Solution Brochure

Climate Pathways Solution
A flexible approach to facilitate scenario selection, assess
financial impact, and communicate eﬀectively.
Moody’s Climate Pathways offers a specialized scenario modeling solution for insurers, asset
managers, and pensions funds enabling quick assessment of the financial impact of climaterisks.
Users can select from a wide array of scenarios to best match the complexity of their business.
Powered by our award-winning Scenario Generator, which integrates many years of scenario
modeling, climate science, and deep insurance industry expertise, our solution stands out for its
robustness and flexibility. It enhances climate modeling capabilities, aids in navigating climatechange challenges, supports informed decision-making, and helps maintain compliance withevolving regulations and financial disclosures.

Moody’s Climate Pathways solution – June 2024

1

Climate Pathways Solution

MOODY’S UNIQUE COMBINATION OF DEEP INSURANCE DOMAIN
EXPERTISE, CLIMATE SCIENCE, MARKET LEADING SCENARIO MODELINGAND CALIBRATION CONTENT.
Enable a Flexible Approach to Mastering Climate Risk Scenario Analysis

Flexibility to vary theclimate assumptions andscenarios to see theimpact of different
choices and build
confidence with robust
recommendations.

Convert long-termclimate projections into
short-term impacts tobetter understandmaterial impact and avoid
missing key risks

Moody’s Climate Pathways Solution– June 2024

Integrate with existingmodeling infrastructure.
Produce financial
variables and asset classreturns ready to feed intocurrent valuations
systems.

Use our top-down
approach to drill down tosector level view of the
impacts across thedifferent climate
scenarios.

2Climate Pathways Solution

THE CLIMATE PATHWAYS SOLUTION OFFERSFLEXIBILITY→ Access all NGFS scenarios, with→the option to use other recognizedframeworks. Continually updatedwith the latest science.
→ Create short term shocks fromlong term climate scenarios,
directly in the application.

CONFIDENCE

RIGOR

Experiment with different
scenarios to gain a deeper
understanding of the impact ofdifferent assumptions andbroaden your analysis.

→ Build consistent analysis, enableinternal discussion andchallenge across different
functions. Drive consensus on
the best assumptions andscenarios to meet the uniqueneeds of your business.

→ Split out physical and transition
risks to determine attribution
and material impact.

→ Facilitate quicker production ofrobust and reliable asset class→ Visually display the outputs fromreturns and liability risk factors
the scenario analysis and use
to aid decision making.
the accompanying narrative to→ Review and modify advanced
explain your recommendations→ Understand and validate
model settings such as inflation
clearly to internal and external
assumptions with fullymodel, carbon tax impact,
stakeholders.
transparent scenarios andphysical damages and more.
quarterly documentation→ Drive faster board decisions→ Flexible outputs aligned to yourdetailing the underlying
through confidence in yourunique asset portfolio profile.
methodology.
scenario selection, outputs, and→ Easily integrate with our AXIS™
credible recommendations.
→ Access to Moody’s experts withactuarial system and other core
insurance industry, climate,actuarial and investment systems.
scenario, and calibration
expertise.
→ Review and modify settings suchas scenario source, baseline, andcurrency.

Moody’s Climate Pathways Solution– June 20243

Climate Pathways Solution

USING CLIMATE PATHWAYSThe Climate Pathways solution helps in areas such as own risk and solvency assessment (ORSA),
strategic asset allocation (SAA), and forward-looking financial disclosures.
OWN RISK AND SOLVENCY ASSESSMENT (ORSA)
Confidently assess and quantify the financial impacts fromphysical and transition risk, using different assumptions andscenarios relevant to your business. Translate long-term scenarios
to short-term stresses. Build credible recommendations to theboard.

STRATEGIC ASSET ALLOCATION (SAA)
Explore changes to your business’ capital market assumptions.
Quantify the financial impacts on asset classes and market riskfactors from physical and transition risk. Present credible
recommendations to internal and external stakeholders.

FORWARD-LOOKING FINANCIAL DISCLOSURES
Analyze your financial exposure to climate risk by navigating theimpacts of different climate assumptions and scenarios relevant toyour business. Identify the material financial impacts of physicaland transition risk and build robust, transparent climate-related
financial disclosures to respond to requirements such as thosefrom the TCFD, ISSB and CSRD.

WHAT WE DELIVERMoody’s Climate Pathways Solution– June 2024

4

Climate Pathways Solution→ The scenario content needed to measure the financial impact of climate risk on asset classes
and market risk-factors.
→ Access to the Climate Pathways Web Application to view and select different assumption
sets.
→ Top-Down deterministic scenario sets that can be used directly in valuation/cashflow models
and quantitative SAA processes for each of the selected paths from your preferredframework, such as NGFS.
→ Provides climate-adjusted capital market assumptions (CMAs) across 30+ economies,
including all the major asset classes and risk factors relevant for insurers.
→ Provides a sector level view of impacts across the different climate scenarios.
→ Access to Moody’s climate and calibration experts for guidance on the scenario selection.
→ The ability to use scenarios to analyze the short-term impacts of market repricing/capitalization events.
→ An easy add-on calibration service for existing Scenario Generator customers.
→ Full documentation.
→ Workshops with Moody’s experts.

OUR SOLUTION ENABLES INSURERS ASSET MANAGERS, AND PENSIONFUNDS TO
→ Gain confidence in scenario selection to address needs of different business functions andthe business overall.
→ Develop a deeper understanding of the financial impact of climate risk on their balancesheet.
→ Build internal credibility by being able to rely on outputs and justify recommendations tointernal and external stakeholders.

Moody’s Climate Pathways Solution– June 2024

5

Climate Pathways Solution

MOODY’S AWARD-WINNING SOLUTIONS HELP ORGANIZATIONS IN AN ERA
OF EXPONENTIAL RISK

Moody’s Climate Pathways Solution– June 2024

6

CONTACT US
Climate Risk for Insurers

AMERICASEMEA+1.212.123.4567
clientservices@moodys.com+44.20.1234.5678
clientservices.emea@moodys.com

ASIA (Excluding Japan)

JAPAN+852.1234.5678
clientservices.asia@moodys.com+81.1234.5678
clientservices.japan@moodys.com© 2024 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s
Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”).
All rights reserved.