Climate risk screening for German real estate lending, delivered by API

Automated climate risk assessment for bank lending

VIDA and vdpResearch, the property market research company of the Association of German Pfandbrief Banks (vdp), have established a partnership to provide physical climate risk assessment to German banks. VIDA’s climate risk engine has been in production since March 2025, integrated by API into the platform through which vdpResearch already serves the association’s member banks. The service is fully automated: a bank submits a location and receives a completed assessment without manual intervention.

 

Requirement

Under the EU Taxonomy Regulation (2020/852), German lenders are required to assess and document the physical climate risk attached to their real estate exposures. At the volumes at which mortgage lending is written, commissioning such assessments individually is not practicable. vdpResearch sought to broaden the analytical capability available to its member banks and introduced VIDA as an additional provider alongside its existing arrangement. VIDA’s service extends beyond natural hazard analysis to include portfolio-level assessment, biodiversity and wider environmental risk.

Methodology

Three report types operate in production, covering natural hazards, EU Taxonomy climate risk and biodiversity, each available in short and long form and across eleven building classifications. The engine is built on established, published source models, including CMIP-6 climate projections accessed via NASA NEX-GDDP and the flood hazard and damage models of the European Commission’s Joint Research Centre. Results are projected to 2030, 2050 and 2080 across three emissions pathways, and are expressed as expected annual loss and as probable maximum loss by return period. The service operates under a 99.9% availability commitment and a maximum response time of 90 seconds.

Adoption

vdpResearch introduces the partnership to the member banks of the association. The service accommodates both individual assessments at loan origination and the evaluation of entire loan books; one bank submitted a portfolio of 27,000 addresses covering its full exposure. VIDA has presented the approach alongside vdpResearch at meetings and webinars of the European Mortgage Federation and European Covered Bond Council (EMF-ECBC).

In its second year, the partnership is being extended to a further two to three mainstream IT platforms used by major German banking groups, broadening the availability of the service across the sector.

The same engine also supports Berenberg Bank’s Article 9 fund, where it assesses renewable energy assets for the fund’s do-no-significant-harm analysis under SFDR.