EDHEC Launches Scientific Climate Ratings to Set New Benchmark in Climate Risk Assessment
In a major step toward more precise climate risk evaluation, EDHEC Business School has launched Scientific Climate Ratings (SCR)—Europe’s first public rating agency focused on the financial materiality of climate-related risks. Born from research at the EDHEC Climate Institute, this initiative blends climate science, geospatial analytics, and financial modeling into a unified and transparent rating framework.
At launch, SCR evaluates over 6,000 infrastructure assets worldwide. The agency plans to expand its coverage by 2026 to include 5,000 of the globe’s largest listed companies, making it one of the most ambitious climate risk assessment platforms in the world.
SCR introduces two complementary risk indicators:
- Potential Climate Exposure Rating (PCER): A forward-looking metric assessing an asset’s vulnerability to climate risk under a “continuity” scenario based on current policy and emissions trends. Ratings follow a simple A–G scale.
- Effective Climate Risk Rating (ECRR): A more in-depth analysis quantifying potential financial loss in Net Asset Value (NAV) through 2035 and 2050. It uses probability-weighted pathways across multiple climate scenarios, also on an A–G scale.
Both models are enhanced by insights from EDHEC’s proprietary ClimaTech database, which tracks standardized decarbonization and resilience measures. These adjustments reflect real-world efforts by firms or asset managers to mitigate or adapt to climate risks, providing a more nuanced picture of risk exposure and financial impact.
To further explain the SCR methodology and its applications for investors, regulators, and policymakers, EDHEC will host an online session on July 3. The session will be led by Maria Peykova, Sales Director, and Rémy Estran-Fraioli, CEO of Scientific Climate Ratings.
This initiative marks a critical evolution in the integration of science-backed metrics into financial decision-making and could become a central tool in the global transition to climate-conscious investing.
