Bespoke climate solutions

Different organisations have different needs when it comes to incorporating climate-related considerations into their operations, hence our offering of bespoke climate solutions. We answer specific climate-related questions insofar as they relate to economics, finance or politics. This can include quantitative analysis such as financial modelling or qualitative analysis such as policy assessments or literature reviews. Projects are typically delivered in the form of a presentation, written report or data files and can range from many months’ work to just a few days.

Recent work for clients includes: assessing the economic impact of recent European green initiatives; estimating the value of stranded assets in a net zero world; analysing China’s energy needs and how its energy policies are influencing its global economic and political ties; quantifying the positive spillovers from green R&D spending in the aerospace sector.

A range of new climate-related regulations are being introduced across the world. We can help clients navigate these regulations from a top-down or bottom-up perspective. In the former we assess the effect that regulations such as carbon taxes have on countries and sectors, while in the latter we assess their effect on individual companies, including how to comply with climate-related financial reporting rules.

The TCFD recommendations recently became a mandatory reporting requirement for the largest UK-based asset managers and listed corporates. We have subsequently worked with asset managers and local authority pension schemes to help them understand their obligations under these new regulations and develop the processes and structures necessary for compliance. We also help with scenario analysis, using metrics and setting targets. We offer these services to asset managers, asset owners and corporates. Compliance is key, but we also help clients to identify investment opportunities.

We have a range of proprietary data, tools and modelling expertise to help clients in the climate space. Our data, models and tools can be acquired directly, or indirectly through bespoke consulting projects in which we use these data, tools or models.

Our climate transition tool provides decarbonisation pathways for 24 S&P 500 sectors under different scenarios. It is underpinned by rigorous research, analysis and science, as well as an understanding of the latest low-carbon technologies, their prices and recent trends by sector and activity. This tool has a range of practical uses for investors and corporates such as: compliance with TCFD and other regulations; setting objectives and measuring performance; understanding transition risks; engaging with corporate management teams; benchmarking and aligning activities with net zero and the goals of the Paris Agreement.

The team at Fathom has a wealth of modelling experience. For example, we are one of a handful of consultancies that has a bespoke global macroeconomic model. We also have a model which measures different types of financial risks in 177 different countries. We recently built a model to estimate the value of stranded capital in a net zero world and quantify the amount of green investment needed to meet net zero. We are very familiar with mainstream climate economic models, their limitations and work with clients to find the best modelling solutions to their needs. We have excellent data visualisation capabilities and expertise working with geolocated data which we use to model climate economic risks under different scenarios.

Our proprietary climate-related data, available for up to 180 countries, include country-level degree of required adjustment scores (to be consistent with net zero) and scores measuring countries’ relative export strengths by their carbon intensity (in other words, who is good at exporting ‘clean’ and ‘dirty’ things). Also coming soon country transition risk scores and a net zero alignment indicator. As well as producing our own data, we have experience in finding and handling key climate and economic data. We work with data providers and have helped them improve their climate-related data offerings.