Oracle Cloud Service Enables Banks to Manage Climate Change Risk Across Portfolios
With new
"While banks work on climate-related financial risks that could affect them directly through their operations, they also need to be cognizant of their effect on climate indirectly through the businesses they finance. This dual responsibility requires the critical management of both risk and their own Net Zero commitments, which demands a significant effort from banks," said
According to a
With climate-related risks on the rise, it's imperative that banks can better understand and account for the impact of their holistic portfolio of assets from both a regulatory and business strategy perspective. With pre-built calculation models and dashboards, the service can help save banks time and effort, address global climate change reporting requirements, and incorporate climate risk into their future risk and investment decisions.
'Climate Risk' assessment made easier
Banks 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.
Also according to CDP, a leader in aggregating global climate disclosures on banks' portfolios, portfolio emissions are over 700x larger than direct emissions - and the risks of inaction are huge. Financial institutions must urgently decarbonize their portfolios, by disclosing the impact of their financing activities, setting science-based targets, and aligning all financing activity with the Paris Agreement.
Oracle's new cloud service enables financial institutions to calculate emissions across various asset classes and jurisdictions. This encompasses not only greenhouse gas emissions across an organization's operations and value chain but also financed and facilitated emissions from its customers. This allows for the computation of 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.
Key feature capabilities of Oracle's Climate Change Analytics Cloud Service include:
- Performing carbon accounting by calculating greenhouse gas emissions based on The GHG 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 visualizations to address requirements for standards boards and regulators.
- Using advanced analysis to source, configure, store, and analyze customer climate change data with rich data models for analytics.
- Helping to reduce IT investment with cloud-native technology that can meet the ever-changing climate change reporting requirements.
Learn more about Oracle's Climate Change portfolio at: https://www.oracle.com/financial-services/analytics/accounting-and-regulatory/#rc30p1
About
About Oracle
Oracle offers integrated suites of applications plus secure, autonomous infrastructure in the Oracle Cloud. For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.
Trademarks
Oracle, Java, MySQL and
View original content to download multimedia:https://www.prnewswire.com/news-releases/oracle-cloud-service-enables-banks-to-manage-climate-change-risk-across-portfolios-302122811.html
SOURCE Oracle