Segment by Cervest Rating: the benefits of creating segmented asset portfolios

Instead of searching for assets with a specific climate risk rating and then adding manually to a portfolio, you can now filter by Cervest Rating and create segmented portfolios in just a few clicks.

With leading ESG reporting frameworks, such as the Taskforce on Climate-related Financial Disclosures (TCFD) requiring comprehensive reports on the assets that are only deemed to be at ‘climate-related material risk’, this new feature makes it easy to segment portfolios and generate report-ready insights specifically for your chosen subset.

So, how does it all work?

Customers can segment their portfolios by Cervest Rating and apply filters such as emission scenarios, time horizons and climate hazards to create an even more bespoke subset of their portfolio.

For example, one of the UK’s leading manufacturing firms needed to analyze the warehouses in their supply chain most susceptible to flooding. They chose a business as usual emission scenario to demonstrate the worst-case scenario to risk managers, and selected the year 2035: a time horizon that would have an impact on those currently responsible for the asset.

They used the segmented insights to guide key business decisions on risk adaptation and mitigation for the assets worst affected, and what’s more, shared the entire segmented portfolio directly from EarthScan™.

There are multiple use cases for segmenting an asset portfolio. Here are just a handful of them.

• Create a point-in-time snapshot: Select your IPCC emission scenario, time horizon and climate hazards to create a point-in-time snapshot of your assets. For instance, you might choose “‘Extremely High’ to ‘High’ Climate-related Risk (Cervest Ratings D–F) Coastal Flooding and Wind in 2035” for use in a specific presentation or to support other ESG reports.

• Strengthen ESG reporting: Segment portfolios by which assets are at material risk (Cervest Rating C or above) and generate report-ready insights specifically for this subset, in-line with TCFD recommendations.

• Prioritize risk adaptation: Create portfolios of assets that you can flag for significant risk and share with the relevant stakeholders to investigate futher, and prioritize for risk adaptation planning if required.

• Inform pre-transaction due diligence: Pinpoint assets with the lowest exposure to climate risk in a portfolio by segmenting portfolios by low or very low climate-related risk (Cervest Ratings A and B) to keep investment deals moving quickly.

By segmenting portfolios, organizations can focus climate-related analysis and decision-making on the assets that need it most, enabling them to effectively allocate resources and climate-align decisions for effective climate adaptation.

Segment by Cervest Rating is one of the latest features to be added to Cervest’s climate intelligence (CI) product, EarthScan. The result of five years of research and development by a team of world-leading multidisciplinary experts, Cervest’s climate intelligence product EarthScan provides organizations with intelligence to drive confident, resilience-building decision-making.

By providing a truly unified picture of climate risk, turning complex climate science into relevant, robust and actionable insights, organizations can screen and report on thousands of assets for physical climate-related risk.

Discover how sustainability leaders are using EarthScan to power climate action by downloading our free ebook.