Providing the data and analysis to bring ambitious climate targets to fruition: Atom bank
94%
Address matching rate
11%
of EPCs modelled for full data coverage
3.02
New, improved PCAF score
Atom bank is an app-based bank making it simpler and faster for customers to manage their savings and loans, including a range of commercial mortgages. Since its infancy the company has always taken environmental impact seriously.
The challenge: How to reduce mortgage book financed emissions to meet ambitious climate targets
Atom bank has set a highly ambitious goal of being climate positive by 2035. This is one of the most aggressive climate targets we’ve seen amongst UK banks and lenders.
The company has already achieved large emissions reductions per employee by focusing on Scope 1 and 2 e.g. office energy supply and business travel policies.
But, as a financial institute it would be vital to address Scope 3 financed emissions from lending and investments, with mortgage loans a big part of that.
To do this, Atom bank first needed to measure the financed emissions and level of climate risk within its current mortgage book, and the rate of decarbonisation that they would actually need to deliver on to achieve their ambitious climate target by 2035 – but they lacked both the data and the internal time and expertise to easily undertake this analysis.
“We were conscious that as a new bank we could quite quickly have a more significant environmental impact than most businesses in the small city of Durham that we call home, because of the emissions associated with lending and investment activities.”
Edward Twiddy
ESG Director
The solution: Partnering with Kamma to get the full view on financed emissions and transition pathways
Atom bank assessed several potential data and climate analysis providers. Kamma was recommended to the team by another lender, and quickly became the front runner.
“It was clear from the start that Kamma’s team spoke our language and understood the specific challenges facing banks and lenders, giving us the confidence that we could access the right data, analysis, and guidance to meet our needs.”
Cameron Fyfe
ESG Analyst
Working with Kamma allowed Atom bank to more accurately report on transition risk
By partnering with Kamma, Atom bank has been able to gain the full picture on the current impact of their mortgage book and the best pathways to reduce that in order to meet their ambitious targets. The collaboration has also contributed to a change of attitude within the company as a whole when it comes to climate risk and actions within residential lending.
94%
11%
3.02
Address matching rate
of EPCs modelled for full data coverage
New, improved PCAF score
“Understanding how policy changes would impact our climate targets and emissions reductions plans is particularly important for us as a high-growth, fast moving, challenger bank – we need to balance business growth goals with decarbonisation goals so having the full picture of potential outcomes is hugely valuable.”
Edward Twiddy
ESG Director
- Best-in-class financed emissions calculations for the mortgage book, ensuring an accurate baseline for emissions reductions plans and climate disclosure requirements
- Benchmarking against key competitors and the national lender market
- A detailed understanding of climate risk for existing lending across both physical risk and transition risk (including stress testing and materiality testing), enabling data-driven climate risk mitigation approaches for both existing loans and new originations
- Modelling of the necessary rate of decarbonisation required within the mortgage book in order for the business to meet its climate target by 2035
- Identifying decarbonisation opportunities such as the proportion of properties in the mortgage book that could reach EPC C through awareness campaigns or retrofit financing
- Scenario analysis to highlight how different dependencies would impact this required rate of decarbonisation e.g. if legislation sped up the decarbonisation of the National Grid or enforced minimum energy efficiency standards for existing homes
What’s next for Atom Bank?
Atom bank is now focused on turning plans into action to reduce climate risk and financed emissions in the mortgage book – and continues to collaborate with Kamma to do so.
In particular, the team is aware that influencing customer behaviour to drive energy efficiency improvements is vital for their goals, but will be a challenge. In support of this, Atom bank is integrating Retrofit Explorer by Kamma into its banking app to clearly showcase the benefits of retrofitting a home to customers.
“Working with Kamma has enabled us to move from abstract principles and ideas to quantities and comparisons. The quality of insights has made it much easier to demonstrate what transition risk actually means for us and to open productive conversations with key stakeholders in our net zero planning, such as our Chief Risk Officer.”
Edward Twiddy
ESG Director
