InCol Intelligence© delivers Climate-Related Risk Management | Decision Making | Reporting
InCol Intelligence© uses client proprietary data, captured through the Bank of England and ECB reporting templates, and combines this seamlessly with external datasets to provide for the rapid and reliable identification, evaluation, monitoring, and reporting of risk for a mortgage business, specific mortgage portfolios or even at the individual property level.
InCol Intelligence© combines proprietary mortgage portfolio data with Flood, Climate Intelligence and Energy Performance Certificate data and analytics to deliver comprehensive risk management, decision-making and reporting outputs.
Physical risks resulting from climate change can be acute (driven by events such as flooding or storms) or chronic (arising from longer-term shifts in climate patterns), each presenting increasing financial risks. The flood and climate risk data provide a present-day physical risk profile for existing mortgage exposures and provide simulations and insight into the probable future impacts under different climate scenarios. This allows for climate risk-informed decisions and mitigation strategies to be conducted.
InCol Intelligence© enables users to quantify the financial impact of climate change at the asset and portfolio level to enable meaningful risk management, decision-making and reporting.
Climate Intelligence Data
The Climate Intelligence data provides comprehensive climate data encompassing Pluvial (‘rainfall’), Fluvial (‘river’), and Tidal (‘sea level’) events. These models comprise future weather simulations, stochastically generating predictions under future climate scenarios.
These climate scenarios are based on the internationally recognised Representation Climate Pathways (RCP). They are designed to model climate scenarios to predict how concentrations of greenhouse gases in the atmosphere will change based on assumptions about the economic, social and physical changes to the environment and their impact on climate change.
There are three RCP pathways detailed within the platform as follows:
- RCP 2.6 (‘low emissions’)
- RCP 6.0 (‘medium emissions’)
- RCP 8.5 (‘high emissions’)
InCol Intelligence© integrates the projections under RCP pathways 2.6, 6.0 and 8.5 with the relevant proprietary mortgage data.
Energy Performance Certificate (EPC) Data
EPC ratings are important in the context of ESG and Sustainability. They are a key indicator of the current and future risk, condition, and value of a property. EPC ratings provide carbon output and energy usage data at the property level.
The Domestic Minimum Energy Efficiency Standard (MEES) Regulations are a crucial part of the UK’s strategy to improve the energy efficiency of rented properties and reduce carbon emissions in the domestic sector. Under the MEES Regulations, privately rented domestic properties must have a minimum Energy Performance Certificate (EPC) rating of E (ratings run from A to G).
These standards are set to become stricter in the future. Buy-to-let mortgage providers must consider these regulations carefully in their lending criteria, risk assessments, and product offerings. Adapting to these changes helps manage risks and presents an opportunity to support the transition towards a more energy-efficient housing market in the UK.
Property-Level Flood Data
The platform’s Flood data provides granular property-level physical risk ratings at various statistical return periods. This helps the risk management team to identify individual properties that are subject to present day physical risks. A detailed view of present-day and future flood hazards supports decision-making and preparedness for future climate impacts.