ULI Europe develops free tool to build net zero into appraisals

The Urban Land Institute Europe is to develop a new interactive tool to help the real estate industry include the implications of climate transition in financial models used for investment decision making.

The tool, known as Preserve, will enable real estate companies to quantify the financial effects of the opportunities and risks associated with net zero transition. Risks, such as future energy costs and demands, potential rent increases, carbon pricing, and capital expenditure will be capable of being consistently and uniformly accounted for in investment decision making.

ULI said the tool will help mobilise the European real estate industry to speed up decarbonisation, and to understand and eliminate the barriers. 

The tool is being built by ULI Europe and sustainability analytics specialist Synergetic, in collaboration with Mott MacDonald and CBRE UK Valuations Advisory and is part of the ULI’s C Change programme. To ensure that Preserve is representative of broad industry requirements, the tool will draw upon the insights of the C Change partners, ULI members and a range of key stakeholders from across the value chain, the institute said in a statement.

Sophie Chick.

Preserve will be a free-to-use tool and will allow published ULI C Change Transition Risk Assessment Guidelines to be adopted at scale.

“There is a lack of consistency in the way that transition risks and opportunities are being integrated into business plans across the industry,” said Sophie Chick, vice president, ULI Europe. “The Preserve tool aims to create a level playing field for all, helping to facilitate and champion the wide adoption of transition risk assessments across all players and avoid the risk of any disadvantages.

“We see Preserve as providing an essential resource for everyone to implement the transition risk guidelines in a practical way.”  

Preserve will be developed in phases, the initial phase focusing on the tool’s technical specification. Development and testing will follow, then piloting and case studies.

Input and feedback from the ULI’s membership and the wider industry is being sought.