Flood risk resilience

“2020 was one of the warmest years on record is and yet another stark reminder of the relentless pace of climate change ” – Antonio Guterres, the UN’s Secretary-General

It is becoming more apparent that climate change is intensifying the rise of extreme weather events. Recent bad weather hitting the UK is evidence of this, with heavy rain and flooding battering the UK in the wake of Storm Christoph last week.

Last year was among the three hottest on record, according to data from the UN’s World Meteorological Organization with wildfires burning across Australia, Brazil, Russia, and the US at unprecedented rates. Antonio Guterres, the UN’s secretary-general, said in a statement:

“The confirmation by the World Meteorological Organization that 2020 was one of the warmest years on record is yet another stark reminder of the relentless pace of climate change, which is destroying lives and livelihoods across our planet. Making peace with nature is the defining task of the 21st century. It must be the top priority for everyone, everywhere.”

UNEP has called for investment in climate adaptation through green economic recovery packages, calling it “a sound economic decision”. More action is needed to protect against droughts, floods, and sea-level rises whether this includes traditional defences, temporary barriers, building restoration, drainage, effective flood warnings, actions plans or emergency response, communities must act to ensure they are prepared. Here in the UK the recent weather fluctuations have highlighted once again our need to be resilient against flood risk.  

Flood risk also affects the mortgage security of a property.

Flood risk also affects the mortgage security of a property. All too often the consideration of environmental risks on property is limited and only takes place after the mortgage offer has been issued, through the conveyancing process. It is now recognised that this needs to change, to build a platform to collect data, for future decisioning and the ability to manage climate risk. This includes ensuring they have mature systems and become more sophisticated in their risk management approaches, perhaps increasing data granularity, adoption of new metrics and integration of origination and valuation systems which help them to monitor risk.

Physical risks are on the increase as the changing weather impacts on homes and businesses. If organisations fail to implement risk assessment strategies this can lead to financial losses and sudden adjustments in asset values. We understand that risk needs to be addressed at an early stage of the lending process and sound underwriting at loan origination is an important part of the solution.

Talk to us to find out more.

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