Bloomberg has expanded its risk management solutions with the launch of Mars Climate, a tool designed to help investors assess, quantify, and manage climate risks and opportunities across portfolios.
The solution, part of Bloomberg’s Multi-Asset Risk System (Mars), supports financial institutions in navigating the financial impacts of climate change. The launch comes as regulators and central banks worldwide increase pressure on financial firms to evaluate their exposure to climate risks, according to Bloomberg.
The tool allows buy-side and sell-side firms to analyse different climate scenarios, using models aligned with the Network for Greening the Financial System framework. It integrates BloombergNEF’s Transition Risk Assessment Company Tool, which projects company revenue risks and opportunities based on factors such as supply chain exposure and regional footprint. Initially, users will be provided with a report assessing the financial impact of climate-related risk down to the security level, split out by physical acute, physical chronic and transition risk.
26% of European asset managers fail to disclose Waci
As climate-related financial regulations evolve, firms must embed climate risk into their investment and risk management strategies, according to Bloomberg. Mars Climate enables users to quantify financial impacts at the security level, categorising risks into physical acute, physical chronic, and transition risks.
Bloomberg’s Mars risk management suite is in use by over 900 firms globally. The new module aims to help firms comply with regulatory demands while also identifying sustainable investment opportunities.
Extreme weather events and shifting policy landscapes have made climate risk a critical consideration for global capital flows. As firms seek stronger financial safeguards, tools like Mars Climate would play a role in influencing insurance costs, investment in sustainable infrastructure, and long-term risk management strategies, according to the provider.
A study by Swiss Re has estimated that economic damages from natural catastrophes doubled over the past two decades, reaching $280 billion globally in 2023. “Portfolio and risk managers increasingly look to perform climate risk analysis alongside other financial risk assessments to manage risk and regulatory reporting,” said Dharrini Bala Gadiyaram, global head of risk product at Bloomberg. “As we continue to expand our climate risk solutions across Bloomberg, MARS Climate will enable users to assess portfolio vulnerabilities and opportunities related to climate change.”
