As banks begin climate stress tests, SBS is ahead of the game.

In the build-up to COP26 in Glasgow, climate change is very much front of mind. As the world’s oldest building society, with 173 years of history behind us, it is important to ensure that we have a sustainable business for the next 173 years. We are delighted to partner with Ambiental, a world leader in the field. Their predictive technology, combined with expert analysis models the risk of different climate change scenarios on our £400million mortgage portfolio, whether from flooding or coastal erosion.

Paul Denton

Chief Executive of Scottish Building Society

Mr. Denton was speaking in the same week that the Bank of England announced that they will stress test large banks and insurers based on three climate change scenarios. 

Flood losses in Europe are expected to increase fivefold by 2050, according to the European Environment Agency.

Ambiental looked at every property on the Society’s books to build up a picture of current risks and then future risks over a 10-50 year timescale, based on different levels of carbon in the atmosphere and their impact on climate.

Justin Butler, CEO of Ambiental, said: “As the risk of flooding increases and the impact of flood events becomes more severe, organisations need new ways to see and manage their risks.

“SBS are well ahead of the curve in this respect. They now have an understanding of what the risk profile of their mortgage portfolio is today but also how that risk profile changes into the future, and that can help them to make adjustments if they need to, or to reflect upon different business decisions to support with a sustainable mortgage book growth over time.”

Ambiental’s FloodScore Climate is already being used for stress testing and ESG compliance in the financial sector, as well as long-term financing, asset management, property investment and insurance risk underwriting. Stress tests are an important tool here, as they can help to identify the materiality of specific climate risks, such as flooding, the impacts from which can be significant to banks and their customers in the short, medium and long term.

Scottish Building Society this year announced it is partnering with Trees for Life on their mission to rewild the Scottish Highlands and support its rich and diverse wildlife.

The Society is helping mitigate its own carbon footprint by supporting the charity’s pioneering conservation work on the Caledonian Forest.

Mr. Denton said: “As Scotland’s building society we understand our responsibilities as a corporate citizen to reduce our carbon footprint. This ranges from looking at the ways we can limit the impact we have on the environment, to launching products to help customers make their homes and properties more energy efficient and sustainable. “

Climate risk data for the financial sector 

Understand which properties are at risk of flood in Europe, now and in the future 

Our unique approach means that future risks can be quantified for any given year or across any required timeframe. This important innovation means that financial institutions can consider each risk based on the exact duration of an investment, mortgage or insurance policy.


Want to assess flood and climate risk in a quick, easy and accurate way?