Mortgages and Climate Change - Bank makes pioneering partnership

Atom bank has announced a partnership with climate tech business Kamma to give “an unparalleled view on both the physical and transition risks to its mortgage book.” 

Kamma will also provide analytics on Atom’s financed emissions, improved PCAF scoring, and climate credentials on pools of assets for the purposes of securitisation.

Kamma insists that alongside new reporting and disclosure requirements for banks and large listed businesses, the government’s legislative pipeline must inevitably contain substantial new regulations and risks for mortgage lenders. 

Atom has pledged to become a carbon positive bank by 2035 and claims its digital, cloud-native business model is intrinsically more efficient and less impactful on the environment than traditional banking models, while its chosen premises and policy for selection of suppliers aims to further help to reduce emissions. 

The next step for Atom is to address financed emissions, which will include using advanced analytics to help the bank and its customers reduce their carbon footprint. 

Phase one of the partnership involves a deep review of the mortgage portfolio and strategic support from the Kamma team. Phase two will see the development of new propositions, products and customer journeys that deliver this new strategy.

Kamma claims to have developed the UK’s most advanced view on the climate profile of UK property. This includes substantial modelling and high-grade address matching to close data gaps, data integration and calibration to improve accuracy, and unique analytics that chart a course to Net Zero for UK property.

Edward Twiddy of Atom bank says: “Banks have a crucial role to play in solving the climate challenge. Too much lending has been done by banks that has not taken account of the impact we are having on the climate, and it is important that this is changing. As a digital bank, we will use the best technology available to ensure we accurately measure emissions, understand risk and then help our customers to reduce their bills, increase the value of their property and be ready for a zero carbon future. 

“The damage we have already done is clear, and we do not see any reason to delay action when the evidence and imperative for change is in front of us. I’m delighted that we are partnering with Kamma to benchmark our emissions, manage our risks and most importantly, to provide practical ways for Atom and our customers to face into the future.”

And Kamma chief executive Orla Shields adds: “Our strategy is to partner with market leaders in order to support the development of bleeding edge propositions and light a pathway to Net Zero for other organisations. We’re hugely excited about the opportunity to partner with Atom Bank on their climate journey”.