On January 11, China's first financial meteorological AI model MeteoBiz-Stocks (MBS) was released. Jointly developed by Fudan University and the National Meteorological Information Centre, MBS aims to explore the role of meteorological factors in financial asset pricing and provide an innovative tool for risk management and investment decision-making.

Against the backdrop of global climate change and the in-depth implementation of China's dual carbon strategy, new energy industries such as wind power and photovoltaic power are increasingly affected by meteorological factors, making meteorological elements indispensable production factors for some emerging industries.

According to ZHAO Yanxia, lead creator of MBS and Distinguished Researcher at Fudan University's Institute of Atmospheric Sciences, MBS is based on global meteorological reanalysis data and stock volume-price data, enabling the prediction of short-term returns for the majority of stocks in the A-share market. Model verification shows that its identification results of industries are highly sensitive to meteorology—including new energy industries such as wind and photovoltaic power generation, traditional petrochemical industry, construction industry, and agriculture — which align with general market perceptions.

In addition, the investment strategy constructed based on test and inference results has demonstrated sustained and stable positive returns in multiple time periods in historical backtesting, initially proving the effectiveness and application potential of meteorological factors in the A-share market.

Besides, listed companies in meteorologically highly sensitive industries can rely on its predictions for climate risk management and market value maintenance; financial institutions such as banks and insurance companies can apply it to risk control of equity pledge businesses and explore innovative business models such as climate investment and financing; investors can use it as an auxiliary tool for quantitative investment; the academic community can also test and improve theories related to asset pricing through the model's outputs.

MBS model provides new science-based support and solutions for addressing climate-related financial risks and promoting the innovative development of green finance.

Author: ZHANG Yibo

Editor: LIU Shuqiao