T. Rowe Price Adopted Climate Models to Manage Risks
The firm is using new climate analytics to protect its $165 billion portfolio from El Nino-related economic volatility.
Updated on Sept. 27, 2026 in Investing
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T. Rowe Price has implemented sophisticated climate analytics to manage risks for its $165 billion emerging-market portfolio. These tools assess how weather phenomena like El Nino affect key agricultural production and economic stability in emerging nations.
Why it matters
By integrating climate data with standard econometric models, the firm seeks to shield assets from potential losses caused by severe weather patterns. This approach aims to help investors navigate risks that can threaten the stability of emerging-market debt and equities.
T. Rowe Price manages $165 billion in emerging-market assets out of a total $1.9 trillion portfolio. Researchers have provided impact estimates covering 12 different emerging-market economies across Latin America, Africa, and South Asia.
The players
T. Rowe Price
An investment management firm that provides mutual funds and retirement accounts to individual and institutional investors.
Johns Hopkins University
A research institution that developed the climate analytics suite for tracking economic risk.
Moreton Capital Partners
A firm that focuses on specialized investment funds targeting weather-related market volatility.
Robeco
An asset management firm planning to implement new sustainability-linked adaptation scores for indices.
The details
The investment manager uses global vector auto-regressive (GVAR) models combined with sea surface temperature analyses to monitor climate-sensitive regions. This data is integrated into existing investment strategies, allowing managers to better estimate how crop damage or supply shifts in places like Honduras and El Salvador might impact bond or equity holdings. These tools also inform climate-resilience clauses in lending agreements for small island nations.
Timeline
Two years ago, Johns Hopkins University began developing the analytics tools.
The El Nino weather phenomenon began forming in May 2026.
Moreton Capital Partners targeted $500 million for El Nino-linked bets in June 2026.
A super El Nino event is expected to occur in late 2026.
Robeco plans to introduce internal adaptation scores by the end of 2026.
Money Landscape
This development reflects the growing trend of institutional investors integrating climate-risk analytics into sovereign debt analysis. It highlights how weather cycles, such as the El Nino phenomenon, are increasingly treated as material economic indicators for global investment portfolios.
While these tools are institutional, they illustrate why it is vital to discuss climate-related volatility with a financial professional if you hold emerging-market funds. Investors should periodically review their exposure to regions prone to climate-linked economic shocks.
The takeaway
Large asset managers are increasingly using climate models to protect portfolios from weather-driven economic instability. If your investment strategy includes international holdings, verify your exposure to volatile regions with a qualified financial professional.
What happens next
Robeco is scheduled to release its internal climate adaptation scores for MSCI All Country World Index members by the end of 2026.
Further reading
For broader insights on managing risk in diverse portfolios, see our guide to Investing.
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