Climate Risk and Sustainability Intelligence
Integrate portfolio emissions, ESG performance and forward-looking climate risk into lending, investment, underwriting, capital and disclosure decisions.
Portfolio Governance
Calculate financial, credit, sustainability, ESG and catastrophe metrics for your entire portfolio via integrations, APIs and governed workflows.
Auditable Methodologies
Leverage emission factors, climate risk data and raw ESG metrics for decisions and disclosures in a manner that is transparent and defensible.
Business Intelligence
Translate counterparty emissions, ESG and multi-hazard projections into financially relevant portfolio insights to drive real decisions.
Workflow Integration
Embed dashboards, scorecards and decision metrics into core diligence, stewardship, underwriting and reporting workflows.
Banking
Improve risk management & identify sustainable lending opportunities.
Drive sophisticated workflows for financed emissions, ESG scorecarding, physical risk, transition risk, nature risk and sustainable finance across corporate, commercial and retail portfolios.
Measure PCAF-aligned financed emissions across asset classes and data-quality levels- Translate asset-level hazards into credit, collateral, pricing and capital implications
- Run NGFS & IPCC scenario stress tests aligned with regulatory and ICAAP processes
- Embed ESG and climate risk screening into core loan origination and diligence workflows
Core Capabilities
Leverage a unified analytical system that delivers on your sustainability and climate risk needs across portfolios.
PCAF-Aligned Models and Emission Factors
Calculate and disclose lending emissions with PCAF-aligned methods, a comprehensive factor library, transparent proxies and data-quality scoring.
ESG and Carbon Scorecards
Analyze Scope 1–3 and 50+ ESG metrics across each counterparty using integrations, surveys and the data registry. Leverage custom scoring thresholds and AI reporting automations.
Climate-related Financial Risks
Assess physical and transition drivers under NGFS and IPCC stress scenarios, connecting exposure to climate-adjusted financial metrics (e.g. Value-at-Risk) and credit metrics (e.g. PD/LGD, expected loss). Similarly estimate liquidity, provisioning and capital adequacy metrics under stress scenarios.
Loan Diligence & Screening
Securely integrate climate risk and sustainability APIs with core banking and loan origination systems to inform loan diligence, risk mitigation, pricing and sustainability-linked lending. Leverage these insights to offer vulnerable counterparties new financial products (e.g. Adaptation & Resilience Loans, Sustainability-Linked Loans, Green Loans)
Key Use-Cases
Use granular, defensible analysis to improve resilience, discover opportunities and drive financial strategy.
Quantify Collateral Risk
Model property-level flood, wildfire, wind, heat, air-quality and drought exposure, including damage, downtime and devaluation.
Improve Credit Decisions
Forecast default and loss trajectories, identify mispriced assets, test sensitivity and adjust underwriting, loan pricing and portfolio risk limits.
Manage Concentration Risk
Identify geographic, sector and counterparty risk accumulations and evaluate combined portfolio tail risk under acute events and long-term change.
Build Resilience Roadmaps
Prioritize adaptation and engagement using sector, region and counterparty specific risk-reduction potential, weighed against estimated A&R costs.
Grow Sustainable Finance
Identify emerging opportunities, structure sustainability-linked products and connect borrower performance to credible targets and evidence.
Improve Disclosures
Automate regulatory and voluntary reporting with AI-assisted disclosure tools, audit trails, stakeholder surveys and standardized configurations.
Increasing Regulatory Emphasis on Sustainability and Climate Risk
Central banks globally are moving climate risk from a voluntary ESG concern to a core prudential expectation: the European Central Bank has set out binding supervisory expectations on climate risk management and disclosure — backed since 2022 by capital add-ons for banks that fall short — while the Central Bank of the UAE has issued a Climate-related Financial Risk Management Regulation requiring institutions to identify, measure, and report material climate risks. In India, the RBI has published a draft disclosure framework requiring banks and large NBFCs to report climate-related governance, strategy, risk management, and financed-emissions metrics on a phased timeline, signaling that granular, portfolio-level climate risk assessment is becoming a regulatory baseline rather than a differentiator.
