Moody’s Analytics and McKinsey Sustainability have joined forces, bringing together leading data, analytics, software, and consulting services to help banks identify, measure, and act on risks and opportunities related to climate change.
“Banks are seeking better tools to integrate climate risk into their decision-making, whether they are looking at credit assessment, stress testing and scenario analysis, or regulatory needs,” said Jacob Grotta, General Manager, Banking Solutions at Moody’s Analytics. “By working with McKinsey, we are able to provide broader, comprehensive solutions to clients – helping them understand what needs to be done and how to do it with the tools, data, and analytics Moody’s is known for.”
The collaboration combines the leading climate risk and analytics capabilities of Moody’s Analytics, RMS, a global leader in climate and catastrophe risk modeling, and McKinsey Sustainability’s Planetrics solution, which supports financial institutions in assessing climate-related risks and reducing their financed emissions towards net zero. The suite of solutions augments existing processes with climate information and projections, and begins with:
- Climate-risk-aware credit assessment
- Climate stress testing and scenario analysis
- Climate disclosures
McKinsey Sustainability and Moody’s have helped one U.S. bank measure the credit impact of physical and transition risks on their Commercial and Residential Real Estate portfolios under different climate scenarios. This has enabled it to make more informed decisions in credit portfolio management. The bank is now re-examining its approach to borrower and transaction-level risk assessments so that it can more easily factor in the impact of climate risk on its credit profile.
“We are thrilled to collaborate with Moody’s Analytics to strengthen banks’ resiliency to the present and future risks from climate change, and to align their portfolios to net-zero pathways,” said Cindy Levy, senior partner, McKinsey Sustainability.
To learn more about the new offering, please contact [email protected].
To learn more about Moody’s offerings to address the needs of our customers navigating challenges of climate change through our insights, solutions, and corporate commitments, visit www.moodys.com/climate.