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  "documentTitle": "Sustainability Risk Under Solvency II",
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  "notes": "The slide outlines the methodology for selecting KPIs and sector classification for climate stress testing.",
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      "text": "Example 2: A different energy mix imposed by the regulator results in a redistribution of energy market shares and possible stranded assets.",
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      "text": "Example 1: An instantaneous shock on CO2-prices leads to a shock on profitability due to an increased cost basis.",
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      "text": "A practical distinction by sectors is provided by the Climate Policy Relevant Sectors (CPRS).",
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      "text": "A practical distinction by sectors is provided by the Climate Policy Relevant Sectors (CPRS). CPRS are regrouped from NACE 4 digits with respect to their GHG emissions, allowing for a better assessment of policy impacts.",
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      "text": "The KPIs can be selected at different levels of regional as well as sectorial granularity, depending on relevant portfolio exposure. Shocks on economic KPIs are determined based on the scenario variables from the previous step.",
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      "text": "Economic KPIs are selected with respect to relevant portfolio exposure and the revaluation framework in Step 2. Examples for valuation-relevant KPIs are GDP, profitability, asset returns, market shares or future growth prospects.",
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      "text": "Although the different LIMITS IAMs may differ in regional granularity, the LIMITS project has defined 10+1 “super regions” which should provide a sufficient regional distinction for most use cases.",
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      "text": "1. https://tntcat.iiasa.ac.at/LIMITSDB/dsd?Action=htmlpage&page=about#regiondefs\n2. Battiston et. al, A climate stress-test of the financial system (2016)",
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