UN (Environment Programme Finance Initiative)
2022
Authors: Not specified.
The report "Managing Transition Risk in Real Estate: Aligning to the Paris Climate Acc" by the UN Environment Programme Finance Initiative highlights the significant transition risks faced by the real estate sector as economies strive for decarbonization. It underscores the necessity for financial institutions to adopt proactive strategies to mitigate these risks. The document evaluates the current state of real estate assets and the challenges in aligning with net-zero goals, offering insights into the climate-related hurdles and actionable recommendations for overcoming them. Utilizing the Carbon Risk Real Estate Monitor (CRREM) tool, the report summarizes the experiences of participating investors and banks within UNEP FI’s Task Force on Climate-related Financial Disclosures (TCFD) programme. Ultimately, it reveals both opportunities and risks for financial institutions involved in real estate investments, building upon the foundational work of UNEP FI’s Property Working Group.
Real estate faces significant transition risks as economies decarbonize. To mitigate the impact of potential transition risks, financial institutions active in this sector must be proactive.
This report assesses the state of real estate assets and the challenges the sector faces to align to net zero. It provides insights on the climate challenges confronting the real estate sector, and recommendations for addressing them.
To develop this resource, a dozen real estate investors and banks piloted the Carbon Risk Real Estate Monitor (CRREM) tool as part of UNEP FI’s Task Force on Climate-related Financial Disclosures (TCFD) programme. The report authors document the experience of participating financial institutions and illustrate how the CRREM tool can be deployed to effectively measure and manage real estate transition risks. Their findings reveal both the opportunities and the risks for financial institutions investing in real estate assets.
This project builds on work done by UNEP FI’s Property Working Group, now convened by the Principles for Responsible Investment (PRI). Find out more here.