We enable clients to make informed decisions on where to invest and what markets and products to focus on for future growth, as well as helping them to create a long-term sustainability strategy.