How high-resolution data translates flood risk into financial risk

S&P Global Sustainable1’s new projections of river flood provide analysis of flood exposure at a resolution of 30x30 meters, revealing potential damage at the individual building level. The new model, combining S&P Global Sustainable1’s climate projections with historical data from flood-modeling firm JBA Risk Management, includes data on flood defense systems such as levees. This shows which buildings depend on municipal flood-protection infrastructure and where protection may be inadequate.

In three case studies, S&P Global Sustainable1 estimated the potential costs to residential real estate, commercial real estate and roadway infrastructure during floods of different depths. For example, in Sacramento, California, we estimate the total cost of property damage to single-family residential real estate to be about $378 million for a 20-year flood and $3.6 billion for a 100-year flood during the 2030s, under the SSP2-4.5 climate scenario. Flood depths that were historically infrequent are projected to become more common as the world warms. Investors, banks and companies with portfolio exposure or assets in developed areas around rivers may seek to reassess their exposure to floods as historical trends may no longer reflect long-term risks.