Artificial Intelligence master's student Atreish Ramlakhan and other students performed the analysis for S&P Global.

A Katz School student team’s analysis confirmed that climate change threatens the value of S&P Global's real estate investments along the East Coast.

“We showed S&P that the public real estate companies they’re tracking are at a growing risk due to the increasing intensity of hurricanes,” said Atreish Ramlakhan, a master’s candidate in the artificial intelligence program.

Higher temperatures are leading to more natural disasters, such as hurricanes, wildfires and floods. These, in turn, are resulting in damaged property, lost income and disruptions to business activity that threaten to alter how assets, such as real estate, are valued and properly assessed for risk.

S&P Global is a publicly traded company headquartered in Manhattan with $6 billion in revenue as of 2017. Atreish said his team employed a series of algorithms that used geolocation data to pinpoint where hurricanes landed in the vicinity of assets that belong to real estate investment trusts (REIT), which are companies that own, operate or finance income-generating real estate.

Ramlakhan was joined by artificial intelligence students Xiaolan Li, Aishwarya Singh and Zeyu Wang; data analytics students Jacob Goodman, Humayra Kausar and Shichao Zhou; and mathematics student Brian Livian in the research that was presented to high-level S&P Global executives.

They used S&P data and the programming language Python to conduct asset mapping, asset mapping and text parsing, and to develop the mathematical algorithms for their findings. They also pored through climate reports issued by the International Panel on Climate Change and companies’ SEC filings, the latter shedding light on losses related to hurricane damage and subsequent capital expenditures for infrastructure repairs and increased insurance premiums.

“We looked at hundreds of companies,” said Atreish, “and from there, we looked at the aggregate impact on those companies’ financial health.”

Hurricane seasons are becoming unusually devastating because climate change is making storms more likely to stall once they hit land, pumping more rain and wind into coastal towns and cities for longer periods of time. Their presentation confirmed the suspicions of high-level S&P executives—that the REITs’ exposure to climate-induced hurricane damage ranges in the hundreds of millions of dollars.

“Their presentation was stellar,” said Dr. Yuri Katz, who advised the students and is senior director of data science at S&P Global Market Intelligence. “It exceeded expectations.”