Another Property Database Adds Climate Change Risk to Its Analysis
Wildfire, flood, heat, storm and drought are now part of ATTOM’s rating system.
Property database ATTOM will start incorporating climate change in its ratings at the property level for five hazards—wildfire, flood, heat, storm and drought. It is one of a growing number of analytics providers that are adding climate change into their calculations. Moody’s REIS, for instance, announced last month it was making climate risk scores available on its analytics platform.
ATTOM will be assessing each property with a 0-100 rating for the five hazards, with projections going as far out as 2050—a period within the lifespan of a 30-year mortgage signed today. ATTOM’s climate change risk data will be updated quarterly.
“Understanding current and future climate change risk has become a very important data point for many of our customers in real estate, mortgage and insurance industries,” says Sean Mooney, vice president of product at ATTOM.
Customers can use ATTOM’s climate change risk solution to evaluate properties for investment decisions, assess risk for new product development, or to enrich a real estate portal with unique content.
Moody’s climate risk scoring methodology analyzes both current and future risk and follows the firm’s recent expansion into sub-sovereign climate risk scores introduced by Moody’s ESG Solutions.
Little Action So Far
As these firms add climate change risk to their platforms, they may well find an audience with only moderate interest in the data. For instance, developers in Miami—a city at great risk from climate change—are not yet integrating climate risk analysis into property assessments, according to Moody’s research.
From 2015 to 2019, the Miami metro saw the highest percentage of assets exposed to flooding, yet it added the most volume of new space to its inventory during this period.
“While these results tend to contradict the basic idea that risk should lead to lower development, more nuanced theory does support the potential for less impact to be realized in areas which have greater wealth and/or are amenity filled,” Moody’s notes.