FIS and PwC Climate Tech to Transform Risk Reporting
FIS Global, one of the world’s largest financial technology companies, has announced the launch of its Climate Risk Financial Modeler.
Powered by data from PwC, as part of a collaboration, the modeler is designed to help businesses better assess, reduce and report exposure and provide more proactive foresight into climate-related risks.
This offering comes at a time where global businesses are facing immense pressures to bulk out their business and financial strategies with climate considerations. As businesses around the world are continuing to harness disruptive technologies such as artificial intelligence (AI), FIS and PwC hope that the technology will be instrumental in assessing and predicting climate risks to businesses.
Reporting requirements to help mitigate climate change risks
Climate change and its consequences are set to continue causing global impact, with the World Economic Forum suggesting that it is expected to cause between US$1.7tn and US$3.1tn in damages per year. This includes significant areas such as infrastructure, property, agriculture and human health.
As a result, corporations across a broad range of industries are expected to feel the weight of the impact. Regulators are now seeking to increase climate-related reporting and stress testing requirements to better mitigate these effects.
Within the financial space, fintechs in particular are starting to focus on sustainability as a business necessity - not just to meet regulations, but also to remain competitive.
The Climate Risk Financial Modeler by FIS is designed to harmonise client data with third-party climate data. FIS states that it will be hosted on a new interface that is directly tailored to the risk management needs of financial institutions, as it seeks to drive more proactive foresight into climate-related risks.
“The launch of the FIS Climate Risk Financial Modeler is the latest chapter in our long history of market-leading risk management software and services throughout the money lifecycle,” says JP James, Head of Treasury and Risk at FIS. “Corporate climate risk and the related regulatory pressures are becoming increasingly important for executives and risk managers of all levels and across all industries.”
Empowering businesses to drive greater sustainability
FIS is also building on its insurance risk application capabilities with this launch to respond to client challenges, particularly when it comes to understanding how climate change can impact a business. Users can perform modelling at both local and global levels and will be able to project potential financial losses from severe weather events and determine the effects of climate change on their operations.
Likewise, FIS clients will also be able to gain a more meaningful assessment of their operations, investments and strategic positioning from a climate risk perspective, in addition to support from their climate-related regulatory compliance.
The solution makes use of powerful data from PwC US, combined with readily available information on a firm’s physical assets - such as its buildings and contents - alongside global climate data. It then performs the relevant calculations.
“PwC's climate risk modelling services team takes pride in helping companies make informed, predictive decisions around escalating climate risks," highlights Richard de Haan, Global Risk Modeling Services Leader at PwC US. "By providing a dataset that underpins FIS’ Climate Risk Financial Modeler, our team is helping to empower businesses of all sizes and sectors to shore up their operations against extreme weather events, address climate reporting requirements, and drive efficiency and sustainability.”
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