Ortec Finance has integrated quantified systemic climate risks and opportunities associated with different global warming pathways into traditional multi-horizon, real-world scenarios sets that drive strategic investment decision-making. This forward-looking scenario analysis can be used to assess climate risks for all asset classes within your portfolio, optimizing asset allocation and fulfilling regulatory requirements, such as pillar 2 'Strategy' of the TCFD disclosure recommendations.

Enhance your investment strategy with this systemic climate risk scenario solution, embedded in traditional quantitative modelling software for risk and return management.

 

Our climate risk scenario solution can be built up from a combination of different ‘building blocks’:  
  • Climate risk-aware economic & financial scenarios dataset
  • Climate risk portfolio analysis
  • Climate risk drivers write-up
  • Interpretation & reporting on portfolio results (in line with disclosure requirements of i.a. TCFD, UN PRI)
  • Workshop: Understanding climate risk scenario analysis & exploring impacts on strategic asset allocation

Ortec Finance’s research shows that it is key for investors to take the systemic nature of climate change-related risks and opportunities into account. Climate change will not only affect companies on the individual level but will also fundamentally impact how the economy performs as a whole. Currently, most investors seem to focus on managing climate risks by engaging with, and potentially divesting from, individual companies and other holdings. ‘Stock-picking’ is likely to be insufficient to manage the broader, knock-on effects on the economy as GDP, interest rate and inflation are impacted by climate change.

If we picture investors as mountain climbers then they are currently focusing on choosing the right handholds (companies) to climb up the mountain face, but they are forgetting to check if the actual route (the assumptions around macro-economic development) they have planned out is the correct one. No climber, no matter how strong the individual handholds, is going to reach the top if they are climbing on the wrong route all together!

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