// . // Climate And Sustainability // Managing Climate Risk

What We Do

Understanding and managing climate risk has become a critical goal for financial institutions and corporations - driven partly by regulatory mandates and market pressures as well as extreme weather events causing physical damage and supply chain disruptions.

We bring deep risk management expertise to help business leaders measure and manage their climate risks and opportunities. We have a strong history of modelling climate risk scenarios for the world’s leading financial institutions and industries. As part of Marsh & McLennan, we also draw on the risk and resilience expertise of our colleagues from Marsh and Guy Carpenter.

Collaborations

S&P Global Market Intelligence

We partnered with S&P Global Market Intelligence to launch Climate Credit Analytics, a first-of-its-kind climate credit solution to help financial institutions assess counterparty risk from a transition to a low-carbon economy.

World Economic Forum

We contribute to the World Economic Forum’s most influential risk report, The Global Risks Report, exploring some of the most severe risks we may face over the next decade.

UNEP FI

We partnered with UNEP FI to define an industry approach to transition risk quantification. Transition Check empowers institutions to evaluate risks and potential losses across numerous sectors and geographies.

What We Think

Navigating Climate Risk And Resilience In Banking

Learn how banks go beyond regulation, harnessing climate risk stress tests to gain valuable insights. Our report with AFME reveals key challenges for EU banks.

Climate Scenario Analysis Practices At US Banks in 2023

In collaboration with the Risk Management Association, we provide perspectives on US financial institutions’ climate scenario analysis capabilities.

Embarking On Climate Change Scenario Analysis

Climate risk scenario analysis is becoming mainstream as financial regulation of climate change risk intensifies. Here’s what insurers need to know.

Net-Zero Transition Plans Are Key to Progress for Regulators

Global regulators need to lead the net-zero implementation charge with transition plans.

From Climate Risk To Opportunity

New climate regulation represents a step change for insurers — but also, a commercial opportunity for the insurance industry.

Breakthroughs

Piloting The TCFD Recommendations

We helped a North American bank assess the impact of two climate transition scenarios on the creditworthiness of borrowers in the oil and gas industry. The project developed a methodology and tool that enabled the client to pilot climate scenario analysis for the oil and gas credit portfolio. The client gained significant insight into how climate transition scenarios could impact individual borrowers within the sector.

Building Capabilities In Climate Risk Assessments

We helped a leading South-East Asian bank develop and deploy climate risk stress testing models that would allow the client to undertake a long-horizon assessment of the climate risks within its portfolio that would, in turn, guide its risk management strategy. We helped the client build capabilities in climate risk assessments through extensive training and provided the client with the necessary tools and infrastructure to support strategic decisions and meet regulatory expectations.

Quantifying Physical And Transition Risk

We helped a multilateral development bank improve the integration of ESG aspects within their active risk management processes. We identified key gaps in the client’s current approach to ESG risk management against the current and forward-looking best-in-class practices and suggested improvements to enhance the robustness of the client’s counterparty risk scoring tooling.

Solutions

Climate Credit Analytics

Transition Check