The impacts of climate change on real estate lending and investment portfolios

Vivid Economics led a consortium working with ClimateWise, a UK-based insurance industry body focused on climate change, to explore how the tools and metrics used by the insurance industry could help investors and lenders better understand their exposure to the physical risks of climate change. The work involving estimate the financial losses that a selection of real-world portfolios of real estate and infrastructure assets might face from future flood and storm risk, by adapting natural catastrophe models to take account of the expected impacts of climate change. The work also explored the role that adaptation could play in reducing these losses. The work has particular salience in light of the Taskforce for Climate-related Financial Disclosures recommendations that companies and financial institutions disclose more information on their exposure to these risks.

Date: February 2019

Client

ClimateWise

Sectors:

Finance

Capabilities:

Climate & Disaster Resilience

Regions:

UK