Climate risk scores on home listings draw scrutiny from conservative groups
WASHINGTON (TNND) — Millions of Americans begin their home search online, where listings now commonly include information about a property’s potential exposure to flooding, wildfire, heat and other climate-related hazards. But the growing use of private climate risk scores is becoming the focus of a political debate, with critics arguing the ratings may unfairly influence home values and buyer decisions.
Alongside government flood information from the Federal Emergency Management Agency (FEMA), many real estate websites, including Zillow, Redfin and Realtor.com, also display climate risk assessments from First Street, a private data company. The company uses predictive modeling to estimate how climate-related risks could affect individual properties over time.
Supporters say those projections give prospective buyers a more complete picture of future risks that may not be reflected in historical government data. First Street says its mission is to help consumers and businesses make more informed financial decisions by treating future climate risk as a financial consideration.
Climate risk has “started to erode” the foundation of the real estate market, the company says on its website, arguing that better data can help identify risks, avoid poor investments and encourage more resilient development.
But the methodology has drawn criticism from several conservative consumer and policy organizations, which argue the scores can potentially overstate a property’s risk and discourage potential buyers.
“So you have this score put up against your property, and it could affect the retail or at least the interest in the property,” pointed out Will Hild, executive director of Consumers’ Research.
Hild argues buyers may rely too heavily on predictive scores rather than a property’s actual history, potentially affecting bidding activity, insurance decisions and resale value.
A key point of disagreement is how the data are generated. FEMA’s flood maps are largely based on historical flooding and regulatory standards, while First Street incorporates climate projections intended to estimate future risk under changing environmental conditions.
The debate has also expanded beyond real estate. Some conservative groups argue the scores are part of a broader effort to incorporate environmental, social and governance, or ESG, metrics into more areas of the economy. Molly Vogt, a senior fellow at the American Energy Institute, contends the ratings could discourage homeownership by making some properties appear financially out of reach.
“Woke Wall Street has an outright attack taking place right now on Middle America’s biggest asset, their house,” said Vogt.
Critics are now urging Congress to examine how the private climate scores are developed, who funds the modeling, and whether homeowners should have a formal process to challenge or appeal ratings they believe are inaccurate.