Scroll

Insights and News /

18 May 2020 5 min read

Baringa wins Energy Risk’s global Climate Risk Innovation Award 2020

ERAW20-CRIOTY.jpg

 

Baringa, in partnership with XDI, is delighted to have been awarded the Energy Risk Climate Risk Innovation Award 2020

We received this global award for our unique Climate Scenario Model, which fully integrates market-leading modelling of transition and physical risk to measure climate risk and temperature impact of assets across the globe - from the largest quoted companies, through to smaller, unquoted businesses, also covering commercial and residential properties. We are grateful to Legal & General who were our reference client for this award, and who have embedded our model into their climate risk framework for managing over $1 trillion of assets globally.

“We are honoured to win this award for our unique model – recognising the role that it is playing to help the global Financial Services industry in particular to both manage climate risk and to understand temperature alignment”, says Colin Preston, Global Financial Services Sector & Climate Change Lead at Baringa. “Our aspiration is to partner with our clients to embed this model into the financial services system globally – enabling the sector to direct trillions of dollars of capital towards companies and assets that will drive decarbonisation towards net zero, reduce climate risk and at the same time support commercial returns for their investors.”

“Legal & General are excited to be working with Baringa and XDI, who we believe are a leader in climate scenario modelling”, says Martin Brookes, Director of Investment Strategy for Legal & General. “Having developed our climate risk framework using their model, we have been able to take major strides forward on how we measure and report climate risk and temperature alignment, as seen in our TCFD report. We are also able to incorporate this into our investment strategy as a group to continue our move towards Paris Agreement alignment. We are looking forward to using this tool to help our clients do the same.”

The Baringa Climate Scenario Model incorporates both transition risk (as Governments, businesses and consumers respond to climate change), built on the firm’s 20 years of advisory and modelling experience in this area, as well as physical risk (associated with the increased hazards from global warming). For physical risk we partner with XDI, whose platform has been developed over more than 10 years. It provides the most comprehensive analysis available – covering over 70 million assets across over four million companies.

Rohan Hamden, CEO of XDI, says “We are delighted to have won this award with Baringa, and to be working together with our clients globally. Our asset level physical risk analysis combined with Baringa’s company and asset level transition data provides unique insights only possible with our integrated approach.”

“The integration of our transition model with XDI’s physical risk capability creates what we believe is a unique solution. It provides global coverage of all sectors and regions, and gives our clients the ability to customise the model to develop their own scenarios, and incorporate their house views on specific sectors and assets”, says James Belmont, Baringa’s Head of Climate Risk.

Oliver Rix, Baringa’s Head of Climate Change - Energy & Environment, adds: “While the early adopters of our model are Financial Services institutions, we are now also working with clients across all sectors to help them use the model to understand their own climate risk and temperature alignment, and take steps to improve this.”

More information about the Climate Change Scenario model is available here. Contact Colin Preston to explore how the model can be applied to your organisation.