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Collaboration with Borgo for a more sustainable mortgage market

Climate change means that the risks of damage to properties and buildings are increasing. Borgo, which is a mortgage company that exists to enable better mortgage conditions for more people is now starting a collaboration with UC, which is a part of Enento Group, to classify its mortgage portfolio based on climate risks. This effort will have a particular focus on water risks, where the goal is to create a more sustainable mortgage market.

Climate risks are an increasingly obvious part of the valuation of and lending to housing. The EU taxonomy’s two environmental targets, which must be complied with since the turn of the year, have driven the development.

  • The first environmental goal means that companies must report whether or not they significantly contribute to climate change at building level.
  • The second environmental goal is about adapting operations based on climate change. Damage to properties and buildings caused by climate means financial risks that must be managed both at portfolio level and in ongoing processes. Damage risks that properties in Sweden are exposed to are, for example, linked to storms, sea level rise, high water flows, increased rainfall, fire, erosion and lightning strikes.

“As a challenger in the mortgage market, we want to be at the forefront and also push our own customers and the market to become more sustainable. We also think that as an actor in the mortgage market we have a responsibility to make it easier for our customers to make long-term smart decisions. In collaboration with UC, we can now manage each object based on its specific conditions. We will analyze the results and see interesting opportunities to further improve our offer and tune our credit process to provide as many favorable terms as possible”, says Peter Walldour, COO and Deputy CEO at Borgo.

UC Fastighetsrisk is a digital service that calculates a risk class for each individual property. Risk of damage caused by climatic influences is calculated based on each object’s specific conditions, for example altitude conditions and location near coasts and waterways affect the risk of water damage.

“Borgo is an interesting player that is far ahead when it comes to efficient and automated processes and I am not surprised that they chose UC Fastighetsrisk, which provides quick answers at object level. Our digital services have a proven high rate of iterative development and the focus is on continuously adding more climate risk variables and changes to our climate service. This makes UC Fastighetsrisk a future-compatible service and an interesting alternative to costly static area analysis for all companies exposed to real estate,” says Stéphane Hedman, expert at UC.