Bloomberg last week announced its risk management solutions suite has been expanded with the launch of a new module, MARS Climate, to help portfolio and risk managers assess their exposure to the financial impacts of climate change. The new solution adds to Bloomberg’s physical and transition risk offering.
Regulators and central banks across the world increasingly demand that financial firms assess their exposure to climate risks, driven by growing evidence of the economic impacts of climate change, added Bloomberg. A study by Swiss Re estimates that economic damages caused by natural catastrophes have doubled in real terms over the past two decades, reaching $280bn globally in 2023. As the climate risk regulatory landscape evolves, coupled with the need to integrate climate into risk management systems, firms need tools to manage climate-related risk and comply with regulatory reporting requirements, Bloomberg continued.
To address this need, Bloomberg says the new MARS Climate module aims to help buy-side and sell-side firms assess, quantify and manage climate risk and opportunities across portfolios. According to the company, the solution aims to enable users to transparently analyze various climate scenarios based on different integrated assessment models, consistent with the framework set forth by the Network for Greening Financial System (NGFS). MARS Climate’s transition risk model is powered by BloombergNEF’s Transition Risk Assessment Company Tool (TRACT), which projects company revenue risk and opportunities, combining companies’ activities, supply chain exposure and regional footprint under different NGFS climate scenarios. Initially users will be provided with a report assessing the financial impact of climate-related risk down to security level, split out by physical acute, physical chronic and transition risk.
Dharrini Bala Gadiyaram, global head of risk product at Bloomberg said: “Portfolio and risk managers increasingly look to perform climate risk analysis alongside other financial risk assessments to manage risk and regulatory reporting. As we continue to expand our climate risk solutions across Bloomberg, the latest addition to our widely used risk management offering, MARS Climate, will enable users to assess portfolio vulnerabilities and opportunities related to climate change.”
The company says customers will be able to access MARS Climate through the Bloomberg Terminal via {MARS CLIMATE <GO>}. MARS provides risk analytics for cash and derivatives securities and enables firms to manage front office risk, market risk, XVA counterparty risk, credit risk, hedge accounting, as well as collateral and SIMM requirements – all by using a common pricing and data library, providing consistency from front to back. For more information, visit our website here.
Bloomberg Terminal users also benefit from access to Bloomberg’s broader sustainable finance offering which spans company-reported climate and other environment-related indicators such as GHG emissions forecasts. In addition, users have access to sustainability research from Bloomberg Intelligence and BloombergNEF. Bloomberg says clients can readily access this data on the Bloomberg Terminal or across their enterprise via Data License at data.Bloomberg.com for use in proprietary or third-party applications.
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