• Clear
Approach in which a company’s or issuer’s environmental, social and governance (ESG) performance is compared with that of its peers ( the same sector or category) based on a sustainability rating. All companies or issuers with a rating above a defined threshold are considered investable. The threshold can be set at different levels (e.g. 30% best performing companies or all companies that reach a minimum ESG score).
Climate related-risks
Climate-related risks can drive financial risks such as credit, market, liquidity and insurance risks for financial institutions and pension plans. They can also lead to strategic and operational risks or reputational damage. Mismanagement of these risks can affect a financial institution’s or pension plan’s safety and soundness.
Climate stress test
Assessment featuring fully fledged scenarios that map out possible future development paths of transition variables (e.g. carbon prices), physical variables (e.g. temperature increases) and the related changes in macro variables (e.g. output in different sectors, GDP, unemployment) and financial variables (e.g. interest rates). These scenarios are then translated into changes in portfolio (risk) attributes
Climate-Related Opportunities
Efforts to mitigate and adapt to climate change also produce opportunities for organizations, for example, through resource efficiency and cost savings, the adoption of low-emission energy sources, the development of new products and services, access to new markets, and building resilience along the supply chain.
Climate-related risks

No definitions available.

Credit risks
Damage to collateral for DTI (debt-to-income) loans. GHG-intensive borrowers face higher costs of doing business and/or lower revenue reducing profitability.