Portfolio & Sector Alignment Tool
Alpha-Klima follows the financial sector science-based targets (SBTi-FI) guidance put forth by the TCFD to assess and manage the transition risks towards a low-carbon economy at the sector and portfolio levels.
Portfolio ITR (Implied Temperature Rise) scores are calculated through an aggregation of all companies’ temperature scores within your portfolio. For each company, the scores are computed from publicly announced targets, which are mapped to regression models based on IPCC climate scenarios. The company is then awarded a score for each period (short-, mid- and long-term time-frames) and a selected GHG scope or set of scopes (1, 2 or 3), based on the ambition and coverage of the relevant targets.
Apha-Klima platform employs advanced quantitative analysis and simulation models to assess and manage transition risks towards a low-carbon economy. The platform offers functionality to align portfolio of loan and equities for Scope 1 2 3.
We use the TCFD/ISSB standards to determine a company/portfolio ITR (Implied Temperature Rise) based on assessment of corporate emission reduction target against the company alignment ambition.
Banks that fall within the scope of European Banking Authority’s Implementing Technical Standards on Pillar 3 disclosures on environmental, social and governance risks will have to disclose the Paris alignment of their credit portfolios by the end of 2024 at the latest.
Capital Requirement Directive (CRD) VI includes a new legal requirement for banks to prepare prudential plans to address climate-related and environmental risks arising from the process of adjustment towards climate neutrality by 2050. The latest revisions to the CRD VI mandate supervisors to check these plans and assess banks’ progress in addressing their climate risks.
See also: REGULATORY COMPLIANCE
