In this article, Rémy Estran-Fraioli, CEO of Scientific Climate Ratings, an EDHEC venture anchored to the EDHEC Climate Institute, reflects on the creation and early development of what he describes as “the first rating agency dedicated to the financial materiality of climate risk”. The initiative was established to address the growing need for scientifically grounded and financially relevant climate risk assessments capable of supporting investment and strategic decision making.

Scientific Climate Ratings has developed two complementary methodologies: Climate Exposure Ratings (CER), which assess asset exposure to future physical and transition climate risks, and Climate Risk Ratings (CRR), which integrate climate risk directly into financial valuation models. By combining climate science, geospatial analysis, emissions data, and scenario based financial modelling, the agency seeks to create a more standardised and decision useful framework for evaluating climate related financial risk across infrastructure assets and, increasingly, listed companies.

The article also highlights Scientific Climate Ratings’ differentiation from traditional ESG scoring approaches by focusing specifically on the financial materiality of climate risk rather than broader sustainability aggregation. Supported by scientific data sources including NASA, ESA, IPCC, and Copernicus, the methodology aims to provide investors, infrastructure operators, and financial institutions with more transparent and quantifiable climate risk insights. Early collaborations, including work with the World Bank on infrastructure resilience in Brazil, further demonstrate how climate adaptation and resilience investments can contribute not only to risk mitigation but also to long term value creation and asset protection.

Read the full article here.