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ESG, Real estate performance, Research, Sustainability

How to choose, use and better understand climate-risk analytics

September 26, 2022
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  • Given the scope and magnitude of climate change’s long-term impact on real estate value, the business of assessing and mitigating the effects of climate risk in real estate has the potential to be a trillion-dollar opportunity.

    Over the past few years, a wide array of software companies, consultants, and risk analytics firms have developed assessment tools and models to better assess and price long-term climate risk. While many of these climate-risk analytics firms are using similar data sets and looking at similar climate risks in the same markets, their assessments of long-term climate risk vary considerably—even when evaluating the exact same assets. This presents the real estate industry with significant challenges and opportunities that require us to evolve our current approach. Establishing a shared understanding of climate risks and opportunities is a foundational step to ensuring investment performance now and into the future.

    To better assess, price, and mitigate long-term climate risk in real estate, the industry needs better models and better tools. This report provides insight to our industry on how to interpret climate-risk analytics, identify risks effectively, and incorporate them in our decision-making throughout the investment life cycle. We believe collaboration is necessary to move forward and accelerate change to successfully adapt to, mitigate, and ultimately prevent further climate change risks.

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Apr 17, 2024 ISA Briefing: Climate risk in practice: Regional, market and asset-level views Recognition has grown substantially in recent years that climate risk can shape real estate investment outcomes.
Apr 11, 2024 Physical Climate Risks and Underwriting Practices in Assets and Portfolios LaSalle and the ULI have released a step-by-step framework to evaluate physical and financial risk and compare cost and benefits of resilience.
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Apr 03, 2024 ISA Briefing: Elections everywhere, all at once: Geopolitics and risk 2024 is an election year like no other. Roughly 60% of the world’s population lives in countries facing major elections this year. Combined, these markets represent approximately 65% of the institutional investable real estate universe.

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