As part of its strategy to expand its climate risk assessment capabilities, Toronto-based Teranet Inc. is partnering with Morningstar Sustainalytics, a leader in the field of ESG research, ratings and data collection.

The partnership comes on the heels of Morningstar’s June 29 acquisition of Aquantix, a Montreal-based tech company that has developed AI-driven climate risk models to provide risk metrics for approximately 500 million residential and commercial properties across 180 countries.

In effect, Teranet, which already had a strategic partnership in place with Aquantix, will now share access to Aquantix’s state-of-the-art climate change risk modelling capabilities with Morningstar, while the latter delivers to Teranet its ESG property-level climate risk data and analytical products.

This will enable Teranet to leverage its core property data business by offering its Canadian clients a more complete arsenal of analytical tools to monitor and assess climate-related risks to their real estate properties.

Important complementarities and synergies

“Combining Morningstar Sustainalytics’ advanced climate science models with Teranet’s expertise in real estate and property insights creates a new model to monitor and assess risks across multiple jurisdictions,” said Tim Lai, senior vice president of financial solutions at Teranet, in the announcement.

“This synergistic partnership will enable our organizations to deliver climate-related solutions to a broad range of customers across Canada and will positively contribute to our overall organizational ESG goals.”

Steven Fortier, director of software development for real estate solutions at Morningstar Sustainalytics, similarly underscored the synergies of the deal in a comment in the release.

“We are excited to partner with Teranet to align our climate risk solutions with their suite of asset valuation products,” said Fortier. “This partnership brings together crucial information about past and present climate events at a property level and further quantifies the estimated asset damage from emerging climate events across a variety of time frames and climate scenarios.”

Aquantix – key component of the deal

While financial terms relating to the partnership have yet to be disclosed, it seems Teranet waited until Morningstar Sustainalytics had completed its takeover of Aquantix before concluding the Sustainalytics portion of what is effectively a three-way deal: it gives Teranet guaranteed access to both Sustainalytics’ ESG research and database as well as Aquantix’s AI climate risk modelling tech.

“Banks, lenders and real estate asset managers require a comprehensive understanding of the impact that climate change has on their portfolio of real estate investments,” said Toby Messier, outgoing co-CEO of Aquantix and newly-appointed commercialization director of real estate solutions at Morningstar Sustainalytics in the announcement.

“Aquantix fills this void by capturing millions of climate-related data points and providing meaningful property risk metrics that measure the estimated asset damage from emerging climate events across various time frames and scenarios.”

Teranet – Canadian leader in its field

Teranet is owned by OMERS Infrastructure, which invests globally on behalf of OMERS, one of Canada’s largest defined benefit pension plans with $114 billion in net assets as of June 31, 2021.

Teranet is one of Canada’s leading companies in the field of statutory registry services with extensive expertise in land and commercial registries. It also provides property intelligence and data solutions to thousands of customers in the real estate, financial services and utility sectors as well as to government and legal organizations.

Founded in 1991, Teranet operates the Electronic Registration System for the Province of Ontario as well as the Land Titles and Personal Property registries end-to-end for the Province of Manitoba.

Teranet is the Canadian market leader in the field of lien registration and search, asset recovery services, and insolvency management and provides comprehensive systems which enable customers to conduct electronic transactions related to real property, titles, and registrations.

In May 2020, Teranet expanded its global footprint by acquiring all outstanding shares of Foster Moore after taking a 49.4 per cent minority stake in the company in 2014.

This acquisition expands its registry solutions to include commercial off-the-shelf registry software that delivers operational cost reductions, enhanced security, and process improvements.