Climate Risk and Real Estate Investment

Real estate developers and investors are increasingly recognizing the physical and transition risks posed by climate change. The Urban Resilience program’s work on climate risk explores industry trends identified within the ULI membership, addressing topics such as disclosure, climate data and insurance innovation. Considering current and potential future market conditions, the program documents emerging practices for assessing exposure to and mitigating climate risk.

Developing Urban Resilience

The case study library introduces real estate projects which have incorporated resilient design and seen a return on investment as a result. The site is searchable by climate hazard and value creation metrics, as well as real estate product type and region.

Building on this library, to further catalyze the development of resilient real estate projects, ULI partnered with Mill Creek Residential to create the Developing Resilience Toolkit. This resource:

Provides guidance on assessing the exposure of a portfolio to physical climate hazards and identifying and planning strategies to reduce risk
Provides a filterable screening tool of over 140 risk reduction and resilience strategies available to real estate teams. This tool can be sorted to see operations and maintenance considerations, applications across development types, asset-type specific considerations, co-benefits, examples of strategies in use, and more.

ULI—Heitman Climate Risk Series

Since 2019, the Urban Land Institute has partnered with Heitman, a global real estate investment management firm, on conducting research at the intersection of climate risk and real estate. These reports aim to examine climate risk from the perspective of the real estate investment community and promote best practices for addressing risks. Over the period of this partnership, industry awareness and engagement with this topic have clearly shifted. To learn more about this research, check out the reports linked below.

Change is Coming: Climate-Risk Disclosures and the Future of Real Estate Investment Decision-Making

This fourth report in the series examines how global regulations are driving more widespread, more comprehensive, and more auditable climate disclosure and what these new reporting requirements will mean for real estate investor decision-making. SFDR, local regulations, and the proposed SEC rule are just a few examples of new mandates requiring companies to disclose both GHG emissions and climate risks to their long-term business operations.

Insurance on the Rise: Climate Risk and Real Estate Investment Decisions

The fifth report in the series explores why insurance costs are increasing and the effect of rising insurance costs on commercial real estate owners. It also examines strategies for securing affordable insurance coverage, investment considerations that may make a building or portfolio more attractive to insurers, and emerging trends and insurance impacts that could reshape markets.

Climate Risk and Real Estate Investment Decision-Making

This agenda-setting report introduces the key links between climate risk and real estate investment and focuses on how real estate investors incorporate asset-level climate risks in their investment decision-making processes. It introduces the topic of climate risk and how it will impact the real estate sector.

Climate Risk and Real Estate: Emerging Practices for Market Assessment

The second report of the series shows how leading investors are developing approaches to better understand climate risk at the city or market scale, rather than focusing primarily on risk at the asset level. Contributors to this report Arup and Milliman perform corresponding ‘deep dive’ analyses from fiscal health and insurance perspectives.

Climate Migration and Real Estate Investment Decision-Making

Climate migration-related risks pose serious challenges to real estate investment and society more broadly. This third report of the ULI-Heitman Climate Risk series, identifies concepts and strategies for addressing climate migration in the context of real estate investment decision-making.

ULI-LaSalle Climate Risk Analytics Series

Since 2022, the Urban Land Institute has partnered with LaSalle Investment Management to help the real estate industry better assess, price, and address physical climate risk. To learn more about this research, explore the reports and resources linked below.

How to Choose, Use, and Better Understand Climate-Risk Analytics

Environmental, social, and governance (ESG) professionals have had to quickly become experts in climate risk assessments, turning to an increasingly wide offering of climate risk analysis providers. But when a person or firm tries to select the right partner, comparing apples to apples is nearly impossible. To help navigate this uncertainty, this report provides guidance on evaluating available products and understanding the complex science underpinning the data provided.
To better equip real estate leaders, Supplemental Guidance for Real Estate in Talking to Climate-Risk Analytics Providers provides investment managers with ten questions they can ask climate risk analytic providers as they evaluate if a provider meets business needs.

Physical Climate Risks and Underwriting Practices in Assets and Portfolios

Building upon How to Choose, Use, and Better Understand Climate Risk Analytics, this second report explores how leading firms are operationalizing physical climate risk analytics in acquisition, underwriting, and disposition. It introduces a framework to help investors evaluate the costs of action – and inaction – and better understand how physical climate risk may affect returns.

ULI Greenprint Tools and Resources for Real Estate

ULI Greenprint members are leading real estate owner, investor, and development firms committed to sharing best practices for climate action with their peers. ULI created the following tools and resources using ULI Greenprint members’ collective expertise and input to drive climate progress in the global real estate industry.

Global Green Building Policy Dashboard

Launched in January 2023, the Global Green Building Policy Dashboard helps real estate ESG teams more efficiently navigate regulations across 71 jurisdictions globally. The web-based tool enables users to filter by region, location, and category of regulation; addressing everything from energy and water use to green building certifications to climate resilience.

Sustainability Pre-Bid Checklist

ULI Greenprint members came together to address the challenges of insufficient information on sustainability performance and climate risk of potential acquisitions at the pre-bid stage, creating a Sustainability Pre-bid Checklist to help the buyer, seller, and broker communities coalesce around consistent sustainability data sharing and improve communication in the pre-bid process. The checklist is relevant for all types of deal structures and could result in more appropriate bid pricing and underwriting, such as costs to electrify, meet energy performance limits or pay resulting fines, or enhance resilience against climate hazards. 