In addition to being a top environmental concern, climate change is a systemic risk of global magnitude. It materializes as a measurable economic factor that affects the cost of capital and market stability and has a direct impact on the value of assets, investments, and the long-term viability of companies.
Many financial firms and regulators now believe that managing climate risks is just as critical as managing market, credit, or liquidity risks. Faced with this new challenge, we need an international standard that allows professionals to quantify this new variable.
In response to this need, the Spanish Institute of Analysts, the EFFAS (European Federation of Financial Analyst Companies), and Marsh McLennan, a world-leading professional services firm specialized in risk, strategy, and people, have launched the EFFAS Certified Climate Risk Analyst program, also known as the ECRA certification. In other words, it develops the concept of a certified climate risk analyst.
The main objective of this program is to train professionals to identify, analyze, and manage the risks and opportunities arising from climate change and the global transition toward a decarbonized economy.
On an international scale, the ECRA certification is aimed at a broad range of professions, including risk managers, financial analysts, engineers, sustainability managers, and consultants. It provides a solid starting point for calibrating risks and, above all, teaches analysts how to use modeling and analysis tools to translate climate impacts into concrete financial figures that affect companies' bottom lines and decision-making.
As part of the launch of this new certification, Moeve's head of Risk and Business Continuity, Eva López de Sebastián, participated in the round table "Pricing climate: how companies and the financial sector value and manage climate risk" held in Madrid on November 18, alongside prominent financial analysis, sustainability, and corporate risk management professionals.
"Quantifying climate risk not only allows us to foresee challenges, but also to optimize our operations and investments and to develop more resilient solutions," highlighted López de Sebastián. "This approach helps us create long-term value and consolidate our strategy to drive the development of new sustainable energies. In fact, Moeve already has two Risk and Continuity Specialists that are in the process of obtaining the ECRA certification."
Thus, the focus was placed on how integrating these factors into corporate strategy is vital for resilience and competitiveness in the medium term, based on measuring climate risks using comparable technical criteria.
In the words of Jesús López Zeballos, Chair of the EFFAS Advisory Council, the ECRA certification "provides the necessary knowledge to interpret scenarios, assess impacts, and contribute to a more resilient economy that is better prepared for climate challenges."
Physical and transition risks
The certification — structured in nine modules and three blocks — explores two large risk categories. Firstly, physical risks, which encompass material damages and operational interruptions caused by extreme weather events.
Secondly, transition risks, which stem from regulatory changes, technological progress, and variations in market demand driven by decarbonization.
Rigorous climate risk assessment can have an impact that goes beyond merely mitigating the effects of climate change. Highlighting the cost of not taking action and aligning sustainability objectives would serve as a catalyst to mobilize regulators and organizations to promote measures and solutions that encourage decarbonization, such as the development of renewable fuels.
In short, ECRA is a benchmark for building a more transparent economic system with more sustainable finances that is, possibly, better prepared to face the climate challenges of the future.