Bloomberg has expanded its risk management solutions with the launch of MARS Climate, a new module designed to help portfolio and risk managers assess the financial impact of climate change. The solution enhances Bloomberg’s existing offering on physical and transition climate risks.
As regulators and central banks worldwide tighten requirements on climate risk assessment, financial firms are under increasing pressure to evaluate their exposure. A study by Swiss Re found that economic damages from natural disasters have doubled in real terms over the past two decades, reaching $280 billion globally in 2023.
To address this challenge, MARS Climate enables financial institutions to assess, quantify, and manage climate risks and opportunities across investment portfolios. The solution allows users to analyse different climate scenarios using integrated assessment models, aligning with the Network for Greening the Financial System (NGFS) framework.
MARS Climate’s transition risk model is powered by BloombergNEF’s Transition Risk Assessment Company Tool (TRACT), which projects revenue risks and opportunities based on a company’s activities, supply chain exposure, and regional footprint under various NGFS climate scenarios. Users will receive reports detailing financial impacts at the security level, categorised into physical acute, physical chronic, and transition risks.
Dharrini Bala Gadiyaram, Global Head of Risk Product at Bloomberg, highlighted the increasing demand for integrated climate risk assessment tools.
“Portfolio and risk managers increasingly look to perform climate risk analysis alongside other financial risk assessments to manage risk and regulatory reporting. As we continue to expand our climate risk solutions across 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,” she said.
MARS Climate will be accessible via the Bloomberg Terminal at {MARS CLIMATE <GO>}. Bloomberg’s MARS platform provides risk analytics for cash and derivative securities, enabling firms to manage market risk, credit risk, counterparty risk, hedge accounting, and collateral requirements using a unified pricing and data library.
Bloomberg Terminal users will also benefit from access to Bloomberg’s broader sustainable finance offering, including company-reported climate indicators, greenhouse gas emissions forecasts, and sustainability research from Bloomberg Intelligence and BloombergNEF. Clients can integrate this data into their enterprise systems via Data License at data.Bloomberg.com.
With growing regulatory scrutiny and the financial sector’s increasing focus on climate risk, Bloomberg’s MARS Climate aims to equip firms with the tools to navigate evolving climate-related challenges and integrate sustainability into their investment strategies.
