Climate Risk Pilot Delivers Key Findings on Wildfire Threats to Loan Portfolios

1. Aisix Solutions Inc.is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. 
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Aisix Solutions Inc.
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Aisix Solutions Inc. (AISX:TSX.V; AISXF:OTCQB; QT7: FSE) has completed a pivotal climate risk pilot project in collaboration with a major Canadian financial institution. This project has been developed to evaluate climate-related risks within the institution's commercial lending portfolio and focuses on wildfire hazards, providing essential insights on potential climate change impacts on loan performance across multiple Canadian provinces. Aisix designed the pilot to align with OSFI B-15 guidelines from the Office of the Superintendent of Financial Institutions. These guidelines require that federally regulated financial institutions assess and mitigate physical climate risks in their loan portfolios.

Utilizing advanced climate analytics and modeling, including Monte Carlo simulations and wildfire models, Aisix conducted a comprehensive hazard, risk, and vulnerability assessment (HRVA). The pilot project underscored Aisix's capacity to support institutions in meeting evolving national climate risk standards while also highlighting their role in developing forward-looking risk management solutions. The company's recommendations included proactive measures like site-specific questionnaires to assess wildfire proximity and strategies for distributing loan exposure across different regions to lower risk concentrations.

"As the OSFI B-15 guidelines become a regulatory standard, this pilot project demonstrates Aisix's ability to support financial institutions in meeting these requirements," said Mihalis Belantis, CEO of Aisix Solutions, in the company news release.

Building on this pilot, Aisix plans to expand its climate risk assessment offerings to cover other climate hazards, such as flooding and severe weather events, positioning itself as a valuable partner for institutions aiming to safeguard their portfolios from climate-related financial risks.

Climate Risk and Digital Solutions

The climate risk digital solutions market has seen rapid growth and is projected to expand from around US$880 million in 2021 to over US$4 billion by 2027. According to Verdantix, this market was expected to grow at a rate of 30% annually. The upcoming SEC climate disclosure requirements in the U.S. are set to impact over 6,600 firms by 2025 and are anticipated to accelerate climate risk analysis for companies that have assessed financial exposures to extreme weather. Verdantix also pointed out that the rise in frequency and severity of climate events, coupled with increasing insurance premiums, had driven companies to invest in climate risk solutions to demonstrate insurability and manage asset-level vulnerabilities.

Presently, many consumer-facing sectors are also responding to these climate concerns. Skylar Olsen, chief economist at Zillow, observed in an October 10 Accuweather report that "climate risks [had] become a critical factor in home-buying decisions." A Zillow survey found that more than 80% of homebuyers took climate-related risks into account when shopping for a property. To support this demand, Zillow introduced a tool that evaluates risks from flooding, wildfire, wind, heat, and air quality for individual listings. This feature offered prospective buyers an assessment of current and future climate vulnerabilities, aiding real estate agents and clients in discussing insurance implications and long-term affordability.

Most recently, on October 29, ICE and Dun & Bradstreet announced a new climate risk data service designed to cater to both private and public companies worldwide. This partnership brought together ICE's climate modeling capabilities and extensive geospatial data with Dun & Bradstreet's comprehensive private company databases, creating a single source for assessing both physical and transition climate risks. ICE President of Fixed Income & Data Services, Chris Edmonds, described this collaboration as a "perfect example of two innovators working together to create products that meet the rapidly evolving needs of our customers, regulators, and investors." This new data service, integrated into ICE Climate, offered investors a streamlined resource to help quantify the financial impacts of extreme climate events across global entities.

What Is Driving Aisix Forward

As outlined in the company's Q4 2023 Investor Deck, Aisix Solutions continues to leverage its patented Climate AI technology and a team of seasoned professionals to pioneer solutions in the growing climate risk market.

With the global climate risk digital solutions market projected to increase from US$880 million in 2021 to over US$4 billion by 2027, Aisix's strategic position offers significant growth potential. The company's specialized Data as a Service (DaaS) and AI-driven platforms are designed to address critical gaps in climate risk assessment, appealing to a wide range of sectors, including insurance and real estate.

Ownership and Share Structure

As for the ownership of Aisix, two insiders hold 16.8% of the company. They are CEO and Director Belantis with 15.37% and Cofounder and Director David Poole with 1.43%.

Retail investors own the remaining shares as there are no institutional owners.

In terms of structure, Aisix has 96.96 million shares outstanding and 80.67 million free-float traded shares.

The firm's market cap is CA$3.409 million, and it trades in a 52-week range of CA$0.015 and CA$0.07 per share.