The State of Nebraska filed a lawsuit under its Consumer Protection Act and Uniform Deceptive Trade Practices Act against First Street Technology, Inc. (First Street), a public benefit corporation whose business includes use of models to provide climate risk scores for individual properties. The complaint alleged that “Nebraskan home buyers have relied on First Street’s climate risk financial models to inform their decision on whether to buy a particular home” but that the models in many instances provided “faulty information” that “misled home buyers into thinking that, because of climate change, a particular home is a riskier purchase than it actually is.” The complaint stated that Nebraska “understands prediction models inherently will include error” but asserted that “First Street’s conduct rises to the level of unlawfulness by inducing consumer reliance on fundamentally flawed prediction models without communicating such limitations.” The complaint alleged that First Street’s models “suffer from at least two significant biases” that the company did not disclose to consumers. First, the complaint alleged that “the degree and extent to which climate change will increase loss events into the future is an inherently speculative endeavor on which climate experts and other climate modelers disagree” but that First Street did not disclose the disagreement. Second, the complaint alleged that First Street’s position as a “for-profit participant in a market that exists on the assumption that climate change has sufficiently destabilized existing climate and weather models such that new models are needed” gave First Street “a clear pecuniary incentive to overstate the effects of climate change and to understate the relevance of existing models.” Nebraska requested injunctive relief, civil penalties, restoration “to every person any money acquired by First Street” as a result of their violations of the Consumer Protection Act and the Uniform Deceptive Trade Practices Act, and costs and attorney fees.

State of Nebraska's lawsuit against First Street Technology, Inc. for allegedly providing climate risk scores for individual properties that misled homeowners.

State of Nebraska v. First Street Technology, Inc.

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Nebraska Filed Lawsuit Alleging that Company’s Climate Risk Scores for Properties Provided “Faulty Information”

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

Codes and standards are regulatory instruments that specify minimum standards to protect health and safety. This ranges from performance standards, which prescribe outcomes while allowing flexibility to achieve compliance, to the more prescriptive approach of technology-specific standards.

Zoning and spatial planning are both methods for guiding the distribution of people and activities in a space, and are regulatory restriction.

The processes through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. Due diligence is the idea that reasonable precautions should be taken to avoid causing harm to people, the environment, or society. It also involves identifying and mitigating risks before they occur.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Conditions that enhance the feasibility of adaptation options. Enabling conditions include finance, technological innovation, strengthening policy instruments, institutional capacity, multi-level governance and changes in human behaviour and lifestyles.

Actions or measures to adapt terrestrial systems to climate change.

Actions or measures to adapt freshwater systems to climate change.

Actions to adapt and increase the resilience of rural and urban infrastructure and settlements to climate change.

Coastal zone and marine-related actions and measures to adapt and increase resilience to climate change

Actions and measures to adapt and increase resilience of societies and the economy to climate change.

Actions or measures to adapt freshwater, coastal and marine systems to climate change.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Risks to the ecosystem health of the marine environment, including ocean warming, ocean acidification, and ocean deoxygenation, harming biodiversity, species health, ecosystem services, and coastal community livelihoods.

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

Terrestrial means "of the earth" and relates to the risks to ecological system that includes all living organisms and their interactions within land-based environments, such as forests, grasslands, and deserts.

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

People with different national or cultural traditions from the dominant population

Social and cultural groups that share collective ancestral ties to the lands and natural resources where they live, occupy or from which they have been displaced

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

This sector provides communication services, software development, and IT solutions.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

Heavy precipitation refers to any form of weather where substances fall from the sky, including rain, snow, sleet, or hail.

Nebraska Filed Lawsuit Alleging that Company’s Climate Risk Scores for Properties Provided “Faulty Information”

Policy instrument

Risk

Impacted group

Just transition

Greenhouse gas

Economic sector

Adaptation/resilience

Finance