Asset management: Stewardship of equity and debt portfolios

How can XDI help?

• In-depth analysis of climate-related physical risk at company, sector and geographical levels
• Assess risks using XDI’s proprietary databases
• Analyse risk under different climate scenarios and timeframes
• Deep dive on high risk exposures for further engagement on climate resilience

In this use case XDI used proprietary and third party databases to identify owned, operated and leased assets by using a name-based search for each equity and debt issuer.

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

Having established the asset profiles of each issuer, XDI performed risk analysis under a range of climate change scenarios. 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:

• Maximum-to-Date Value at Risk
• Technical Insurance Premium
• Productivity Loss
• Failure Probability
• Primary hazards driving risk
• Hazard, sectoral and geographic breakdown

Outputs from the analysis were used to update the market on material physical climate risk via the client’s TCFD disclosures.

What next?

XDI’s independent analysis of debt and equity portfolios allowed the asset manager to establish a baseline of risk. By identifying higher risk issuers, it was able to explore climate resilience strategies in future stewardship activity, alongside existing net-zero plans.