Case Study: a major commercial bank assesses climate risk in its loan portfolio with S&P Global’s Trucost

Understanding the Impact of Climate Change on a Bank’s Loan Portfolio

A major commercial bank worked with S&P Global to better understand how climate change could affect its loan portfolio and support TCFD-aligned reporting. The bank’s sustainability team needed comprehensive climate data and analytics to assess both physical risks from extreme weather and transition risks from carbon pricing and policy changes.

S&P Global’s Trucost team provided Carbon Earnings at Risk and Climate Change Physical Risk analytics to stress-test the loan book under different climate scenarios, using sector, location, and asset-level data to estimate exposure. The bank used these insights to map risk back to individual clients, engage borrowers on preparedness and adaptation, and improve risk management and reporting, with forward-looking estimates of financial risk across its portfolio.