Carbon Delta AG: Modelling the impact of climate change on the financial risk of investments

This case study has been created from the Finance for the Future Awards. This entry was a finalist in the ‘Investing and financing’ category.

Carbon Delta was a data analytics firm based in Zürich. It specialised in identifying and analysing the climate change resilience of publicly traded companies. The company developed an automated, forward-looking climate risk metric called ‘Climate Value at Risk’ (Climate VaR). Climate VaR calculates the potential impact of climate change on a company’s market value and is aimed primarily at the investment and banking industries. By expressing climate risk in financial terms, Carbon Delta helped financiers to understand what the potential future costs of climate change could mean for valuing investments today.

‘By considering both physical and transition risks, Carbon Delta developed a platform that considers factors that can lead to financial impacts, including potential future costs or asset valuations. As a result, the judges agreed that Carbon Delta’s approach could help to direct capital to low-carbon business models.’

Finance for the Future Awards judges