Portfolio Temperature Assessment – CLAIM©

Climate Liabilities Assessment Integrated Methodology

Any climate scenario can be used by the CLAIM© methodology. By default, we work with a 2°C global scenario.
Existing methodologies to allocate national carbon budgets focus on a limited number of allocation criteria and therefore are criticized for missing relevant information.
The CLAIM© methodology does not select one specific criteria.
15 criteria have been identified as relevant keys for carbon budget allocation.
An algorithm runs as many as 2 million simulations of carbon budget allocation among these 15 criteria. The estimated carbon budget allocation is based on the analysis of these simulations.
We have analyzed more than 150 NDCs (Nationally Determined Contributions) to extract the objective and actionable information. Based on this analysis, we have built normalized and comparable NDC trajectories.
For each country, a gap analysis is performed between the carbon budget allocation and the NDC trajectory. This gap analysis results in a an assessment of the temperature of the NDC.
By aggregating the gap analysis by country at portfolio level, we assess the overall temperature of the sovereign bonds investment portfolios.

Environmental impact assessment and climate alignment of investments are more and more scrutinized. In this context, investors engage into more climate disclosure and monitoring of their portfolios.

CLAIM is a proprietary and unique methodology to analyse country climate strategies and provide an assessment of sovereign bonds climate risk exposure. As both a tool for analysis and communication of climate engagements, CLAIM can be a powerful tool to protect or improve investors’ reputation.

Applications of CLAIM©

  • Consistent analysis at granular level, and unique insights for long-term risk management
  • Further carbon disclosure and communication around climate engagements
  • Climate Stress-tests and impact assessment of the performance of national economies
  • Monitoring of performance discrepancies between a country’s NDC and its national carbon budget allocation

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