Our Services

Carbon Delta's goal is to alert investors of the climate risk profiles of securities, uncovering a universal risk embedded within the financial system, which until now has been under-evaluated and overlooked.

Climate Value-at-Risk (VaR) - Your key to performance optimization

Increase your portfolio’s returns

Asset managers interested in key-performance optimization can use climate risk data to identify outperforms in their portfolios.

Reduce Climate Risks and Report

Substantial financial losses from climate change could materialize by mid-century. Get ahead of your competition by executing a downside risk-protection strategy for climate change.

Engage more effectively with companies

Speak confidently with firms in your portfolio about future climate change costs and how to plan for or reduce these costs over time.

Improve your sustainability

Embed sustainability matters within the C-suite of your firm and connect with the public institutions that you count on. Comply with regulations before they are enacted.

We offer numerous services to help clients understand and assess climate change risks.

Data Subscriptions

Use Climate VaR calculations to protect your portfolio and optimize its performance.

Carbon Footprinting Services

Using only 3rd-party verified data, we offer comprehensive portfolio footprinting for Scope 1 and 2 carbon emissions.

Compliance and Reporting Support

We can help you craft a sustainability report, assist you with climate risk disclosure requirements or develop other material about climate risk performance.

Custom Software Development

If you are looking to establish new risk tools or even proprietary software, we can prepare your firm for climate change with our tailored support.

Methodology

CARBON DELTA's research is used to understand company-level risks brought about by the impacts of future climate change. We calculate the economic effects of climate change on the underlying business model of thousands of companies by developing a detailed analysis on emission reduction requirements defined in forthcoming regulations, technology opportunities and changing physical climate conditions onto company activities.

Climate Value-at-Risk

All climate risk factors are expressed as quantified costs or revenues for each climate change scenario. The effect on a company’s related securities are then computed using standard financial valuation models. The relative change in asset price presents a worst case drawdown under the given scenario and is called Climate Value-at-Risk. It presents the maximum simulated drawdown of the underlying security. Future costs are modelled 15 years into the future.

Data

The models we have developed integrate a wide spectrum of data, including:

  • financial data like sales figures and security prices,
  • macroeconomic statistics,
  • future greenhouse gas (GHG) price estimates,
  • a comprehensive company production location database,
  • scientific climate data and
  • internet research data.

CARBON DELTA uses a large set of over 50 different data sources. This includes publicly available as well as proprietary data. We utilize data from some of the most reputable climate and economic research institutes in the world. When possible, CARBON DELTA uses third-party verified, high-quality datasets.

Asset Classes

  • 20,000 companies
  • 60,000 securities
  • Equities and corporate bonds
  • Aggregation across many asset classes

Model Scenarios

Transition Risks

Expected Regulations (NDC Scenario)

Cost of the full implementation of voluntarily-declared low carbon development plans within the Paris Agreement, called the Nationally Determined Contributions (“NDCs”).

2°C Scenario

Cost of implementing a 2°C pathway.

Technology Opportunities

Opportunities and costs arising from technological shifts and changes.

Physical Risks

Extreme Weather

Effects related to Extreme Heat, Cold, Wind, Precipitation

Climate Trends

Effects related to long term climate effects like droughts, sea level rise, etc.

Transparency and Verification

We ensure transparency and optimal verification of our results in a three step process:

  1. Model Documentation
    We make our full model documentation available to our clients. Each computation step can then be traced and verified.
  2. Quality Assurance
    We employ a structured and rigorous quality assurance process.
  3. Backtesting
    Together with academic and corporate partners we currently engage in backtesting our methodologies and investigate the past performance of our “signal” when used as an investment decision tool.
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Further Information