Bloomberg Expands Risk Management Solutions With MARS Climate

Bloomberg announced the launch of MARS Climate, a new risk management tool designed to help portfolio and risk managers assess their exposure to the financial impacts of climate change. This addition expands Bloomberg's existing offering related to physical and transition risks.

As global regulators and central banks increasingly require financial institutions to evaluate their climate risk exposure, the demand for tools to manage and report on climate-related financial risks has grown. According to a Swiss Re study, economic losses from natural disasters have doubled in real terms over the past two decades, reaching US$280 billion globally in 2023. The evolving regulatory landscape and the need to integrate climate into risk management systems further underscore the importance of these tools for companies to meet regulatory reporting requirements.

MARS Climate is designed to help firms, both buy-side and sell-side, to quantify, assess, and manage climate-related risks and opportunities in their portfolios. The solution allows users to analyze various climate scenarios based on different integrated assessment models, aligning with the framework set by the Network for Greening the Financial System (NGFS). The module’s transition risk model builds on BloombergNEF’s TRACT (Transition Risk Assessment Company Tool), projecting risks and opportunities for corporate revenues by considering business activities, supply chain exposure, and regional presence under different NGFS climate scenarios.

The module will provide users with reports detailing the financial impact of climate risks, categorized into acute, chronic, and transition risks at the asset value level. "Risk and portfolio managers are increasingly seeking to conduct climate risk analysis alongside other financial risk assessments to manage risks and regulatory reporting. With the ongoing expansion of our climate risk solutions, this latest addition to our risk management offerings, MARS Climate, will help users assess their portfolio's vulnerabilities and opportunities related to climate change,” said Dharrini Bala Gadiyaram, Global Risk Products Director, Bloomberg. 

Users can access MARS Climate via the Bloomberg Terminal using the command {MARS CLIMATE}. MARS provides risk analysis for both cash and derivative securities and enables firms to manage trading desk risk, market risk, counterparty risk (XVA), credit risk, hedge accounting, collateral requirements, and SIMM, all utilizing a common library of pricing and data for consistent analysis across workflows.

Additionally, Bloomberg Terminal users have access to Bloomberg's extensive sustainable finance offerings, including climate and other environmental indicators reported by companies, such as greenhouse gas emissions forecasts. Users also benefit from sustainability research provided by Bloomberg Intelligence and BloombergNEF.