Climate change should be considered a new core aspect of creditworthiness when prospective home buyers apply for a mortgage, a new report suggests.
The analysis from the climate risk financial modeling firm First Street is a groundbreaking nationwide look at the ties between the growing risks from extreme weather such as floods and wildfires, and a long-suspected spike in mortgage defaults in hard-hit areas.
It finds that lenders and borrowers are exposed to more financial risk than they are aware of because current ways of determining creditworthiness leave out exposure to climate disasters as a factor. If climate risk were to be taken into account by lenders — which the analysis shows may be increasingly necessary as climate change worsens the severity and frequency of certain extreme weather events — then the next time someone goes to get a home loan their credit score could be knocked down (or adjusted upward) due to their climate risk exposure.
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Waste management and resource recovery remain essential to circular progress. The Department for Energy Security and Net Zero’s recent review identified strong potential for circular construction strategies and end‑of‑life reuse in construction to deliver quantifiable carbon savings. Yet challenges persist in the rollout of Simpler Recycling due to legacy property structures. Strengthening these back‑end systems ensures green building products re‑enter value chains, supporting both circular economy objectives and sustainable urban development. The collective impact across policy, design, education, and technology confirms that the carbon footprint of construction can be reduced dramatically when the sector treats sustainability as an integrated, measurable discipline rather than an optional ambition.
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