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The Science of Climate Change

Climate change is no longer a distant threat or just a possibility, it is now a reality for all of us. In this pathway, Kevin Trenberth, a renowned climatologist, delves into the science behind climate change. He first introduces the climate system, its main components and forces.

Tackling the Plastic Crisis

Plastic pollution is by far the biggest threat to our oceans and this remains an incredibly tough problem to solve. Plastic credits could potentially serve as one of the much needed solutions for this crisis.

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The Scale of the Net Zero Challenge

The price of meeting net zero is estimated to be between $100-150 trillion over the next 30 years. Regardless of this cost, we need to reach net zero before climate change does irreversible damage to the environment and the economy.

ESG, Sustainability and Impact Jargon Buster

ESG, sustainability, impact… they all just mean green, right? Not quite. Despite being used often interchangeably, there are distinct differences between these terms.

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The Science of Climate Change

Climate change is no longer a distant threat or just a possibility, it is now a reality for all of us. In this pathway, Kevin Trenberth, a renowned climatologist, delves into the science behind climate change. He first introduces the climate system, its main components and forces.

Tackling the Plastic Crisis

Plastic pollution is by far the biggest threat to our oceans and this remains an incredibly tough problem to solve. Plastic credits could potentially serve as one of the much needed solutions for this crisis.

More pathways

Book a demo

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Expert led content

+1,000 expert presented, on-demand video modules

Learning analytics

Keep track of learning progress with our comprehensive data

Interactive learning

Engage with our video hotspots and knowledge check-ins

Testing & certification

Gain CPD / CPE credits and professional certification

Managed learning

Build, scale and manage your organisation’s learning

Integrations

Connect Sustainability Unlocked to your current platform

Featured Content

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The Scale of the Net Zero Challenge

The price of meeting net zero is estimated to be between $100-150 trillion over the next 30 years. Regardless of this cost, we need to reach net zero before climate change does irreversible damage to the environment and the economy.

ESG, Sustainability and Impact Jargon Buster

ESG, sustainability, impact… they all just mean green, right? Not quite. Despite being used often interchangeably, there are distinct differences between these terms.

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The Role of External Ratings when Engaging with Clients

The Role of External Ratings when Engaging with Clients

Martin McAspur-Lohmann

In this video, Martin McAspurn-Lohmann explores the role of external ratings and strategic client categorisations in financial institutions. Learn how ratings influence portfolio management, funding decisions, and product development in the evolving landscape of the energy transition.

In this video, Martin McAspurn-Lohmann explores the role of external ratings and strategic client categorisations in financial institutions. Learn how ratings influence portfolio management, funding decisions, and product development in the evolving landscape of the energy transition.

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The Role of External Ratings when Engaging with Clients

12 mins 34 secs

Key learning objectives:

  • Understand the role of external ratings and ESG scores in financial decision-making

  • Understand different client categorisation strategies for financing the energy transition

  • Identify how financial institutions use ratings for net zero portfolio management

Overview:

External ratings and ESG scores play a critical role in financial institutions' decision-making, from investment strategies to portfolio management. Ratings from agencies like S&P, Moody’s, and Fitch influence funding decisions and product development. It is important to understand key methodologies for assessing climate risks, governance, and sustainability strategies, and how institutions categorise clients based on transition plans. By integrating external ratings with internal assessments, financial institutions can better navigate the evolving energy transition landscape and drive meaningful engagement with clients.

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Summary
Why are external ratings and ESG scores important for financial institutions?

External ratings and ESG scores provide a benchmark for assessing a company's financial and sustainability performance. Agencies like S&P, Moody’s, and Fitch incorporate climate risks, governance, and ESG factors into their credit ratings. These scores influence funding decisions, investment strategies, and product development, such as ESG-linked bonds and sustainable investment funds.

How do rating agencies assess transition risks and sustainability?

Agencies use various methodologies to evaluate companies' exposure to climate transition risks, physical climate risks, governance frameworks, and sustainability performance metrics. S&P, for example, integrates ESG factors directly into its credit ratings, while Moody’s Carbon Transition Indicators assess emission reduction targets and alignment with global climate goals. These assessments help financial institutions understand long-term credit stability and investment risks.

How do financial institutions use ratings in portfolio management?

Financial institutions rely on external ratings to assess and categorise clients based on their transition plans. The Glasgow Financial Alliance for Net Zero (GFANZ) outlines four key financing strategies:

  1. Financing Climate Solutions – Supporting companies driving decarbonisation, like renewable energy firms
  2. Investing in Aligned Companies – Funding businesses already aligned with the 1.5°C pathway
  3. Supporting Transitioning Companies – Assisting firms working towards alignment, such as automakers shifting to EVs
  4. Managing High-Emitting Assets – Phasing out high-carbon assets responsibly to avoid economic disruption

What are the challenges of relying on external ratings alone?

External ratings provide valuable insights but differ in methodology, which can lead to varying scores. They should not replace internal assessments but rather complement them. A combined approach using both internal and external ratings helps financial institutions calibrate their models, ensure market consistency, and tailor financial solutions to clients' specific needs.

How can financial institutions engage with clients on the energy transition?

Institutions must leverage data-driven strategies to guide clients through their transition plans. By aligning financing with net zero targets and offering tailored advisory services, they can help clients navigate risks, secure funding, and enhance their sustainability performance. Engagement is crucial for clients not yet aligned with transition goals, as financial institutions play a key role in influencing positive change.

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Martin McAspur-Lohmann

Martin McAspur-Lohmann

Martin McAspurn-Lohmann, a banking and corporate finance professional with over two decades of experience, has managed large teams and advised corporates and funds in energy and commodities sectors on debt and equity transactions. He is passionate about the energy transition and has been involved in banks' transition and sustainability strategies since 2015, including client advisory services, product development, and managing transition risks.

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