Searches User Guide: ClimateIndex (reports produced from 27/06/2024)
ClimateIndex physical risks
The ClimateIndex™ analysis module is designed to provide environmental due diligence advice on how climate change might change the likelihood and/or severity of physical environmental risk to a property. It helps fulfil the legal obligations for conveyancers for the consideration of climate change risks and provide banks and their valuation networks with potential indicators of future value risk. It considers the following hazards:
- River flooding
- Flooding from the sea and tidal waters
- Surface water flooding
- Ground stability (from shrink-swell clay subsidence hazards)
- Coastal erosion
Present day risk assessments for flooding (including river/coastal, surface water, groundwater and historical flooding) and shrink-swell clays are also taken into consideration in the calculation. This data is used to provide a baseline assessment, before providing a view on how they might change in the future (i.e. a climate signal). Hazards are assessed using a weighted sum model, which allows for the consistent comparison of hazards between different time periods, emissions scenarios and the relative severity of predicted impacts. It provides a property specific rating from A to F, with A being ‘negligible’ risk predicted to F being high risk.
The analysis is provided for the short term (c.5 years) and medium term (c.30 years), which comply with banking industry taxonomy, meets Bank of England/PRA reporting requirements and fulfils the duration of most mortgages and also typical maximum lifetime of property ownership.
In order to forecast how climate change can contribute to a changing climate, Representative Concentration Pathways (RCPs) are used which show how warm the planet is forecasted to get by in the future, based on different emission scenarios. RCPs were introduced in the Intergovernmental Panel on Climate Change (IPCC)’s 5th assessment report and were adopted in the UK as the Climate Projections 2018 (UKCP18).
Climate change is forecast to worsen across all modelled RCPs, and our approach provides a higher weight to risk that modelled to present even in best case conditions.
Firstly, we need to be clear about what each of these RCPs mean to property - RCP8.5 is the worst case scenario, requiring greenhouse gases emissions to roughly double by 2050. Our judgement is that, based on current trends and proposed implementation of policies to reduce emissions, this is less likely and so is given the lowest weighting.
The weighted scoring therefore increases based on RCP4.5 and then further in RCP2.6 climate scenarios. We apply the greatest weighting to RCP2.6 as we believe that if a property becomes at risk due changes to the climate in this scenario, those risks are most likely to impact the property in the future.
The ClimateIndexTM rating applied to a property reflects its current and future risk from the hazards identified above. If a property's rating does not change between the short and medium term the property's risk profile is not considered likely to be affected by climate change, though risks may still be present. Any increase in the rating of a property indicates that the property has the potential to be affected further by climate change.
A detailed summary of the ClimateIndexTM rating is provided in the report, where we will inform you of the specific physical risks that are driving the overall score. This list of risks is also in priority order so that the risks with the highest impact are at the top.
River Flooding & Coastal Flooding, Surface Water Flooding and 'Flooding'
The data provides flood risk information from river/coastal (this includes tidal influenced waters) and surface water flooding for a range of future time periods and emissions scenarios (Low emissions - RCP 2.6, medium and most likely emissions - RCP 4.5, and high emission - RCP 8.5).
The models are based on the UK Climate Projections 2018 (UKCP18). It is plausible that climate change will increase the severity and frequency of flood events in the future across all RCP scenarios.
The ClimateIndexTM calculation takes into consideration the current, more thorough flood risk assessment in combination with those datasets that have modelled future flood risk from river, coastal and surface water flooding. It is not possible to consider a forward projection (i.e. climate signal) for some aspects of our present day flood risk assessment but the associated risk today would remain representative in the future. As such these are reflected in the ClimateIndex calculation to provide better overall assessment of the potential flood risk in 5 years and 30 years. These factors are shown in the physical risk summary simply as “Flooding”.
Data update schedule: Annually
Ground Stability - shrink-swell clay subsidence hazard
Shrink swell subsidence needs one crucial factor to be present, in order for the risk to even exist. That is the presence of clays within the soils and underlying geology. The presence of certain clays can mean that in times of wetter weather, excess water can be absorbed into the clays causing them to swell and expand, this can cause upwards movement or heave within the ground which in some cases, may cause potential ground stability issues.
