The United Nations Environment Programme Finance Initiative (UNEP FI) has published a report titled “Climate Risks in the Real Estate Sector.” The authors explore the challenges faced by the real estate sector and provide strategies to mitigate climate risks.
The real estate sector is one of the major contributors to carbon emissions worldwide, accounting for nearly 40% of all CO2 emissions related to energy. As the effects of climate change continue to be felt around the world, the real estate sector faces a number of risks that threaten the long-term viability of its investments.
One of the main conclusions of the report is that climate change presents a wide range of risks for real estate investors, whether it be increased operational costs due to extreme weather events or reduced demand for real estate in particularly vulnerable areas to sea level rise or other climate-related risks. Additionally, the report notes that the real estate sector also faces regulatory risks, as governments worldwide begin to impose stricter regulations on carbon emissions and energy efficiency standards.
To mitigate these risks, the report recommends that real estate investors adopt a number of strategies. These include increasing the energy efficiency of existing buildings, investing in renewable energy sources, and integrating climate risk assessment into investment decision-making processes. The report also highlights the importance of collaboration between stakeholders in the real estate sector, including investors, developers, and policymakers.
The issue of measures taken by the real estate sector to combat climate change will soon be addressed in a new episode of the Green RWA webinars. Stay tuned!
UNEP FI report: Climate Risks in the Real Estate Sector