The Challenge

As physical assets and portfolios face mounting risks from the effects of climate change, financial data platforms require robust methodologies that can predict the probability and severity of events accurately throughout the life of mortgages. This must be done at both the granular property level and the aggregate portfolio level. Additionally, our customer required a scalable and dynamic solution that could be used to scope risk across thousands of underlying properties and their mortgages. The data needed to integrate seamlessly into traditional financial workflows.

Accessibility, precision, and methodological rigor were therefore key priorities when choosing a climate analytics provider, enabling their own clients to plan their portfolio distribution effectively, particularly in high-risk areas.

Sust Global’s solution

Sust Global’s industry leading AI-powered climate data is able to provide transparency on climate risk across global portfolios, at the portfolio and individual mortgage level, starting with only identifiers (such as CUSIP or ISIN). Through frictionless integration with Sust Global’s API, real-time RMBS climate risk intelligence enables portfolio managers to conduct prospective analyses of investment opportunities, as well as completing thorough portfolio risk assessments. Climate risks are quantified in terms of probability and severity across six climate hazards: wildfire, floods, hurricanes, heatwaves, water stress and sea level rise.

To ensure that this data is fully integrated with the existing investment workflow, these risks are converted into financial loss projections by combining our AI-enhanced climate simulations with hundreds of sector-specific damage functions used throughout the insurance sector. This provides annual financial loss projections, hazard by hazard, at the portfolio and tangible asset level.

As a result, analysts and portfolio managers are able to proceed with confidence and clarity in their decision making in a changing climate. In doing so they are improving their risk-adjusted returns and fulfilling their fiduciary responsibilities. It also means that they are now better prepared for full compliance with any prospective climate reporting legislation likely to be introduced by the SEC.

Contact us via the form below to learn more about how Sust Global can provide your organization with access to reliable high frequency data insights that support climate-informed investment decisions via our flexible API integration.