Industry-first flood risk solution signals a major change for UK businesses
Flood is currently one of the major threats to homes and businesses with nearly 1 in 3 commercial properties in the UK at risk from flooding and 75% of UK businesses not having a business continuity plan that includes climate risk.
Climate change risk experts, D-Risk and CLS Data have taken action to support commercial property with the launch of a new product D-Risk FloodBI.™ It offers an industry first, ground-breaking solution which identifies the potential risks to both the lender and borrower from the destructive chain of events that follow a flood.
Poor business resilience increases the threat of disruption to operations and supply chains, creating infrastructure instability which can result in loss of productivity and lost revenue, placing businesses, employees, and communities in a distressed position.
Using advanced data analysis from D-Risk and market-leading data from CLS Data, D-Risk FloodBI™ provides quick and reliable flood Business Impact Scores. It supports climate change business strategies, helping lenders and borrowers work together to understand how resilient a property and its assets are to a potential flood event ranging from ‘exceptional’ through to ‘very poor’. Identifying this rating enhances the relationship between lenders and businesses to understand the potential risk and how to mitigate it. It also helps lenders to meet Prudential Regulation Authority (PRA) regulations to test the resilience of their loan books to climate change and identify future threats to that business, its property value and future saleability.
Andrew Pullman, managing director at D-Risk explains: “This is a very exciting time for D-Risk and CLS Data, and we are talking to a number of lenders to deliver this innovative product that offers real insight and value to loan book. Flooding is now a common occurrence in the UK and has serious ramifications for property values, mortgage markets and impacting on business interruption. The UK Climate Risk Independent Assessment highlights that SMEs are not doing enough to reduce the risks, including those from low-likelihood, high-impact events and the related indirect risks and interdependencies.
As climate risk specialists we understand the bigger picture and are keen to modernise the approach to flood risk by raising the awareness of the risks of climate change. We know each business has unique physical and operational challenges when faced with flood risk and the damaging consequences on lenders, businesses, employees, and the surrounding communities. D-Risk FloodBI™ can be applied to any UK business premises using information relating to the premises location and the nature of business activities derived from the Standard Industrial Classification of Economic Activities, along with flood hazard data.”