The think tank 2° Investing Initiative (2DII) has unveiled a free and open-source climate scenario analysis toolkit specifically designed for banks.
Utilizing the Paris Agreement Capital Transition Assessment methodology, the toolkit, named Pacta for Banks, enables users to evaluate how their corporate lending portfolios align with climate scenarios in critical sectors and technologies.
According to 2DII, this tool allows banks to align their lending practices with climate objectives, inform climate target-setting decisions, and enhance their engagement with clients regarding their climate strategies. Additionally, it assists in identifying potential exposure to transition risks linked to a significant shift towards a low-carbon economy.
The toolkit has been thoroughly tested over the past two years by 17 leading banks, including ABN Amro, Barclays, Nordea, and UBS.
Michel van den Berg, a sustainability advisor at Rabobank, notes, “The Pacta methodology has provided valuable insights into the climate alignment of our power generation portfolio, laying the groundwork for future portfolio simulations that support our strategic planning.”