Innovation That Matters

The platform offers real-time analysis and street-level granularity | Photo source Brian McGowan on Unsplash

A platform helps financial institutions forecast climate risk

Financial Services

The platform forecasts risk through machine learning algorithms and satellite data

Spotted: The climate crisis not only risks the health of our planet – it also threatens global financial stability. A recent study by the Carbon Disclosure Project has found that 215 of the world’s biggest companies face $1 trillion (approximately €947 billion) in climate change risks. And as the potential scale of economic losses becomes clear, banks and other financial institutions are no longer seeing climate change through the lens of corporate social responsibility. Instead, they are seeing it as a financial risk management issue.  

But in order to effectively track climate risk, institutions need new tools and frameworks. This is where fintech startup Eoliann comes in. The Italian company uses satellite data and machine learning to help insurance companies, banks, and consultancies forecast the probability of specific climate risk events at a granular level of detail.  

For insurers, the startup’s insights inform decisions about policy creation and pricing. Meanwhile, banks can use the technology to meet regulatory requirements to report on environmental, social, and governance (ESG) risk exposure. For example, in the EU, new rules from the European Banking Authority came into force this year. These require banks to publish information on their ESG risks, and Eoliann can help with the production of these disclosures. 

Eoliann argues that its platform can benefit clients in several ways. It claims that its technology offers ‘real-time analysis’ and ‘street-level’ granularity and can be used to aggregate multiple risks and integrate with clients’ portfolios.   

The company recently received €1.35 million in funding, which it will use to expand its operations and develop its offer. 

Springwise has recently spotted several fintech innovations focused on tackling climate change and other ESG risks. These include a stewardship hub for pension fund transparency, a neobank tackling climate change, and a new platform that helps institutional investors track ESG incidents

Written By: Matthew Hempstead



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