The UK’s app-based digital bank, Atom Bank, has joined forces with climate tech business Kamma, gaining access to its full climate suite, offering an unparalleled view of both the physical and transition risks of its mortgage book.
Kamma will also provide enhanced analytics on financed emissions for Atom Bank, improved PCAF scoring, and climate credentials on pools of assets for securitisation.
The partnership comes at a time when customers, investors and regulators alike are becoming increasingly aware of the role of bank’s lending to the world’s climate. As a result, these players are backing a quick transition to net zero.
The first phase of the collaboration will involve an in-depth review of the mortgage portfolio and strategic support from the Kamma team. The second phase will look at the development of new propositions, products and customer journeys that deliver this new strategy.
Alongside new reporting and disclosure requirements for banks and large listed businesses, the government’s legislative pipeline must eventually, but inevitably, contain substantial new regulations and risks for mortgage lenders.
Greening the UK’s property stock is critical to driving down costs for households and reducing harmful emissions. Kamma’s solutions will provide clear guidance supporting risk management, regulatory reporting and green asset qualification.
Kamma has developed a more advanced view of the climate profile of UK property. Its offering 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.
Bank’s lending has not taken climate impact into account
Edward Twiddy, director of ESG at Atom Bank, said: “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, provide practical ways for Atom and our customers to face the future.”
Atom has pledged to become a carbon-positive bank by 2035. The bank explained that its digital, cloud-native business model is less impactful on the environment than traditional banking models, while its chosen premises and policy for the selection of suppliers aim to further help reduce emissions. Atom now plans to address financed emissions, using advanced analytics to help the bank and its customers alike reduce their carbon footprint.
Orla Shields, CEO of Kamma, added: “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.”