Luxembourg 2021

Climate Scenario Analysis 

In 2021, the Luxembourg financial sector is given a unique opportunity to run a so-called “climate scenario analysis” in order to understand its climate path.  This analysis is free of charge, confidential and is supported by the Luxembourg Government.  

The analysis will be performed using the methodology PACTA, developed by the not-for-profit think tank 2° Investing Initiative (2DII). The whole exercise will be coordinated by the Luxembourg Sustainable Finance Initiative (LSFI) with the technical support of 2DII.

Would you like to know more about this exercise and how to participate? Do not miss the launch webinar where the analysis, its objectives and methodology was explained. 

What are the benefits for participating institutions?

  • A confidential report showing the alignment of your financial portfolios to the Paris Agreement. The reports are interactive and give you the possibility to compare your results to your peers.
  • A unique opportunity to train your staff (e.g. Risk analysts) on climate scenario analysis and start an internal discussion on the matter. 
  • Participate in a Luxembourg wide initiative to help the sector have a snapshot of where it stands in terms of climate alignment.
  • Free training & technical support from 2DII and LSFI during the whole analysis with a central point of contact and dedicated webinars.
  • A debrief workshop with 2DII to better understand your results and understand what the next steps for your company could be 

How can I participate?

The Climate Scenario Analysis targets the fund, insurance and banking sector. Financial industries from these areas will be able to decide whether they would like to analyse their portfolios (equities and corporate bonds), loans books or both.

I would like to analyse my portfolio: 

The analysis of your portfolio (equity & corporate bonds) will be done by uploading your financial data into a dedicated online platform. If you would like to participate in the exercise, there are two options:

  • If you have registered to the launch webinar (regardless if you are able to attend live), you will receive the necessary information to participate straight after this webinar.
  • If you were not able to register to the launch webinar but you would like to participate in the exercise, please reach out to the LSFI (info@lsfi.lu).

The timeline for the exercise to analyse portfolios is as follows.

I would like to analyse my loan books:

The analysis of your loan books with be done by downloading a dedicated software which will allow you to run the exercise on site. To find out how to download the software and run the exercise, there are two options:

  • If you have registered to the launch webinar (regardless if you are able to attend live), you will receive the necessary information to participate straight after this webinar.
  • If you were not able to register to the launch webinar but you would like to participate in the exercise, please reach out to 2DII (pactacop@2degrees-investing.org).

The timeline for the exercise is as follows.

An introduction to the selected methodology

The selected methodology is PACTA. It is open-source, transparent, free of charge​ and based on forward-looking asset-level data in order to support company engagement​. It has been developed by 2 Degrees Investing Initiative (2DII), a not-for-profit think tank and has been previously used successfully in Switzerland, Liechtenstein and Austria​.

Modules of the analysis

  • Climate scenario analysis: sector exposure & technical mix, company level information​
  • Qualitative analysis of sustainable finance strategies and climate actions (optional)
  • Climate stress-tests (optional)
  •  Climate action guide 

Sectors covered

Power. Coal mining, Oil & Gas,Auto Manufacturing, Cement, Steel, Aviation, Shipping

Assets Covered

Corporate loans, Listed Equity and Corporate Bonds