Climate-Change Risks Get the Attention of Real Estate Investors – The New York Times

by | Apr 19, 2022 | Climate Change

Efforts to capture some of that science and turn it into actionable data are growing. Over the past few years, for-profit services like Moody’s ESG Solutions and Archipelago and nonprofit research groups like First Street Foundation and Rhodium have evolved to quantify the physical risk of an asset. For projects in the United States, they can often provide granular, property-level data; for example, a project on high ground will be rated as lower risk, even if there’s a stream on the property.But the field lacks established standards. The data analytics firms use different maps, scenarios and methodologies; some take into account building types and infrastructure, while others are more basic, making assessments difficult to compare.And that’s just physical risk. Investors are also mindful of “transition risk,” which includes changes to the policy and regulatory environment. For example, if Charleston’s leaders amend the zoning code to ban building at the lowest elevations, land values in the city could radically shift. Similarly, a sea wall would be paid for in part by increased property taxes. Both options could affect the city’s attractiveness to investors. But most of the existing climate models do not comprehensively address potential changes like these.Wary investors are also peppering developers with questions about resilience strat …

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