What is Climate Resilience?
Climate Resilience in real estate both identifies, quantifies, and manages the risk that climate change poses to assets, portfolios and corporate strategies. Longevity’s role is to identify the climate change risks your assets are facing and advise you on the most appropriate adaptation and mitigation measures to prevent or minimize the damage they can cause and take advantage of opportunities that may arise. Climate change impacts many areas of the environment, society and our economy, therefore our assessments analyze four key areas:
- Physical risk: what is the physical exposure to your asset’s location to all chronic and acute natural hazards
- Transition risk: what are the risks that your asset or portfolio may face during the transition to a low carbon economy. This factors in market, technology, policy, and reputational risks.
- Social risk: what are the risks posed to those who visit, use, or surround the asset. Health and safety, consumer values, and community impact are assessed here.
- Financial implications: what impact climate change may have on capital, valuation, and the continuation of business.
Why is Climate Resilience important to the built environment?
The increasing impacts of climate change pose immediate and long-term threats to the property sector. Given the built environment accounts for approximately 40% of global greenhouse gas emissions, both mitigation and adaption measures are therefore imperative to protect assets, provide long-term resilience and reduce any further contribution towards climate change.
Furthermore, understanding climate risks has become increasingly important for investors and is now mandatory for certain companies and institutions to measure and disclose under the Task Force on Climate-related Financial Disclosures (TCFD)
How does a climate risk assessment benefit you?
Conducting a climate-related risk assessment will identify areas of your asset’s building structure, technologies and processes that are resilient to future scenarios of climate change, and those which are vulnerable and should be adapted. This can be conducted at an asset or portfolio screening level. Longevity Partners will provide tailored recommendations of how to improve your resilience and decarbonize your asset or portfolio through our three-step approach: identify, quantify and managing risks.
Such an assessment will enable:
- Identification of current and future climate change threats on assets based on climate scenarios aligned to the IPCC.
- Understanding of when an asset will be considered ‘stranded’ (not aligned to the Paris Agreement targets of limiting global warming to 1.5℃), and tailored decarbonization targets and strategy to reach Net Zero Carbon.
- Adaptation recommendations for the protection of value of real estate assets.
Effective and efficient action will thus provide the following benefits:
- Assurance that an asset’s vulnerability to future climate change is reduced.
- Demonstrable commitment to mitigate climate change to investors and clients.
- Compliance to upcoming mandatory regulations including the TCFD, and the avoidance of financial penalties.
How can Longevity Partners help you?
Our qualified and experienced climate team will assist you to manage your climate risk through the various services we offer:
- Portfolio-wide climate-related risk assessments to evaluate the exposure of your assets to physical, transition and financial risk, aligned to the internationally recognize Paris Agreement pathway of 1.5℃ warming and IPCC scenarios for analysis. This preliminary approach can be used as a funneling or sampling methodology to determine further action.
- Comprehensive climate-related risk assessment analyzing the exposure and sensitivity of selected or high-risk assets to physical, transition, social and financial risk, and providing tailored mitigation and adaptation solutions. This service complies with regulatory or certification requirements, including GRESB, BREEAM In-Use and the EU Taxonomy.
- An optional extended service of the climate risk assessment includes a further deep dive into your asset’s energy systems to provide you with tailored decarbonization targets and the associated capex required.
- TCFD reporting for your business and for inclusion in your annual reports. A TCFD gap analysis following the first reporting cycle will offer you recommendations on how to improve your climate-aligned business practices for the next reporting period.
- Climate-related risk assessments for new construction projects, including key policies and regulations for building design, to ensure your asset meets best practice from the start.
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