Quarterly Mark December 2023 - 18

EXHIBIT 8
Three Examples of NLP Application to Climate-Related Impact Investing
Panel A: Climate Annotation
Climate-Related Classification: Statement
ExxonMobil is an American multinational oil and gas company and is one of the biggest contributors
to global greenhouse gas emissions in the world.
Risk managers need a wide range of risk measures to create a comprehensive picture of risk across
their portfolios.
Annotation
Yes
No
The task is to classify if the statement is climate-related. NLP models can be used for such classification and obtain climate-related
documents and statements for the companies. ClimateBERT obtained an F1 score of 98% on the climate annotation task. For dataset
information, refer to Webersinke et al. (2021) and Diggelmann et al. (2020).
Panel B: Climate Sentiment Annotation
Climate Risk Classification: Statement
American National Insurance Company recognizes that increased claims activity resulting from catastrophic
events and climate change may also affect the affordability and availability of property and casualty
insurance and the pricing for such products.
A similar approach could be used for allocating emissions in the fossil fuel electricity supply chain between
coal miners, transporters, and generators.
Annotation
Risk
Neutral
Given a climate-related statement, the aim is to classify if the sentiment of the statement is risk, neutral, or opportunistic in climaterelated
context. ClimateBERT obtained an F1 score of 83% on the preceding task. For dataset information, refer to Webersinke et al.
(2021) and Diggelmann et al. (2020).
Panel C: Fact Checking
Claim
97% consensus on human-caused global
warming has been disproven.
Global warming is driving polar bears
toward extinction.
Evidence
In a 2019 CBS poll, 64% of the US population said that climate
change is a " crisis " or a " serious problem, " with 44% saying
human activity was a significant contributor.
Environmental impacts include the extinction or relocation of
many species as their ecosystems change.
Annotation
Refute
Support
NOTES: The aim is to classify if the evidence supports or refutes the claim. It can be used for detecting greenwashing for the claims made
by companies. ClimateBERT obtained an F1 score of 75% on the preceding task (for dataset information, refer to Webersinke et al. 2021).
SOURCE: Climate-Fever Dataset (Diggelmann et al. 2020).
Asset Management
Asset management in finance refers to the professional management of a
portfolio of financial assets, such as stocks, bonds, commodities, and real estate.
The goal of asset management is to maximize returns and minimize risk for clients,
typically by creating and executing investment strategies that are tailored to their
specific financial goals and risk tolerance. This typically involves analyzing financial
data and market trends, making informed investment decisions, and continuously
monitoring and adjusting the portfolio as market conditions change.
NLP has already been used in asset management for various tasks such as
sentiment analysis, news analysis, and earnings call analysis. NLP models are
used to process and analyze vast amounts of textual data and extract meaningful
information to make investment decisions. Sentiment analysis in asset management
involves analyzing the tone and emotion of financial news articles and social media
posts to predict stock market trends. News analysis involves using NLP to extract
18 | From ELIZA to ChatGPT: The Evolution of Natural Language Processing and Financial Applications

Quarterly Mark December 2023

Table of Contents for the Digital Edition of Quarterly Mark December 2023