• Enhanced Risk Management: MARS Climate equips portfolio and risk managers to analyze financial impacts of climate change within investment portfolios.
• Regulatory Compliance: Aligns with evolving global climate risk regulations and supports compliance with the Network for Greening Financial System (NGFS) frameworks.
• Data-Driven Insights: Leverages BloombergNEF’s TRACT tool to forecast revenue risks and opportunities across various climate scenarios.

Bloomberg Launches MARS Climate to Manage Portfolio Climate Risks

Bloomberg has expanded its Multi-Asset Risk Management suite (MARS) with a new module, MARS Climate, designed to help portfolio and risk managers assess the financial impacts of climate change on investment portfolios. The addition strengthens Bloomberg’s offering in both physical and transition risk management.

Why it matters:

Financial firms face increasing regulatory pressure to evaluate climate-related risks. A study by Swiss Re highlighted that economic damages from natural catastrophes doubled over the past two decades, reaching $280 billion globally in 2023.

The solution:

MARS Climate enables buy-side and sell-side firms to analyze climate scenarios using integrated assessment models aligned with NGFS standards. The tool provides detailed financial impact reports, categorizing risks into physical acute, physical chronic, and transition risks.

“Portfolio and risk managers increasingly look to perform climate risk analysis alongside other financial risk assessments to manage risk and regulatory reporting,” said Dharrini Bala Gadiyaram, Global Head of Risk Product at 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.“

How It Works:

• Scenario Analysis: Evaluates portfolios against multiple climate scenarios using BloombergNEF’s Transition Risk Assessment Company Tool (TRACT).
• Transparency: Provides granular insights into climate-related financial impacts down to the security level.
• Integration: Accessible via Bloomberg Terminal, offering seamless use alongside Bloomberg’s broader sustainable finance tools.

The big picture:

With regulators demanding greater transparency in climate risk exposure, MARS Climate positions financial firms to meet compliance requirements while identifying new opportunities amidst the transition to a greener economy.

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