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Reduce climate change business risks

Climate change risk management

The summer of 2021 brought high levels of extreme weather in many of our markets, such as the floods in Germany and Belgium and the wildfires in Greece. These events demonstrate that climate change already affects our business and is a risk for our customers, our people, and our collateral assets. We are using the Task Force on Climate-Related Financial Disclosures (TCFD) Recommendations as a guidance to improve our work in this area. 

Climate change risk on secured assets

Hoist Finance has grown its secured portfolio from three per cent in 2017 to 28 per cent in 2021. We are accustomed to undertaking extensive due diligence on acquired loan assets, which includes thorough reviews of collateral assets as well as independent real estate valuations on those assets. These valuations incorporate extensive data around environmental issues such as flooding, subsidence and fracking.

Ensuring a full understanding of the value drivers in our portfolios, including environmental risks, is essential for managing our secured assets successfully.

Through a pilot initiative in the UK, we gathered this data into a comprehensive database which we are now populating with information for our French and Italian secured assets. We use open-source data, such as French Géorisques data, to learn how environmental issues might affect our book as well as potential new investments. Our secured assets have been geocoded, allowing us to better analyse our collateral and to assess new risks dynamically. The integration of our environmental risk data with other portfolio data allow us to include an ongoing environmental risk assessment in our investments processes and internal reporting processes.

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- Annual Report 2021 -
- Årsredovisning 2021 -