Clarity AI has launched a new physical risk solution designed to help asset managers, asset owners, and banks evaluate climate-related financial risks across their investment portfolios.
The launch comes as institutional investors increasingly prioritise physical climate risk, with market research indicating that a significant majority expect extreme weather events to affect asset prices within the next five years. Despite this growing concern, many institutions have highlighted a lack of specific asset-level data required to measure exposure accurately.
The newly introduced platform covers more than 3 million assets across 17,000 companies, tracking 2 million assets identified as essential to core corporate operations. The system evaluates risk exposure across 16 climate and nature hazards, nine climate scenarios, and five distinct time horizons extending through to 2050. To accommodate specific investment strategies, institutions are also able to upload proprietary asset data to calculate exposure beyond the standard universe.
Built using a methodology from RiskThinking.AI—which has been validated by Canada’s Office of the Superintendent of Financial Institutions—the tool features fund look-through capabilities. This structure is designed to assist banking institutions in meeting climate-related regulatory disclosure requirements, including Pillar III frameworks.
Alice Borgonovo, Climate Solutions Lead at Clarity AI, stated that the conversation around climate has evolved past simply knowing a risk exists. Borgonovo noted that investors now need to understand the precise financial implications of these changes with the same rigour applied to traditional financial risks, requiring data transparent enough to inform lending and strategic decisions.