In dryer, hotter weather, the natural level of moisture within these clays can reduce as the ground dries out. This can cause the clays to shrink and contract which may lead to downwards movement known as subsidence. With a possibility of also directly impacting structural integrity of buildings and land.
Should we continue to experience an increase of hotter and therefore dryer weather, we could potentially see an increase in the shrink swell subsidence, more so than if rainfall remained in a more average, stable state.
The ClimateIndexTM calculation takes into consideration the current risk assessment related to this hazard as well as the BGS Geoclimate Premium UKCP18 shrink–swell national datasets that show the potential changes in subsidence risk to building foundations due to climate change.
They have been developed by combining long-term UK Climate Projection (UKCP) scenarios for rainfall and temperature changes with the geotechnical properties of the ground, to identify areas projected to experience the largest increases in susceptibility to subsidence in the future.
Classifications used:
| Classification | Explanatory text |
| Highly Unlikely | It is highly unlikely that foundations will be affected by increased clay shrink-swell due to climate change. |
| Unlikely | It is unlikely that foundations will be affected by increased clay shrink-swell due to climate change. |
| Likely | It is likely that foundations will be affected by increased clay shrink-swell due to climate change. |
| Highly Likely | It is highly likely that foundations will be affected by increased clay shrink-swell due to climate change. |
| Extremely Likely | It is extremely likely that foundations will be affected by increased clay shrink-swell due to climate change. |
The classifications do not equate to a percentage likelihood of occurrence as the classes combine a range of soil moisture deficits and propensities to change volume, and therefore cannot be categorised in this way. They are qualitative subjective expert assessments based on quantitative results.
Data update schedule: Quarterly
Coastal Erosion
Defined as the loss or displacement of land, or the long-term removal of sediment and rocks along the coastline due to the action of waves, currents, tides, wind-driven water, waterborne ice, or other impacts of storms.
We use data based on the National Coastal Erosion Risk Mapping (NCERM). This data shows potential erosion extents from the coastal baseline for the below time periods and degrees of likelihood. E.g. “There is a 95% chance the property will be impacted by coastal erosion in the short term”. The 3 degrees of likelihood are shown for each time period.
Time periods
0 - 20 years (short term)
20 - 50 years ( medium term)
50 - 100 (long term)
Degrees of likelihood
5%
50%
95%
Whilst coastal erosion is expected to be exacerbated by climate change through increased storms and sea level rise, the existing data offering from the Environment Agency does not consider different scenarios. Our pragmatic approach has been to use the likelihoods given, and have been used as a proxy for different climate scenarios.
Climate change is expected to cause more frequent and extreme erosion events over time. Buying a property in close proximity to a vulnerable coastal area may have a significant impact on the availability of both a mortgage and insurance for the property. In worst case scenarios the property may even become uninhabitable in the near future.
Further information on sea defences and maintenance may be available in the relevant Shoreline Management Plan (SMP).
Consideration of how coastal erosion could impact the essential infrastructure in proximity to the property (roads, paths, utilities etc) should also be considered as this in turn could restrict access and full use of the property.
Further information on sea defences and maintenance may be available in the relevant Shoreline Management Plan (SMP).
Consideration of how coastal erosion could impact the essential infrastructure in proximity to the property (roads, paths, utilities etc) should also be considered as this in turn could restrict access and full use of the property.
Data source: Environment Agency & Natural Resources Wales
Data update schedule: Quarterly
EPCs
An Energy Performance Certificate (EPC) contains information about a property's energy use and typical energy costs, alongside any recommendations to improve a buildings performance if included. EPCs are rated from A (most efficient) (A+ for non-domestic) to G (least efficient) EPC's are valid for 10 years or until a newer EPC is produced.
EPCs are a legal requirement when a property is built, sold or rented (some exceptions do apply).
Further information is available here for domestic properties and here for non-domestic.
Data update schedule: Monthly