Climate Credit Analytics

Do you need to assess impact of climate change on your portfolios?

Translate complex climate scenarios into drivers of financial performance and carry out counterparty and portfolio-level analysis for thousands of companies across multiple sectors.

Assess the impact of climate change scenarios on credit risk

Climate Credit Analytics, developed by S&P Global Market Intelligence and Oliver Wyman, combines S&P Global Market Intelligence’s data resources and credit analytics capabilities with Oliver Wyman’s climate scenario and stress-testing expertise. Through a highly dynamic, sector-specific approach, Climate Credit Analytics enables counterparty- and portfolio-level analysis of climate-related financial and credit risks for thousands of companies across multiple sectors. This service facilitates an in-depth assessment of the impact posed by climate-induced transition and physical risks on portfolios.

Who We Serve

Credit Risk Management Teams
Consider the transition and physical climate risks in your credit risk analysis, and evaluate alternative scenarios along with their potential impacts on your business.
Investment Teams and Portfolio Managers
Gain insight into potential changes in the value of portfolio companies during the investment horizon due to possible impacts of physical and transition climate risks.
Sustainability Teams
Support your firm’s net-zero goals and sustainability reporting with important climate scenarios that help you anticipate the future.
Corporate Counterparty Risk Teams
Assess the impact of climate change and related transition and physical risks on the creditworthiness of suppliers, customers, and business partners.

Comprehensive Coverage — Data You Can Trust

Climate Credit Analytics translates climate scenarios into financial performance drivers, tailored to each industry. These drivers, which include production volumes, fuel costs, and capex spending, are utilized to project comprehensive financial statements for companies under various climate scenarios. These scenarios encompass those published by the Network for Greening the Financial System (NGFS), key regulatory scenarios, and short-term carbon-tax adjusted scenarios.

This enables users to have comprehensive and consistent modeling covering more than 140 industries under the Global Industry Classification Standard (GICS) code. The modeling uses a product-specific approach for high-carbon emitting sectors, such as oil and gas, power generation, metals and mining, and airlines. It also includes an emissions-based approach for construction, steel, agriculture, and other remaining non-financial sectors. Additionally, a top-down approach is available for name-based extrapolation for full portfolio coverage, when necessary.

The robust suite of tools leverages S&P Global Market Intelligence’s proprietary datasets and capabilities. This includes financial and industry-specific data from across divisions of S&P Global, sophisticated quantitative credit scoring methodologies, and emissions and physical asset risk data from S&P Global Sustainable1. All of these elements enrich the analysis and provide granularity to the approach. The offering enables automated bottom-up analysis for 2.2 million companies. For users who have the requisite information on their portfolio companies, a capability for proprietary analysis is also available.

Exhibit: Market-leading approach— Climate Credit Analytics

Source: S&P Global Market Intelligence. For illustrative purposes only.

Linking Climate Risk and Credit Risk

Climate Credit Analytics is designed to:

  • Enable users to perform climate stress testing and scenario analysis, as well as comply with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
  • Meet growing requirements from regulators, investors, and other stakeholders to assess, disclose, and manage climate risks.
  • Provide information and analysis to decision-makers as the conversation around climate risk continues to grow.

It also enables users to access a wide range of scenarios, with options for:

  • Time horizons out to 2050.
  • Multiple temperature targets and transition pathways.
  • A variety of carbon pricing levels.
  • Transition opportunities.

How We Can Help

Commercial Banks
Many companies today face transition and physical risks due to climate change. This situation is putting pressure on banks to better understand risks in their loan and investment portfolios. The Climate Credit Analytics solution, with its climate scenarios, can help you evaluate exposures in your existing portfolios, thereby enabling you to make more informed decisions in the future.
Success in the insurance industry relies on accurate risk prediction. However, climate change, along with associated transition and physical risks, are reshaping the landscape. The Climate Credit Analytics solution offers climate scenarios that enable you to assess various climate pathways and their impacts on both the asset and liability aspects of your business, preparing you for the unknown.
Asset Managers
As climate change effects escalate, understanding climate-related risks and developing strategies to alleviate these risks have become a top priority for asset managers across the globe. The Climate Credit Analytics solution can help you evaluate different climate-related scenarios, gauge their potential impact on your portfolios, and refine investment selections.