Climate Risk Monitor development brings better insight of risks
In 2021, a.s.r real estate developed a tool to identify climate risks for real estate based on data from the KNMI Climate Effect Atlas and Climate Adaptation Services (CAS), writes Marco van der Spank.
This tool, called the Climate Risk Monitor, has been further developed and professionalised, based partly on the recent Framework for Climate Adaptive Buildings from the Dutch Green Building Council (DGBC).
Thanks to DGBC’s contribution, we can make an even more accurate environmental scan and soon an optimised building scan. With these, we will know down to the level of the individual building and plot of land exactly the scale of various climate risks.
The improved tool divides climate risks into four themes: heat; drought; flooding; and extreme precipitation. Then it gives a score for each climate risk theme to every building and plot in a.s.r. real estate’s portfolios. The higher the score, the greater the climate risk.
Heat stress
Heat stress, for example, is largely experienced in densely built-up areas. In cities, people are more likely to suffer from it during a heat wave, because the heat stays longer. Heat stress is more of an issue in buildings such as offices or apartment complexes where people are present for long periods of time, than in shopping centres, for example, where most users are only there temporarily.
Using data from the Climate Impact Atlas, we can see where heat stress might have the greatest impact. We can also use this data to come up with measures to increase climate adaptation. For example, you can counter heat stress by greening gardens and roofs. This is something we are already working on within the ASR Dutch Core Residential Fund. This also increases biodiversity.
You can only guarantee long-term returns when objects are attractive to users and society. Our focus is on the sustainable value development of real estate. We can achieve this by reducing CO2 emissions, accelerating the energy transition and making our portfolios ‘Paris-proof’ and climate adaptive.
Climate maps
With the Climate Risk Monitor, we have set up a dashboard through a Geographical Information System (GIS). This combines the climate maps of the Climate Effect Atlas with the geodata of our property portfolios to get the necessary data on the various climate risks. These are then plotted on interactive maps, which give us an idea of risks for our existing real estate portfolio.
As we can perform this risk analysis on any plot of land in the Netherlands, we can also see any climate risks that might be associated with possible acquisitions.
We are currently also working on an online application, a kind of climate app, with which our acquisitors and asset managers can see the most up-to-date climate risk data and include it in their investment advice. Because of the consequences of climate change, climate-adaptive buildings are essential.’
Testing for climate risks has become ever more important. The development of our Climate Risk Monitor has been partly dictated by legislation and regulations. Under the Sustainable Finance Disclosure Regulation (SFDR), the financial sector has an obligation to provide information about sustainability.
Actively mapping risks
But even without this legislation, we would have started actively mapping climate risks. We have also worked as closely as possible with widely supported developments. As mentioned, DGBC is working with a broad alliance of financial institutions, knowledge institutes, advisers and governments on the ‘Framework for climate adaptive buildings’.
This includes a straightforward methodology for determining physical climate risks at the level of the individual building. This optimised building scan will be implemented in the Climate Risk Monitor next spring and tested continuously. We at a.s.r. real estate applaud these widely supported initiatives and objectives. After all, tackling the consequences of climate change is primarily a collaboration between the various parties involved, including municipalities and water boards.
That is why we continue to seek cooperation to keep responding to all of these developments.
Marco van der Spank, is a researcher at a.s.r. real estate and part of the ‘Climate Risk Monitor project’
