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Department of Finance Prof. Dr. Stefano Battiston

Climate Policy Relevant Sectors

The Climate Policy Relevant Sectors (CPRS) is a classification of economic activities to assess climate transition risk, first developed in the article by Battiston et al. (2017) published on Nature Climate Change. The CPRS classification, which has been refined over the years, has been widely used by practitioners and policy makers to assess investors’ exposure to climate transition risk (see References). More details on the classification in this page.


Updated on Sept 19, 2022.

New! CPRS Granular enable also to map NACE codes into the IAM variables used in the NGFS climate scenarios.

Request the CPRS classification with the mapping NACE-CPRS-NGFS

Download the technical note "The NACE – CPRS – IAM mapping" 

The Network for Greening the Financial Sector (NGFS) recommends financial institutions to use their scenarios to assess climate transition risk in portfolios of financial investments. This requires a mapping of financial investments into the variables provided in the NGFS scenarios. Such a mapping can be done by means of the CPRS, as described in Battiston et al. (2022), “The NACE – CPRS – IAM mapping: A tool to  support climate risk analysis of financial portfolio using NGFS scenarios”, technical note, available on SSRN.



The mitigation of climate change in line with the Paris Agreement implies a very substantial reduction of Greenhouse Gas (GHG) emissions and thus a transition to a low-carbon economy. The physics of climate change puts a hard constraint on the timing of such a transition: it cannot take place later than 2040-2050 (see IPCC AR6, exact abatement schedule depends on details of the scenarios).

Climate transition risk is the risk that arises if during the transition to a low-carbon economy there are adjustments on financial asset values that investors do not fully anticipate or hedge against. There are several reasons why this can be the case (see Monasterolo 2020) as recognised by financial authorities around the world. This can be the case for instance, if the transition is late-and-sudden (ESRB 2016) and thus "disorderly" (NGFS 2019).

In order to assess transition risk it is key to use a classification of economic activities that is replicable and comparable across portfolios and jurisdictions. CPRS offer a solution to this challenge. CPRS enable to extend and go beyond the notion of "carbon stranded assets" (often limited to losses directly related to fossil fuel extraction), which lacks a precise definition in terms of sectors codes. CPRS are also fully compatible with the EU Taxonomy of sustainable activities. 

CPRS provide a standardized and actionable classification of activities (at the NACE Rev2, 4-digit level) whose revenues could be affected positively or negatively in a disorderly low-carbon transition, based on their energy technology (e.g. based on fossil fuel or renewable energy). For this reason, the CPRS classification is regarded as a reference for climate financial risk assessment and has been used by several international financial institutions to assess investors’ exposure to climate transition risk (see below). 

CPRS are identified considering: i) role in the energy value chain (technology), ii) role in the GHG emissions chain, iii) specific policy processes and iv) business model (input substitutability of fossil fuel).

CPRS granularity levels:

  • CPRS Main: 9 categories of economic activities in which the 1000+ NACE codes (2,3,4 digits) are grouped, including 1-fossil-fuel, 2-utility, 3-energy intensive, 4-buildings, 5-transportation, 6-agriculture.
  • CPRS2: 30+ categories of economic activities enabling to discriminate low and high carbon subsectors within the limits of the granularity of NACE codes.
  • CPRS Granular: 100+ categories enabling to discriminate low and high carbon beyond the granularity of NACE codes.


CPRS sector

NACE codes



05, 06, 08.92, 09.10, 19, 35.2, 46.71, 47.3, 49.5  


35.11, 35.12, 35.13  


07.1, 07.29, 08.9, 08.93, 08.99, 10.2, 10.41, 10.62, 10.81, 10.86, 11.01, 11.02, 11.04, 11.06, 13, 14, 15, 16.29, 17.11, 17.12, 17.24, 20.12, 20.13, 20.14, 20.15, 20.16, 20.17, 20.2, 20.42, 20.53, 20.59, 20.6, 21, 22.1, 23.1, 23.2, 23.3, 23.4, 23.5, 23.7, 23.91, 24.1, 24.2, 24.31, 24.4, 24.51, 24.53, 25.4, 25.7, 25.94, 25.99, 26, 27, 28, 32  


