Asset management: Benchmark fixed income portfolios

A global asset manager needed to asses physical climate risks within its fixed income portfolios as part of an internal risk assessment.

* Assess climate risk in sovereign and sub-sovereign bonds
* Set investment strategies using a single, global dataset
* Deep dive on high risk exposures to inform portfolio composition
* Deep dive on high risk exposures for further engagement on climate resilience

How can XDI help?

  • Assess climate risk in sovereign and sub-sovereign bonds
  • Set investment strategies using a single, global dataset 
  • Deep dive on high risk exposures to inform portfolio composition

Using XDI’s Gross Domestic Climate Risk Dataset, the client was able to benchmark the relative physical climate risk inherent in each sovereign and sub-sovereign issuer.

The use of XDI’s database avoided the client needing to provide information for each issuer individually, reducing implementation time and pressure on analyst teams.

Having established the issuer profiles within the client’s portfolios, XDI provided tailored access to its GDCR database. The client was able to identify hotspots of climate risk and areas of the portfolio where further analysis would be needed.

Results

Metrics provided to the client included:

  • Aggregate Damage Ratio per sub-region
  • Average Damage Ratio per sub-region

Outputs from the analysis were provided in a tabular format allowing the client to perform its required benchmarking analysis.

What next?

XDI’s independent analysis of sovereign portfolios allowed the asset manager to establish a baseline of risk. By identifying higher risk issuers, it was able to explore future strategies for portfolio composition.

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From simple, low cost analysis, to complex, detailed and specific,
XDI delivers actionable results

Our vision is not just to identify physical climate risks, but to mitigate them.
XDI can help you develop business plans for adaptation, helping you move from risk to resilience.

Talk to us today to find out more.