In this interview conducted by CeFPro, Alex Clark, Research Director at Asset Impact, shares how asset-based data can reshape the way financial institutions assess and manage climate-related risks. As banks and investors face growing regulatory demands and increasing pressure to align portfolios with climate goals, traditional top-down methods often fall short.

Alex explains how asset-based insights, which are grounded in physical infrastructure and forward-looking investment signals, can enhance scenario analysis, support regulatory disclosures, and reveal opportunities for strategic decision-making.

Watch the 20 minute video to explore how this approach is being applied across the financial industry and what it means for the future of climate risk frameworks.

Transcript

1. Introduction (00:00 – 00:45)

Mark Norman: Welcome to this CeFPro interview. I'm joined today by Alex Clark, Research Director at Asset Impact. We'll be discussing asset-based data and how it's shaping climate risk management in financial institutions. Alex, thanks for joining us.

Alex Clark: Thanks very much for having me. Looking forward to the conversation.

2. What is Asset-Based Data and How Does It Work? (00:45 – 03:39)

Mark Norman: To start, could you explain what asset-based data is and how it’s used in the context of climate risk?

Alex Clark: Asset-based data refers to granular information about individual production facilities, energy assets, manufacturing sites, and other physical infrastructure. Instead of analyzing climate risk at the company or sector level, this approach looks at the actual assets that generate emissions or are exposed to physical climate risks.

This allows us to evaluate how companies might respond to transition pathways—for instance, whether they have the ability to shift to lower-carbon production processes, or what physical risks their operations face due to flood or drought exposure.

At Asset Impact, we connect this data with financial institutions’ portfolios to enable more accurate risk analysis and investment planning.

3. Application of Asset-Based Data in Financial Institutions (03:39 – 12:34)

Mark Norman: How are financial institutions currently using this kind of data?

Alex Clark: We're seeing a growing number of institutions integrating asset-level insights into their climate risk assessments and scenario analysis. This includes everything from understanding which companies are better positioned to decarbonize, to working with in-house or third-party physical risk experts to assess vulnerability to climate hazards.

It’s still early days. While some teams are building this into their climate models, in many cases this level of granularity is new. But we’re helping clients move beyond surface-level disclosures and into meaningful integration with their risk frameworks.

Mark Norman: So it goes beyond regulatory reporting—this is also about strategic decision-making?

Alex Clark: Exactly. There's real potential to identify opportunities as well as risks. For example, asset-level data can highlight where a company is investing in clean technologies, or where certain assets are likely to become stranded.

It’s about building a more complete picture that informs both risk and return decisions.

4. Real-World Examples (12:34 – 14:59)

Mark Norman: Could you give an example of how this plays out in practice?

Alex Clark: One example is in the automotive sector. We’ve helped clients assess the extent to which manufacturers are investing in EV production capacity. At the asset level, you can identify plants that have already been converted to produce electric vehicles and compare that to broader net zero pledges.

This insight gives a much more accurate view of a company’s transition progress than relying on corporate targets alone.

5. Regulatory Use Cases (14:59 – 18:08)

Mark Norman: And what about regulation—how does asset-based data support compliance?

Alex Clark: Regulations like the EBA’s Pillar 3 ESG disclosures require banks to assess financed emissions, exposure to climate-sensitive sectors, and alignment with transition pathways. Asset-based data helps make these assessments more robust by grounding them in actual production data and forward-looking investment signals.

We’ve collaborated with financial institutions to build these datasets into their regulatory reporting processes, helping improve both accuracy and transparency.

There’s still a long way to go before this becomes standard practice, but the direction of travel is clear.

6. Future of Asset-Based Data Analytics (18:08 – 22:15)

Mark Norman: Where do you see this heading? What’s the future for asset-level analytics?

Alex Clark: We’re just scratching the surface. There’s a whole constellation of potential applications—portfolio monitoring, credit risk, insurance underwriting, even internal pricing of climate risk.

Ultimately, we’re working toward a world where asset-based data is fully embedded in financial modelling—used as standard across risk teams. But we’re not there yet. It’s going to take continued innovation and collaboration across the ecosystem.

That said, it’s an exciting space to work in. There’s a kind of problem-solving aspect to uncovering the puzzle of how companies are positioned for the transition. It makes the work both technically interesting and strategically important.

7. Conclusion (22:15 – 23:06)

Mark Norman: Alex, thank you very much for the discussion. It’s been fascinating to hear about this space and the work you're doing. We wish you all the best.

Alex Clark: Thanks very much. It's been great to talk with you.

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