Risk Management Solutions (RMS) said it will partner in an innovative program launched by HSBC to provide fund managers globally with direct access to specialist climate change research. 

RMS said that the present and future implications of climate change have become increasingly critical to investment portfolio management and this is why the need for a robust risk assessment has come into sharp focus.

The new research will allow fund managers to draw on in-depth research to underpin their investment decisions. “The current turmoil in the financial markets acutely illustrates the importance of having sound risk management processes in place, and the potentially dire pitfalls of inadequate due diligence,” said Jason Futers, vice president at RMS. “Climate change is not just a future threat — it is already having an impact today, and fund managers have a duty to their investors to understand how it can affect their portfolio risk.”

RMS will provide access to its products and services through the Climate Change Research Facilitation Program, including real-time information on global catastrophes and their estimated insured and uninsured impacts. This intelligence can be used to help steer investment decisions on sectors likely to be positively or negatively impacted by an event, and to understand and hedge against severe potential losses. 

Climate risk analysis will also be made available to help fund managers quantify their direct and indirect exposure to catastrophic risk, and develop strategies to effectively manage and transfer the risk. Hot spots of future risk to properties, operations and supply chains can also be identified through a climate change risk screen.

“We’ve seen a surge in the demand for weather and catastrophe risk modeling analytics to help address climate change impacts,” said Celine Herweijer, director of the RMS climate change practice. “Prudent businesses are beginning to ask how and where climate change will materially impact their operations, value chain, investments and wider commercial environment. They realise that climate change is not only altering their risk landscape, but necessitating a longer-term outlook, and that understanding this future risk is the first step to reducing it.”

Other major research providers partnering in the program are: Ernst & Young; New Energy Finance; and the U.K. Met Office.

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