Bloomberg announced the expansion of its risk management solutions suite with the launch of MARS Climate, a new module designed to help portfolio and risk managers assess their exposure to the financial impacts of climate change. The new solution complements the company’s physical and transition risk offerings.
Regulators and central banks around the world have increasingly required financial sector companies to assess their exposure to climate risks, driven by growing evidence of the economic impacts of climate change.
A Swiss Re study estimates that economic damage caused by natural catastrophes has doubled in real terms over the past two decades, reaching USD 280 billion globally in 2023. As the regulatory landscape for climate risk evolves and the need to integrate this factor into risk management systems grows, companies need tools to manage climate-related risks and comply with regulatory requirements.
To meet this demand, the new MARS Climate module has been developed to help buy-side and sell-side firms assess, quantify and manage climate risks and opportunities in their portfolios. The solution will enable users to transparently analyze different climate scenarios based on integrated assessment models, aligned with the framework established by the Network for Greening Financial System (NGFS).
The MARS Climate transition risk model is powered by BloombergNEF’s Transition Risk Assessment Company Tool (TRACT), which projects risks and revenue opportunities for companies by combining their activities, supply chain exposure and regional footprint across different NGFS climate scenarios. Initially, users will have access to a report that assesses the financial impact of climate risk at the asset level, broken down into acute physical risk, chronic physical risk and transition risk.
According to Dharrini Bala Gadiyaram, Global Head of Risk Products at Bloomberg, portfolio and risk managers are increasingly interested in performing climate risk analysis alongside other financial assessments to comply with regulatory requirements.
“With the continued expansion of our climate risk solutions at Bloomberg, the latest release of our widely used risk management suite, MARS Climate, will enable users to assess vulnerabilities and opportunities in portfolios related to climate change,” he said.
Clients will be able to access MARS Climate through the Bloomberg Terminal via MARS CLIMATE. MARS provides risk analytics for fixed income securities and derivatives, enabling firms to manage market risk, XVA risk, counterparty risk, credit risk, hedge accounting, collateral requirements and SIMM – all using a common pricing and data library, ensuring end-to-end consistency.
Bloomberg Terminal users also have access to Bloomberg’s comprehensive sustainable finance offering, which includes corporate-reported climate and environmental indicators, such as GHG emissions forecasts, and sustainability research from Bloomberg Intelligence and BloombergNEF.
Clients can access this data directly on the Bloomberg Terminal or integrate it into their operations through the Data License at data.bloomberg.com, for use in their own or third-party applications.
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