Asset Management
Price risk, strengthen stewardship and protect long-term value.
Standardize and leverage emissions metrics, ESG scores and forward-looking physical and transition risk analytics across multiple asset classes (debt, equity and blended portfolios) for investment screening and reporting.
- Estimate financed emissions across funds, strategies, issuers and underlying assets
- Develop physical risk screening thresholds across companies, sectors, geographies and investment themes
- Connect climate-adjusted financial effects to diligence, allocation and value-creation plans
- Drive evidence-based climate-related portfolio engagement and investor disclosures
Core Capabilities
Move from fragmented investee data to standardized fund-level analytics for all major asset classes.
PCAF-Aligned Emissions Data
Measure and attribute emissions using PCAF-aligned methods, audit trails and data-quality scoring across all major asset classes.
ESG and Carbon Scorecards
Analyze Scope 1–3 and 50+ ESG metrics across each counterparty using integrations, surveys and the data registry. Leverage custom scoring thresholds and AI reporting automations.
Climate-related Financial Risks
Assess physical and transition drivers under NGFS and IPCC stress scenarios, connecting exposure to climate-adjusted financial metrics (e.g. Value-at-Risk) driving operational and market risks for each investment.
Investment Diligence & Screening
Securely integrate climate risk and sustainability APIs with investment information systems to inform diligence, risk mitigation and deal terms.
Key Use Cases
Leverage entity and asset metrics to drive allocation, diligence, stewardship and value-creation decisions.
Optimize Portfolios
Rebalance exposure across geographies and sectors using scenario-based loss, risk concentration, insurance availability and cost-of-capital signals.
Strengthen Diligence
Screen acquisitions for high-resolution asset, operational and supply-chain risk; identify stranded-asset potential and enforce risk-tolerance gates.
Quantify Financial Risks
Build differentiated financial projections that model climate-related revenue interruption, EBITDA, operating expenses, asset impairment and balance-sheet performance.
Drive Value Creation
Guide portfolio companies toward proactive A&R investments with the strongest risk reduction and expected return.
Scale Stewardship
Prioritize issuer engagement using emissions, ESG and climate evidence to track targets, actions and progress consistently.
Differentiate Strategies
Create credible resilience-focused funds and communicate transparent transition plans to LPs, rating agencies and other stakeholders.
Increasing Emphasis on Sustainability and Climate Risk
Securities regulators and asset allocators are subjecting asset managers to increasing climate scrutiny: in the EU, the Sustainable Finance Disclosure Regulation (SFDR) requires fund-level sustainability disclosures and is being reshaped into a formal product categorisation regime, while the UK FCA now mandates TCFD-aligned climate reports from asset managers and is phasing in its Sustainability Disclosure Requirements and fund-labelling rules — backed by an anti-greenwashing rule. In India, SEBI requires ESG funds to invest predominantly in companies with assured BRSR Core disclosures and to report scheme-level ESG scores, meaning managers everywhere increasing need portfolio-level climate risk metrics not just for investor reporting, but for regulatory compliance and greenwashing liability.
Insurance
Translate forward-looking climate risk into innovative products and strategy.
Harmonize climate-related assessments across insured assets, investment books and partner data to quantify physical losses, insurance-associated emissions and transition risk exposure.
- Model projected changes in asset-level hazard damage and downtime to inform internal catastrophe model development
- Measure PCAF-aligned insurance-associated and investment-portfolio emissions for reporting and disclosures
- Design parametric and resilience-linked products using forward-looking strategic climate risk intelligence
Core Capabilities
Bring forward-looking exposure, emissions and scenario data together across underwriting, investment, risk and regulatory teams.
Damage and Downtime Projections
Assess multi-hazard exposure projections at asset and location level. Translate projected severity metrics to drive decisions around catastrophe model procurement and product development.
