Climate scenario models often extend far into the future, typically to 2050 or even 2100, well beyond traditional financial planning horizons. As Mark Carney described in his now well-known speech, climate change presents a “tragedy of the horizon,” where short-term financial decision-making fails to account for long-term consequences. Climate risk is, therefore, highly uncertain, with widely varying outcomes. Most models…
From extreme weather to policy disruption, climate risks manifest in two distinct yet financially relevant forms: Physical and Transition. These risks are urgent and material, with significant financial impacts, especially for infrastructure projects with long investment horizons. Exposure to physical risks such as floods and heat stress can result in a significant loss in value for infrastructure assets. According to a…
Climate risks are material financial risks. Yet, for a long time, the financial world has mostly reacted to climate threats as they happened. They also relied heavily on Environmental, Social, and Governance (ESG) reporting to demonstrate compliance and show that they are “following the rules”. However, this checklist approach is increasingly losing both relevance and credibility among investors and issuers,…
Reuters news agency has published an exclusive article introducing Scientific Climate Ratings (SCR), an EDHEC venture, highlighting its distinctive position as the first agency to estimate projected financial losses for thousands of infrastructure assets across multiple climate change scenarios. The article authored by Simon Jessop, Editor of Sustainable Finance at Reuters, addressed the growing need to understand the potential costs…
Scientific Climate Ratings (SCR), an EDHEC venture, featured in an article by International Financial Review (IFR) magazine, promoting the agency’s powerful feature assigning a precise dollar value to the impact of climate risk on infrastructure. SCR offers forward-looking ratings that quantify how transition risks (linked to the shift to a low carbon economy) and physical risks (floods, storms, heatwaves…