Oracle Financial Services says its new Climate Change Analytics Cloud Service will help financial institutions understand financed emissions, address statutory compliance, and mitigate climate change-related risks.
The new cloud service enables financial institutions to calculate emissions across various asset classes and jurisdictions. This encompasses not only greenhouse gas emissions across an organisation’s operations and value chain but also financed and facilitated emissions from its customers.
It allows financial institutions to compute a climate rating at a counterparty level across the bank’s customer portfolio and incorporates climate change risk into other risk-management functions, such as project planning and risk audits and analysis.
“While banks work on climate-related financial risks that could affect them directly through their operations, they also need to be cognisant of their effect on climate indirectly through the businesses they finance,” said Oracle’s Jason Wynne. “This dual responsibility requires the critical management of both risk and their own Net Zero commitments, which demands a significant effort from banks.”
Oracle says financial institutions are challenged to comply with multiple frameworks across several jurisdictions, and collecting and storing the data necessary to meet these requirements can be daunting. This is especially true when dealing with large and complex global customers.
With built-in AI and Natural Language Processing (NLP) tools Climate Change Analytics can scour the internet for publicly available information about climate change initiatives by companies that the bank has invested in, which can aid in their overall assessment of climate risk.
Key feature capabilities of Oracle’s Climate Change Analytics Cloud Service include:
- Performing carbon accounting by calculating greenhouse gas emissions based on The Greenhouse Gas Protocol Corporate Accounting and Reporting Standard;
- Calculating and disclosing emission numbers for financed, facilitated, and avoided emissions and emissions removal based on the Partnership for Carbon Accounting Financials guidelines;
- Integrating climate risk into overall enterprise risk and investment decision-making with an in-house Climate Scorecard framework, probability of default (PD) and loss given default (LGD) models, and heatmaps;
- Accessing more than 100 prebuilt, cross-jurisdictional climate change reporting disclosures, analytics, and visualisations to address requirements for standards boards and regulators;
- Using advanced analysis to source, configure, store, and analyse customer climate change data with rich data models for analytics; and
- Helping to reduce IT investment with cloud-native technology that can meet the ever-changing climate change reporting requirements.
