Climate risk analysis for property finance using net-zero scenario modelling

The Challenge

Property investors and landlords face mounting Net Zero obligations — tightening energy-efficiency standards, decarbonisation targets and climate-related financial disclosure — but their financial decision-making tools rarely connect building-level asset data with the finance and accounting picture. Without that link, a landlord cannot see which improvements to which properties best meet obligations at least cost, and climate risk stays invisible in investment decisions.

The Solution

FRACE (Financial Risk Analysis for Climate and the Environment) embeds climate and environmental risk analysis directly into financial decision-making. NquiringMinds built a model combining property asset details with finance accounting information, allowing the implications of different Net Zero scenarios to be investigated so landlords can optimise improvements to meet their obligations. The work was delivered in collaboration with the University of Southampton, contributing to the wider national effort to make climate and environmental risk analytics usable in resilient finance.

Outcomes

The three-month first phase delivered the asset–finance scenario model, and FRACE was recognised by the UK Centre for Greening Finance and Investment under its Public Sector Investment theme — evidence that connecting building-level environmental data to the accounting ledger makes climate risk visible where property investment decisions are actually made.