{"id":2450,"date":"2018-09-26T09:47:55","date_gmt":"2018-09-26T13:47:55","guid":{"rendered":"http:\/\/lifeaftercarbon.net\/?p=2450"},"modified":"2018-09-26T09:48:49","modified_gmt":"2018-09-26T13:48:49","slug":"weathering-the-storm-real-estate-climate-resilience-finally-gets-attention","status":"publish","type":"post","link":"https:\/\/in4c.net\/2018\/09\/weathering-the-storm-real-estate-climate-resilience-finally-gets-attention\/","title":{"rendered":"Weathering the Storm: Real Estate Climate Resilience (Finally) Gets Attention"},"content":{"rendered":"

\u201cIt blows my mind that this is coming up now: <\/em><\/strong><\/p>\n

Real estate risk from the physical impacts of climate change.\u201d<\/em><\/strong><\/p>\n

That\u2019s how Neil Pegram, Director of Americas with\u00a0GRESB<\/a>, a global investor-driven benchmark organization that tracks real estate portfolios\u2019 environmental, social and governance performance, welcomed attendees at GRESB\u2019s affiliate event at last week\u2019s Global Climate Action Summit.<\/p>\n

Pegram was noting\u00a0how slow the real estate industry has been<\/a>\u00a0in turning its attention to the impact of climate change on real assets, even though climate resistance has become an investment imperative in a sector where such investments often are held for a decade or longer.<\/p>\n

It seemed apropos that the GRESB event was taking place as the East Coast prepared for Hurricane Florence\u2019s anticipated wrath and as the real estate industry absorbs the news that 2017\u2019s natural disasters caused an estimated $220 billion in property and infrastructure damage \u2013 two-thirds of the $330 billion in global economic losses, figures Munich RE.<\/p>\n

In March, GRESB released a new resilience module, an optional supplement to the GRESB Real Estate and Infrastructure Assessments. It is a significant improvement over the paltry resilience checkbox that GRESB included in prior benchmark frameworks.<\/p>\n

GRESB leaders acknowledged it was the\u00a0Financial Stability Board\u2019s Task Force for Climate-related Financial Disclosure (TCFD) recommendation that information related to governance, risk management, strategy, and performance metrics be disclosed that caused them to fortify the resilience benchmark.<\/p>\n

Several real estate investors in attendance described their portfolio\u2019s resilience \u2013 and they reinforced the view that an industry awakening has begun. Nina James, General Manager, Corporate Sustainability,\u00a0for Investa said that resilience generally is considered a \u201cmega trend\u201d and investors place it in the category of a \u201ctaking a long-term bet.\u201d Like technology, climate change is viewed as a disruption that influences thinking and begs questions about what effective asset stewardship should look like.<\/p>\n

Martin Kholmatov, Senior Responsible Investment Specialist at AIMCo, acknowledged that a new set of stresses and shocks exists. \u00a0\u201cThey make us wonder, how is the business model going to evolve.\u201d He said, adding that he and others think that \u201ca proxy for good management is looking at ESG [Environment, Social and Governance] issues.\u201d<\/p>\n

Romilly Madew, representing Australia\u2019s Green Building Council, noted that a growing number of investors ask about resilience. \u201cWe tell our members to deal with resilience now and be prepared because investors are going to ask,\u201d she explained.<\/p>\n

And\u00a0Michelle Bachir of Deloitte\u00a0pointed out that the firm\u2019s advisory clients \u201care wondering what to put out there to make it decision useful for investors. \u00a0Our clients want to portray their leadership in the space. This is an exciting time.\u201d<\/p>\n

But GRESB\u2019s data don\u2019t completely confirm this positive tone. Only 13 percent of Real Estate Assessment GRESB responders \u2013 just over 100 firms \u2013 submitted information for the resilience module. The vast majority reported on only 20 percent of the resilience module, a poor showing indeed.<\/p>\n

Adam Kirkman, Head of ESG at AMP Capital struck a conservative note by asking, \u201cWhere is the right time to pull the lever to future proof an asset based on risks down the track\u2026.What is the financial engineering resilience required?\u201d He also pointed out that benchmarking is for the current real estate portfolio, while resilience decision-making needs to be built into new assets, too.<\/p>\n

Ari Frankel, Sustainability & High-Performance Buildings, Alexandria Real Estate Equities, Inc. put a fine point on the challenge beyond GRESB. \u00a0Unlike other reporting frameworks such as GRI that requires quantification of progress and check boxes relating pastinformation, TCFD is \u201ctransformative, because you are asking investors to look at forward-looking, qualitative and scenario-based uncertainty.\u201d<\/p>\n

Let\u2019s hope these real estate mavens attended the actual Global Climate Action Summit. They would have heard from leaders as varied as James Lee Witt, former FEMA director and current advisor to Fortune 500 companies; Lionel Johnson Jr., mayor of St. Gabriel, La.; former U.S. Vice President Al Gore; Henk Ovink, Special Envoy for International Water Affairs for the Kingdom of the Netherlands; and Johan Rockstr\u00f6m, executive director of the Stockholm Resilience Centre. They warned that the real estate sector\u2019s ongoing drive for coastal development was on a collision course with climate risk, imperiling real\u00a0estate assets and humans.<\/p>\n

The UNFCCC\u2019s\u00a03rd Biennial Assessment and Overview of Climate Finance Flows released in April \u2014 a month after GRESB\u2019s resilience module \u2013 calculates that real estate assets at risk in 2070 will be $35 trillion (total value). \u00a0Now that\u2019s mind-blowing.<\/p>\n

This article originally appeared on <\/em>Triple Pundit<\/a><\/em><\/p>\n

Image credit:\u00a0<\/em>NOAA Environmental Visualization Laboratory<\/a><\/em><\/p>\n

 <\/p>\n

 <\/p>\n<\/span>","protected":false},"excerpt":{"rendered":"

\u201cIt blows my mind that this is coming up now: Real estate risk from the physical impacts of climate change.\u201d That\u2019s how Neil Pegram, Director of Americas with\u00a0GRESB, a global investor-driven benchmark organization that tracks real estate portfolios\u2019 environmental, social and governance performance, welcomed attendees at GRESB\u2019s affiliate event at last week\u2019s Global Climate Action […]<\/p>\n","protected":false},"author":10,"featured_media":2451,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[22,158],"tags":[],"class_list":["post-2450","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-adaptation","category-guest-blogger"],"_links":{"self":[{"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/posts\/2450","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/comments?post=2450"}],"version-history":[{"count":1,"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/posts\/2450\/revisions"}],"predecessor-version":[{"id":2452,"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/posts\/2450\/revisions\/2452"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/media\/2451"}],"wp:attachment":[{"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/media?parent=2450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/categories?post=2450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/in4c.net\/wp-json\/wp\/v2\/tags?post=2450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}