Climate Risk

Climate change presents both risks and opportunities - we can help you with both

Building confidence in an uncertain world

 

Climate change is having a significant impact on communities and economies around the world, threatening the profitability and sustainability of even the most resilient businesses. The effects of climate change vary widely across different sectors, representing an existential threat to some and an opportunity for others. For the banks supporting these businesses, standard approaches and historical data are of little value, which is why we’ve developed a solution to help banks navigate the many complex scenarios of climate change.

PI_Icons_Automated Risk & Monitoring teams Run climate impact scenarios, identify impacted portfolio and climate impact metrics to track, and prepare for regulatory discussions. Decrease risk exposure and effects in sectors with inherently high climate risks.
PI_Icons_Carbon C-suite Understand how climate transition risk might impact your commercial lending portfolio, sector level risk trends, mitigants, and policy adoption. See an overview of your climate risk and distributed exposure across top sectors and borrowers.
PI_Icons_Climate_change ESG & Sustainability teams Manage GHG reporting by calculating, and tracking, financed GHG (greenhouse gas) emissions.
 
THE ULTIMATE GUIDE

Commercial Lending & Climate Impact

Discover the challenges climate risk presents commercial banks and how to address this new era of risk assessment head-on, using data-driven insight to minimize risk and maximize opportunity.
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ON Climate Consortium

Learn more about the ON Climate Consortium, our group of innovative, climate-forward institutions driving commercial lending’s approach to climate risk and opportunity.

2021 Executive Order on Climate-Related Financial Risk

"Banks with strong climate risk management systems and capabilities will not only bebetter prepared to withstand climate change events but will also have a better line of sight into the many business opportunities that will arise."
- Michael Hsu, Acting Comptroller of the Currency

Data is the driver

ON Climate is a SaaS application that was developed by our team of credit scientists and software engineers, in close collaboration with 10 US banks and 27 climate experts. ON Climate enables banks to make faster and smarter decisions on which borrowers or sub-sectors in the portfolio are most likely to suffer or benefit from climate change, and as a result, mitigate risk and identify origination opportunities to lend more. Banks can easily run robust and dynamic analysis to determine climate impact and emissions using existing borrower datasets. ON Climate overlays six climate scenarios on 14+ borrower data points, that can be readily extracted from spreading and core banking systems, to provide a forward-looking climate risk score from low priority (least vulnerable) to high (most vulnerable).

Transition risks

Transition risks can arise from the process of adjustment towards a low-carbon economy. A range of factors influence this adjustment, including climate-related developments in policy and regulation, the emergence of disruptive technology or business models, shifting sentiment and societal preferences, or evolving evidence, frameworks, and legal interpretations. The ON Climate solution identifies the borrower level impact metrics that influence the revenue and costs, along with policy driven impact for borrowers, and uses those to project the future financial health and potential risks their business may face.

Physical risks

Physical risks include extreme, localized events such as floods, fires, hurricanes, and heat waves as well as chronic changes in climatic patterns such as rising temperatures, change in precipitation, increasing sea levels and desertification. ON Climate’s physical risk assessment will evaluate how extreme weather events can lead to business disruption and damage to property. It will also address how long-term changes in climatic patterns can affect labor, capital, and agricultural productivity.

ON Climate Brochure

ON Climate provides you with insights on climate risk in your commercial portfolio that can inform your approach to every stage of the credit lifecycle.

Learn more

"Climate change risk will be a key focus area for regulators going forward, so banks need to be thinking about how they’ll address this - if they’re not already."

Bruce T. Richards
Former SVP at the Federal Reserve Bank of New York
TAKE THE NEXT STEP

Request a demo

Request a personalized demo to discover what ON Credit Intelligence can do for your bank.

What We’ll Cover:

  • What makes our technology different
  • How rapidly you’ll see results
  • Ease of installation and cost benefits
  • Current customers and outcomes