Dec 5, 2022 - Energy & Environment

First look: ClimateCheck inks deal with Black Knight for climate risk analytics

An illustration of a crane pulling a drowning house out of floodwaters

Illustration: Lazaro Gamio/Axios

ClimateCheck, which provides climate risk data to the private sector and the public, has struck a partnership with Black Knight Inc., a mortgage technology and data company, the firm first told Axios.

Why it matters: The agreement, which is for an undisclosed sum, is part of a surge of deals in economic sectors that are vulnerable to exposure to climate hazards, such as real estate and insurance.

Driving the news: The incorporation of physical climate risk information into Black Knight's platform comes amid a push for disclosure from investors and regulators, including the SEC.

  • “Our offering with Black Knight is a crucial tool to help lender risk management and [is] becoming even more important with the evolving regulatory environment from SEC and others,” said ClimateCheck CEO Cal Inman, told Axios via email.

Zoom in: ClimateCheck is one of many providers of climate risk data, joining firms like 427, Jupiter Intelligence, Moody's and others.

  • The surge in data deals in the past two years, along with consolidation among climate risk firms, demonstrates the interest in protecting economic sectors from climate change impacts, such as extreme weather events and sea level rise.
  • "Black Knight is the leading mortgage data platform that lenders are already using as part of their workflow," Inman told Axios via email. "Lenders now have instant access to the best, most transparent climate risk data. They can just push a button and add climate risk insights to their data feed."

Between the lines: ClimateCheck provides climate change risk scores based on more than 50 climate simulations from peer-reviewed sources. Risks include heat, storm, fire, drought and flood hazards down to the property level.

  • Through this partnership, Black Knight, which Intercontinental Exchange acquired for $13.1 billion in early May, will provide mortgage lenders, servicers and investors with the ability to understand how different potential climate risks will affect default rates and property valuation.

Yes, but: ClimateCheck's products are based on publicly available models from government agencies, research institutions and the UN Intergovernmental Panel on Climate Change.

  • The company says it works to make this model output, which may be applicable at larger scales, meaningful for property-level risk analysis. But this process can introduce greater uncertainties.
  • It is an approach that differs from other players in this space, such as Jupiter Intelligence, and the nonprofit First Street Foundation. These larger organizations have invested more resources to develop bespoke — and in some cases peer-reviewed — models for property-level hazards, such as heat waves, inland and coastal flooding and sea level rise.

What they're saying: "With each passing year, it becomes more apparent that we've entered an age of increasingly large, destructive and frequent climate-driven events," said Ben Graboske, president of Black Knight Data and Analytics, in a statement.

Go deeper