Insurance-associated Impacts
Measure PCAF-aligned insurance-associated and invested-asset emissions, set targets and monitor performance against decarbonization plans.
Scenario-informed Investment Strategy
Model policy, market and technology shifts on invested assets using NGFS scenarios to inform long-term allocation and risk management strategies.
Parametric & Climate-Aligned Insurance
Integrate climate risk and sustainability tools to drive innovative insurance product development and distribution.
Key Use Cases
Use climate risk and sustainability intelligence to drive innovation and strategy.
Assimilate Disperse Data
Ingest and standardize data across investment books and insured assets for ESG, emissions and climate analysis.
Manage Portfolio Emissions
Benchmark insurance-associated emissions and invested asset emissions, identify hotspots, set targets and track performance.
Assess Systemic Exposure
Analyze projected changes in physical risks across different product classes and evaluate strategic options under future conditions.
Harmonize Climate Metrics
Calibrate forward-looking climate projections with portfolio-specific loss data to develop bespoke projections that are anchored in empirical estimates.
Innovate on Products
Define transparent triggers and coverage structures for parametric, resilience-linked and other novel products informed by forward-looking hazard and loss analytics.
Stress-test Pricing Strategy
Evaluate how changing hazard, repair cost, insurance availability and adaptation measures might affect technical price and market positioning.
Increasing Emphasis on Sustainability and Climate Risk
Insurance supervisors globally are converging on the expectation that climate risk must be measured, managed, and disclosed as a core prudential matter: the IAIS has embedded climate risk into its Insurance Core Principles and published detailed supervisory guidance covering climate disclosure, scenario analysis, and macroprudential oversight, while in the EU, EIOPA requires insurers to run climate change scenario analysis within their Own Risk and Solvency Assessments and is recalibrating natural catastrophe capital parameters for a warming climate. In India, IRDAI's Corporate Governance Regulations 2024 make a Board-approved ESG framework and a dedicated climate risk management framework mandatory for every insurer — so insurers worldwide increasing need granular, portfolio-level climate metrics not just for underwriting, but for regulatory compliance.
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Case Studies
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ESG, Financed Emissions and Climate Risk at a Japanese Financial Institution
A leading Japanese financial institution was interested in baselining their ESG, climate risk and Scope 3 emissions (including portfolio emissions) despite having limited data available.
<6 months to complete ESG baselining, portfolio emissions assessment and climate risk assessment
Operations and portfolio target-setting initiated using baselining results with the leadership and board to achieve climate objectives.
Scope 3 computation leveraged existing data to ensure actionable output, with accompanying data gap analysis.
Client started to incorporated risk insights into lending strategy as part of a multi-year risk management and decarbonization journey.
ESG and Portfolio Emissions Management at a Private Indian Bank
A leading private sector bank in India sought to enhance its ESG data management capabilities to meet evolving regulatory demands and align with global sustainability frameworks. The objective was to streamline the ESG and carbon data collection and reporting processes in order to enable data-driven sustainability decision-making across its operations and portfolio.
<4 months to complete ESG baselining, portfolio emissions assessment with platform go-live
Automated disclosure tools enabled a significant reduction in the time, effort and errors in data collection and computation
Over 70+ ESG and carbon metrics were aggregated across 3000+ entities
The platform unlocked internal capacity at the bank to conduct on-demand ESG and carbon assessments with targeted insights.
ESG Data Management for a Top 5 Indian Bank
A top bank in India sought to streamline ESG data integration, enhance automation in reporting, and achieve compliance with evolving regulations. The organization wanted to migrate their existing workflows to the ESG platform, ensuring a highly secure and automated platform for their sustainability and operations teams to use.
Up to an 80% reduction in manual effort as a result of improved ESG data ingestion and automated processing.
Specialized user access protocols and RBAC mechanisms ensured that access was controlled in accordance with the clients rigorous IT requirements.
