Bloomberg Launches New Solution to Help Investors Assess Portfolio Climate Risks and Opportunities

Business and financial markets information service provider Bloomberg announced the launch of MARS Climate, a new solution aimed at enabling buy-side and sell-side financial firms to quantify and manage climate risks and opportunities across portfolios. The new solution forms part of Bloomberg’s Multi-Asset Risk Management (MARS) suite.

According to Bloomberg, the launch of the new solution comes to help investors address increasing demands by regulators and central banks to assess their exposure to climate risks, driven by growing evidence of the economic impacts of climate change. A study by Swiss Re cited by Bloomberg estimates that economic damages caused by natural catastrophes have doubled in real terms over the past two decades, reaching $280 billion globally in 2023.

Bloomberg said that its MARS Climate module will help users analyze various climate scenarios based on different integrated assessment models, consistent with the framework set forth by the Network for Greening Financial System (NGFS), with the solution 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. Users of the new solution will initially 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.”