Evaluating Climate Risk in Liquid Investment Strategies

The current climate emergency has led companies and governments to take action to mitigate this crisis and transition toward a low-carbon economy. Financial institutions are not exempt from taking part in such a transition, as they are increasingly pushed to assess their exposure to climate risk and to consider sustainability objectives in their investment strategies.

Maria Palazzi-Nieves, a research data analyst, introduces MJ Hudson Quantitative Solutions’ carbon screening and temperature scoring tool, developed to evaluate internal security for liquid investment portfolios. Built on SBTi methodology and employing a varied set of MATLAB^® toolboxes, the tool enables institutions to evaluate their alignment with current GHG emissions reduction and temperature goals, which can potentially influence their investment decisions.