With new Oracle Climate Change Analytics Cloud
Service banks can calculate and assess the impact of emissions in
their operations and those of the businesses they finance
AUSTIN,
Texas, April 22, 2024 /PRNewswire/ -- Earth
Day -- Financial institutions are under increased pressure
from regulatory bodies to understand their environmental footprint
and that of the companies they finance or invest in, otherwise
known as financed emissions. To help banks better assess climate
risk Oracle today announced Oracle Climate Change Analytics Cloud
Service. With built-in AI, the new reporting and analytics solution
is designed to help financial institutions understand financed
emissions, address statutory compliance, and mitigate climate
change-related risks.
"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
Jason Wynne, global vice president
for finance, risk, and compliance product development, Oracle
Financial Services. "Oracle Climate Change Analytics Cloud Service
enables financial institutions to calculate, and analyze the impact
of their carbon emissions, as well as climate targets on current
and planned investments to get a full picture of the bank's
resiliency and risk around climate change."
According to a National Oceanic and Atmospheric
Administration report, the global average atmospheric carbon
dioxide in 2023 set a new record high
at 419.3 parts per million. The Financial
Stability Board (FSB) adds that "These risks are global in nature,
and will have effects across all entities, sectors, and
economies….the breadth of climate-related risks – including their
possible simultaneous occurrence across multiple jurisdictions and
sectors – also has implications for the resilience of the financial
system."
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 Oracle Financial Services
Oracle Financial
Services provides solutions for retail banking, corporate banking,
payments, asset management, life insurance, annuities, and
healthcare payers. With our comprehensive set of integrated digital
and data platforms, banks and insurers are empowered to deliver
next-generation financial services. We enable customer-centric
transformation, support collaborative innovation, and drive
efficiency. Our data and analytical platforms are designed to
help financial institutions drive customer insight,
integrate risk and finance, fight financial crime, and comply with
regulations. To learn more, visit our website at:
https://www.oracle.com/financial-services/
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 NetSuite are
registered trademarks of Oracle Corporation. NetSuite was the first
cloud company—ushering in the new era of cloud computing.
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SOURCE Oracle