An article published in Les Echos explores how Scientific Climate Ratings, an EDHEC Business School venture, is helping bridge one of the biggest gaps in financial markets: translating climate science into quantified financial risk.

The article features insights from Rémy Estran-Fraioli, CEO of Scientific Climate Ratings, who explains why investors need more than ESG scores to understand climate risk. Rather than assessing policies or commitments, Scientific Climate Ratings quantifies the expected financial impact of climate change on economic activity and asset values across regions, countries and scenarios.

Drawing on research developed by the EDHEC Climate Institute, the article highlights several key innovations behind the methodology:

• High-resolution macroeconomic modelling combining 50 years of regional GDP data with NASA climate observations across more than 3,600 subnational regions.
• Regional climate intelligence, recognising that climate impacts vary significantly within countries, making local analysis essential for investment decisions.
• Probability-weighted climate scenarios, moving beyond traditional “what if” stress testing by attaching likelihoods to nine different climate pathways.
• Decision-grade financial outputs that translate climate science into expected economic and financial impacts that investors, lenders and policymakers can incorporate into their decision-making.

The article also discusses the launch of Scientific Climate Ratings’ Sovereign Climate Risk Ratings, designed to provide forward-looking, financially material assessments of climate risk at the sovereign level.

Read the full article here.