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Climate change

Flood Risk Assessments in a Changing Climate: Ensuring Informed Investment Strategies

Strategic Insights

— 1 min read

The UK is experiencing heightened flood risks, driven by climate change, extreme weather events, and urban expansion. For investors and asset managers, flood resilience is no longer just an environmental consideration, it is a critical factor in financial decision-making, asset valuation, and transactional due diligence. Traditional Flood Risk Assessments (FRAs) often rely on historical flood data, but this fails to account for climate-driven risks. By integrating UK Climate Projections (UKCP) scenarios, investors can anticipate fluvial, pluvial, and coastal flood impacts, ensuring assets remain insurable, financially viable, and compliant with evolving regulations.

Key Takeaways:

  • Flood risk is a financial risk, impacting asset value, insurance availability, and investor confidence.
  • Standard Flood Maps are not enough, and must be supplemented with bespoke, forward-looking flood risk assessments that incorporate climate projections.
  • Flood Risk Assessments are critical for transactions and future development, supporting acquisitions, divestments, and securing planning permission.
  • Mitigation strategies, such as Sustainable Drainage Systems (SuDS), resilient design, and adaptive infrastructure, are essential for long-term viability.
  • Flood risk assessments support ESG reporting, aligning with frameworks like IFRS S2 and demonstrating climate resilience to stakeholders.
  • Investors across all sectors benefit from FRAs, not only for large developments but also for logistics, retail, data centers, and institutional portfolios.

Statistics:

  • 75% of investors consider flood risk when making investment decisions (Antea Group UK, 2023).
  • 60% of UK businesses have experienced flooding in the past 10 years (UK Environment Agency, 2020).
  • Flood-exposed properties face 20-30% higher premiums (Insurance Services Office, 2020).
  • 75% of assets in the UK's south-east region are at some level of flood risk (UKCP, 2020).
  • Under-insurance costs for flood-related losses in the UK can reach up to 10% of the asset's value (Insurance Services Office, 2020).

Sources:

  • M2 PRESSWIRE (August 19, 2025): Flood Risk Assessments in a Changing Climate: Future-Proofing UK Investments.
  • UK Environment Agency (2020): Flood and Coastal Erosion Risk Management (FCERM) Policy Statement.
  • Antea Group UK (2023): Flood Risk Assessments for Investors and Developers.
  • UK Climate Projections (UKCP) (2020): UK Climate Projections 2018 (UKCP18) Climate Scenario Run.
  • Insurance Services Office (2020): Flood-Related Insurance Losses in the UK.
  • IFRS S2 (International Financial Reporting Standards) (2020): Climate-Related Financial Disclosures (TCFD).

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