Powering better data-driven decisions by measuring policy-related transition risk daily, globally, automatically, at the level of the word with award-winning technology.
Policymakers, pundits, experts, and executives in NYC for #ClimateWeek and the United Nations General Assembly sessions begin the sprint to the end of the year imbued with purpose and determination to advance the energy transition and decrease carbon emissions. Their speeches and action will paint a picture of the world confidently moving in the direction of clean, renewable energy.
The great irony, of course, is that today's policy choices create what climate change experts call "transition risk."
The Corporate Finance Institute defines "transition risk" as follows:
"Transition risks result from the relative uncertainty created by the global shift towards a more sustainable, net-zero economy...(they) can be difficult to quantify or model. Regulatory, geopolitical, and even social pressures are creating material impacts on the operations of a business, its reputation, and the value of its assets, among others."
Indeed, the central banking community has been identifying regulatory and policy risks as a key component of climate transition risk since at least 2018:
That's right...VERBAL public policy creates real MEASURABLE impact both on the economy and on the environment. Transition risk is a moving target that triggers downstream reaction functions. But until recently it has not been possible to detect, measure or manage related risks.
Policymakers recognize the scale and importance of the problem. In April 2024, the NGFS issued a Transition Plan Package that provides perspective on how to manage a broad range of business and public policy risks as firms and economies implement the energy transition. We added the orange squares to highilght the overlap with regulatory policy:
What is missing from this framework? Quantifiable metrics. It does not deliver to markets the capacity to measure the transition risks related to shifts in public policy. Filling the gaps is about to become urgent as investors, lenders, and advocates grapple with intensifying, conflicting signals from voters.
The 2024 elections underscore the urgency of finding mechanisms to measure these transition risks. Green backlash motivated voters in the European Parliament elections and the French elections to demand that policyamkers trim their sails regarding gren transition initiatives. Similar pressures are on display in regional German elections and in the U.S. election. Meanwhile, UK voters chose to accelerate the energy transition and climate action activists brought various airports in Europe to a halt this summer as they glued themselves to tarmacs in protests over airline carbon emissions.
Other experts focus on measuring climate impact and potential financial impact via scenario analysis. We contribute a new kind of measurement tool that enables markets and advocates to measure every day the path towards a policy decision at the level of the word....like "hydrogen" or "enviromental justice" or "solar power."
Policy Risk Data to the Rescue
PolicyScope data has been measuring climate-related policy risks since 2020. Our CRRM3 data was awarded Finalist status at the 2021 G20/BIS TechSprint Competition. Our patented process converts official sector language into objective notional volume measurements and directional signals that can help investors evaluate daily shifts in policy priorities. Pairing the policy data with real world data from the physical environment (e.g., emissions levels) and capital markets (e.g., green bond market data) accelerates insight formation while helping analysts identify reaction functions between the policy verticals.
We make it easy for capital markets and advocates to track daily global policy activity across a range of issues:
Capital markets and advocates no longer need to view public policy risks as a random, exogenous variable. They can measure and manage the moving target known as climate policy and energy policy, no matter which politicians are elected into office:
Capital markets can access the data via daily tickerized data feeds. Strategists, advocates, and their GenerativeAI automated research assistances can read the underlying content configured for human readers (via our Tableau-based dashboard) or for computer readers (ask us about our ontology and tokenization capabilities).
BCMstrategy, Inc. delivers industry-defining quantitative and language data to help power advanced decision intelligence in capital markets, advocacy, and strategy consulting. The award-winning patented process provides multifactor time series data and structured language data designed from the beginning to support a wide range of AI-powered predictive analytics solutions
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