23.6, 41.1, 41.2, 43.3, 43.9, 55, 68, 71.1  


29, 30, 33.15, 33.16, 33.17, 42.1, 45, 49.1, 49.2, 49.3, 49.4, 50, 51, 52, 53, 77.1, 77.35  
6-agriculture 01, 02, 03  

Table. The table illustrate selected NACE codes for the first 6 categories of CPRS Main. Note that where a 2-digits (or 3-digits) NACE code is indicated, this means that all the 4-digits NACE codes contained in that code are mapped into the same CPRS.


Reports of policy makers using CPRS 

•    The European Central Bank (ECB) reported in its Financial Stability Report of May 2019 a special feature on climate change and financial stability with some preliminary estimates of aggregate exposures of financial institutions to CPRS relative to their total debt securities holdings, as ranging between 1% for banks to about 9% for investment funds (ECB, 2019). 
•    ECB/ESRB Project Team Report onClimate relared risk and financial stability of 2021 (pag. 24) carried out an analysis of bank loan exposures to climate policy-relevant sectors.
•    The European Insurance and Occupational Pensions Authority (EIOPA)2019 Financial Stability Report analyses aggregate exposures to CPRS of EU insurance companies at about 13% of their total securities holdings. 

•    EIOPA 2020 report “Sensitivity analysis of climate-change related transition risk” carries out an analysis of transition risk on sovereign bonds based on CPRS and climate stress-testing method by Battiston ea. 2017 
•    European Banking Authority (EBA) report Risk Assessment of European Banking System, December 2020, (pag. 28-29) used the CPRS methodology to analyse the transition risk of a universe of 2.4 trillion euros of loans of EU banks. 
•    European Banking Authority (EBA) report (EBA/Rep/2021/11) of May 2021 “Mapping climate risk: Main findings from the EU-wide pilot exercise” carried out an analysis of banks’ loans exposure to CPRS (pag. 51). 

•    The Swiss Financial Authority FINMA published in its2021 annual report carried out in 2021 an assessment of climate-related financial risk in the Swiss banking system in collaboration with UZH, based on the methodology of Battiston ea. 2017. 


Joint works with financial supervisors on climate transition risk that use CPRS

Battiston, S., Guth, M., Monasterolo, I., Neudorfer, B., & Pointner, W. (2020). Austrian banks’ exposure to climate-related transition risk. Austrian National Bank Financial Stability Report, 40, 31–44.
Battiston, S., Jakubic, P., Monasterolo, I., & van Ruijven, B. (2019). Climate Risk Assessment of Sovereign Bonds’ Portfolio of European Insurers. EIOPA Financial Stability Review. 

Monasterolo, I., & Battiston, S. (2020). Assessing Forward-Looking Climate Risks in Financial Portfolios: A Science-Based Approach for Investors and Supervisors. In: NGFS Occasional Paper. Case Studies of Environmental Risk Analysis Methodologies, 52–72.

Battiston, S., Mandel, A., Monasterolo, I., Schütze, F., & Visentin, G. (2017). A Climate stress-test of the financial system. Nature Climate Change, 7(4), 283–288.

Battiston, S., Monasterolo, I., van Ruijven, B., & Krey, V. (2022). The NACE – CPRS – IAM mapping: A tool to support climate risk analysis of financial portfolio using NGFS scenarios. Available at SSRN #4223606.

Monasterolo, I. (2020). Climate change and the financial system. Annual Review of Resource Economics 12, 299-320.

NGFS (2019). Network for Greening the Financial System. First comprehensive report. A call for action. Climate change as a source of financial risk. 

ESRB (2016). European Systemic Risk Board. Too late, too sudden: Transition to a low-carbon economy and systemic risk. ASC Report n.6.