Financial information and news provider Bloomberg has expanded its risk management solutions suite with the launch of its MARS Climate module, which aims to help portfolio and risk managers assess their exposure to the financial impacts of climate change.

Regulators and central banks across the world increasingly demand that financial firms assess their exposure to climate risks, the company says, driven by growing evidence of the economic impacts of climate change.

Economic damages caused by natural catastrophes, a Swiss Re study estimates, have doubled in real terms over the past two decades, reaching US$280 billion globally in 2023.

As the climate risk regulatory landscape evolves, coupled with the need to integrate climate into risk management systems, firms need tools, the financial data provider states, to manage climate-related risk and comply with regulatory reporting requirements.

To address this need, the module – accessible to customers via Bloomberg terminals – aims to help buy- and sell-side firms assess, quantify and manage climate risk and opportunities across portfolios.

The solution will enable users to transparently analyze various climate scenarios based on different integrated assessment models, consistent with the framework set forth by the Network for Greening Financial System ( NGFS ).

The risk model is powered by BloombergNEF’s transition risk assessment company tool, which projects company revenue risk and opportunities, combining companies’ activities, supply chain exposure and regional footprint under different NGFS climate scenarios.

Initially users will be provided with a report assessing the financial impact of climate-related risk down to security level, split out by physical acute, physical chronic and transition risk.

“Portfolio and risk managers increasingly look to perform climate risk analysis alongside other financial risk assessments to manage risk and regulatory reporting,” says Dharrini Bala Gadiyaram, Bloomberg’s global head of risk product. “As we continue to expand our climate risk solutions, the latest addition to our widely used risk management offering will enable users to assess portfolio vulnerabilities and opportunities related to climate change.”