Credit rating agency DBRS Morningstar has announced that it has selected Morningstar Sustainalytics as a provider for property-level climate hazard risk data.
According to the announcement, DBRS Morningstar analytical teams will consider Morningstar Sustainalytics global data on physical risks that are related to climate hazards, which includes different time horizons, as well as climate change pathways, in its research and commentary across all asset classes.
Christian Aufsatz, head of European structured finance at DBRS Morningstar, said: “Physical climate risk data is becoming increasingly crucial to provide a comprehensive analysis, especially in sectors closely linked to property and casualty, such as insurance, and residential and commercial mortgage-backed securities.
“Through DBRS Morningstar research, we aim to arm issuers, investors, and other market participants with informed opinions as they navigate these risks in a credit environment.”
Azadeh Sabour, senior vice president, climate solutions at Morningstar Sustainalytics, added: “With the frequency and intensity of climate-related hazards like flooding, extreme heat, and wildfires increasing globally, it becomes critical for banks, insurers, and investors to consider financial resiliency related to physical climate risks.
“The metrics for measuring climate hazards enable stakeholders affected by impacts on real estate assets to identify and manage asset exposure and improve risk management.”
Morningstar Sustainalytics, offers a vast variety of climate solutions to provide insights for identifying, assessing, and managing climate-related investment risks and opportunities.
The company’s dataset measuring climate hazard risk for properties can help users measure potential financial impacts of a real estate asset’s direct exposure to physical climate risks by projecting expected damages.
