Climate change poses a major risk to the stability of the global financial system. ICE Climate Data integrates climate data and analytics for corporates, municipals and mortgage-back securities, which can help investors and companies to identify, measure and understand physical climate and transition risks.
Geospatial climate, economic and demographic data to help investors quantify climate risk exposure across municipal bond and MBS portfolios.
Climate scenario analysis, emissions and targets data to help financial institutions develop decarbonization strategies.
With extreme weather events on the rise there is increasing concern over how the U.S. municipal bond and mortgage-backed security MBS, which may be particularly vulnerable to physical events, will manage these challenges. Climate and ESG data may be able to provide an added layer of transparency into the risks and opportunities in these markets.
Flexible delivery options include a file-based solution at the security level, allowing for integration into risk systems and other analytical tools, as well as a web user-interface:
ICE ESG Geo-Analyzer is a visualization and analytics solution that enables data-driven actionable insights for location-linked assets. Users can analyze climate and social features surrounding any specific location within the continental United States, regardless of the presence of any linked security.
The Geo-Analyzer provides climate risk and demographic metrics at property-level. It can be used to analyze client provided locations, such as pre-securitized commercial properties, whole loan portfolios, and real estate holdings, and their respective associated location-backed securities.
The global transition to a low carbon environment creates risks and opportunities for financial market participants. Adoption of net zero strategies and other responses to climate change, will see a huge reallocation of capital, reshaping businesses and policy.
Emissions and Targets Data can help companies and financial institutions understand the climate risk landscape, meet regulatory requirements and capitalize on climate-related opportunities.
The Climate Transition Analytics Tool, which is part of the ICE Sustainable Finance Platform, integrates climate data and science-aligned analytics at a company, sector and portfolio level. Designed by climate risk specialists, the tool helps asset owners, asset managers, investors and companies identify, measure and understand the potential climate risks and opportunities within portfolios and loan books.
The mention of ‘Climate Risk’ inevitably turns our thoughts to dramatic weather events such as floods, storms, hurricanes as well as drought and forest fires (“Physical Climate Risk”). These often-devastating Physical Climate Risk events grab the media’s attention and are widely reported. However, there is another kind of Climate Risk which is much less discussed and not as widely covered in the mainstream media, despite the potential for it to impact every part of daily life: Climate Transition Risk.
As concern about climate risk disclosure grows, an analysis of ~800,000 U.S. municipal bonds representing over $2.5T in outstanding debt shows no evidence it is being systematically priced in. Yet event-based climate risk is correlated with discounts in both property value appreciation and population growth over the past decade -- the pillars of municipal market tax revenue and stability.
As part of Climate Week, we held the inaugural Climate and Capital Conference at the New York Stock Exchange, an ICE exchange. The event - hosted by ICE, Gitterman Asset Management and FINTECH.TV - brought together industry leaders to talk climate risks and opportunities. They discussed topics like aligning capital with climate commitments, ways to engage with corporate issuers on decarbonization strategies and solutions to measure and manage climate risk. Sessions and additional resources are now available on-demand.