Rich analytics spanning ESG trends and emissions hotspots from business operations, paired with industry benchmark of key metrics
Assurance-readiness across 9000+ ingestion entities as a result of automated mapping of proofs (e.g. receipts) and the flagging of anomalies
Product Sustainability for a Top 5 Bank in India
A top bank in India was looking to quantify the comparative emissions impact between a card transactions and cheque book transactions to analyze emission hotspots in the product lifecycle sand explore opportunities to make systemic emissions reductions.
<3 months to complete the simplified life-cycle assessment for both products
Research-backed models were deployed to close data gaps where there was limited primary data (while propagating uncertainty)
A comprehensive library of country-specific life-cycle impact assessment factors were leveraged to provide an accurate and precise assessment.
The engagement kick-started their journey towards product sustainability and outlined clear interventions associated with both products.
Portfolio Emissions & Net Zero Targets for an Indian Bank
A leading private bank in India requested support to compute their financed emissions at loan level and set targets for their portfolio in line with their SBTi commitment.
<6 months to complete Financed Emissions and Target Setting across their entire portfolio
The assessment covered 100% of their corporate portfolio for FE computations, including sectors not covered by PCAF such as agriculture
A decarbonisation strategy was developed by working with a a variety of internal stakeholders to kick-start their journey to NetZero
One of the first banks in India to set a Net-Zero target for their entire lending and investment portfolio
Decarbonization Roadmap for Top 5 Indian Bank
One of the top banks in India requested support to project their carbon emission footprint, set operational sustainability targets and develop a decarbonization roadmap.
< 4 months to complete the entire project, in time for the bank to publish their targets as part of their annual report.
Based on the analysis, the bank’s board and management approved the required budget to begin the decarbonization journey in less than 2 months
Multi-million dollar cost savings were identified via the analysis as a co-benefit to the emissions reduction strategy
An ongoing data-driven decision-making framework that enables the bank to alter strategy based on market conditions.
Carbon, ESG and Climate Risk Assessment for an Indian NBFC
A leading Indian NBFC wanted to baseline their carbon and ESG metrics, across their operations. They also wanted to conduct a portfolio-level climate risk assessment.
<6 months to complete ESG baselining, portfolio emissions assessment and climate risk assessment
Targets were structured with board and leadership using the baselining results with the goal of achieving their climate objectives.
Given the limited availability of data, the scope 3 analysis was conducted using limited portfolio financial data, leveraging proxies and propagating uncertainty when appropriate.
The resulting risk insights were incorporated into the multi-year portfolio lending strategy planning process.
Financed Emissions for a Top 5 Indian Bank
One of the top banks in India wanted to measure their financed emissions to meet upcoming regulatory requirements and set a baseline for a Net-Zero action plan.
<3 months to complete Financed Emissions across entire portfolio.
Given the limited data available, calculations were conducted at the appropriate data quality (Score 4/5) by only using financial data from the LMS.
100% sectoral portfolio coverage for FE computations including sectors not covered by PCAF such as agriculture.
Kick-started a multi-year journey to adapt lending processes to collect better sustainability data and drive decarbonization via their lending.
Climate Risk and Financed Emissions for a Top 5 UAE Bank
A top bank in the UAE partnered with StepChange to measure its financed emissions for key lending portfolios and conduct a climate risk stress test in accordance with the CBUAE’s 2025 regulatory requirements.
<6 months to establish a emissions baseline by standardizing data protocols, rationalizing sector classifications, and aligning computation methodology with PCAF guidelines.
Delivered a CBUAE-compliant data template and methodology report, enabling alignment with regulatory expectations and internal validation.
Emissions assessed for AED 250 billion+ portfolio, covering home, vehicle, and corporate loans across multiple sectors.
Reduced reliance on Score 5 data, with significant movement to Score 4 and Score 2, reflecting stronger data quality and granularity.
See what StepChange can unlock for your financial institution.
