Financial Sector & Capital Markets
Climate change and related climate policies are already affecting the financial sector and the value of investments across many asset classes. Meanwhile, demands for increased transparency on climate risk from investors and policymakers are growing.
South Pole offers asset managers and institutional investors a way to integrate holistic, forward-looking, and decision-friendly data and analysis on climate risks and opportunities into investment and disclosure strategies.
The investment climate is changing
Trillions of dollars need to be reallocated from high-carbon to low-carbon assets within the next decade. At the same time, failure to limit global temperature rise increases physical climate risk and creates greater investment challenges in the long term. The Paris Agreement recognises this in one of its core goals: to make all financial flows consistent with a pathway towards low-emission, climate-resilient growth. The recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) provide a clear roadmap for achieving this target.
For asset managers and institutional investors, understanding and disclosing the risks and the opportunities they are likely to face as a result of physical climate impacts, new policies, technologies and markets safeguards investment performance and prepares them for a changing world.
Our in-house experts offer asset managers and institutional investors scenario-based climate risk analysis, forward-looking datasets, and bespoke advisory services - from top-down portfolio level risk assessments to bottom-up analysis, all customisable to their needs.
We enable investors to understand, quantify and act on risks related to climate change with the following suite of services:
- Climate risk assessments at the portfolio level, including transitional & physical risk metrics, across geographies, sectors and asset classes according to our client's preferred investment horizons:
- Risk modeling based on reference climate mitigation scenarios
- Identification of most and least exposed assets within portfolios
- Deep dive of specific climate change impact assessments, including water stress and deforestation
- Determine the impact of investment products and portfolios on Sustainable Development Goals (SDGs)
- Determine forward looking indicators, e.g. potential avoided emissions and assessing green bonds' sustainability impacts
- Climate assessment for sovereign bond investments to determine future loss of invested capital
- Quantitative and qualitative reporting aligned with major regulatory guidelines, including TCFD and The French Energy Transition Law on portfolios' 2-degree alignment