Real Estate Case Study: Assessing Physical Climate Risks & Resilience
How an Investment Management Firm Safeguards Global Portfolio Value
Integrating Physical Risk and Adaptation across the Investment Cycle
Firms risk asset devaluation and financial losses due to climate-related disasters like flood and wildfire. Ignoring climate risk isn't an option anymore.
Find out how our client quickly and accurately identified risk and adaptation measures to protect asset value and shareholders' return.
The Client
Global Commercial Real Estate Investment Firm based in the US
This Client is one of the world's largest Real Estate Firms, investing in a diverse portfolio of quality commercial properties and other real estate assets both in the United States and internationally.
Their portfolio spans industrial, residential, office, and retail sectors across 30 countries.
As part of their ESG strategy, they aim to integrate environmental and social impacts into their Investment Committee's asset review process. This involves incorporating climate risk and adaptation metrics to enhance the resilience of their assets and overall business.
Why focus on Climate Risk?
The Intrinsic Value of Climate Risk Analysis in Real Estate
Physical climate risks have costly, direct financial implications for property values and operational viability, as well as secondary effects on insurance costs, property taxes, mortgage rates, tenant dynamics, and lease implications.
These risks can dramatically alter properties’ value, safety and functionality.
For this reason, integrating climate risk assessments into the investment cycle process safeguards the property long-term value, return on capital and ensures the Firm's sustainable growth.
What's the Client Challenge?
Integrating Climate Risks to the Asset Investment Cycle
This Global Real Estate Investment Leader seeks a partner capable of providing asset-level insights into physical climate risks and adaptation.
The Client's ambition is to fully embed climate risk into their investment cycle process, rolling out the solution globally to their Deal, Fund Management, ESG, Research and Risk Management teams for underwriting and managing projects and assets.
The goal is to ensure the systematic identification of risks, avoid asset devaluation and ensure sustainable business growth.
What's the Solution?
The Innovative Climate Risk and Adaptation Platform
The Client integrated Climate X's solutions, gaining visibility of risks and opportunities across the Investment Cycle - from hazard identification to financial impact analysis and adaptation strategies.
Advanced Physical Climate Risk |
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Adaptation & Resilience |
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Model Transparency |
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Granularity |
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Integrations:
- Access via SaaS platform (Web UI) or Enterprise API.
Input:
- Asset Address research (platform-only).
- Portfolio upload via .csv (platform and Enterprise API).
- Polygon shape upload for large infrastructure projects or large assets (platform and Enterprise API).
Enterprise API:
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Unlock Spectra’s Full Power with Our Scalable API
- Scale your analysis effortlessly with support for up to 100K input assets.
- Seamlessly integrate Spectra into your existing risk management frameworks.
- Perform climate physical risk assessments at both asset and portfolio scales.
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Boost Your Analysis Potential
- Experience all the features and insights of Spectra, now with enhanced scalability.
- Designed to handle the data volumes that match your business needs.
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Accessible for All Users
- Simple, user-friendly design keeps the API approachable for non-developers.
- Comprehensive API documentation to streamline your integration.
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Scale Smarter, Analyze Faster
- Get more out of Spectra with a powerful API that grows with your business.
Climate Scenarios:
- CMIP5 RCPs: 2.6, 4.5, 6.0, 8.5.
- CMIP6 SSPs: 1, 2, 3, 5.
- Includes "high emission" scenarios.
- Toggle Flood Defenses.
Time Horizons
- Short, Medium & Long-Term Time Horizons.
- 2020 to 2100: In 5-year intervals to 2050, 10-year intervals thereafter.
Resolution
- Granular resolutions up to 30m, depending on the hazard.
Geographical Coverage
- Main global economies, covering 85% of world GDP.
Outputs
- Hazard score and risk volume distribution at asset and portfolio level.
- Confidence, probability and severity metrics.
- Annual losses in monetary value and percentage.
- Data at Unit level for residential properties.
- Company-wide business disruption risk (managed service).
Certifications
- ISO27001 certified: Information Security, Cybersecurity and Privacy Protection.
- ISO14001 certified: Environmental Management Systems
Why the Client chose Climate X
This is a complete Climate Risk Platform built for Real Estate
With Climate X, the Client effectively gained full visibility of risks across their global portfolio with a solution tailored to Real Estate needs.
First, Climate X’s depth and breadth of data helped the client uncover risk exposure across their global investments. These insights enabled them to allocate capital strategically, shape investment planning and identify CapEx requirements for adaptation measures.
Second, the adaptability of Climate X's platform allowed them to customize input building data for more accurate physical loss calculations, which in turn impact insurance costs and retrofit needs.
Third, Climate X’s seamless integration with the firm’s systems enabled them to effectively embed physical risk assessment and adaptation to their processes.
Finally, the intuitive and user-friendly platform made Climate X the ideal choice.
The Result
The Firm can now protect its Operations, Margins & Reputation from Climate Risks
Integrating Spectra and Adapt into the Client's operations transformed how the Firm approaches its due diligence and investment processes.
The Firm can now systematically identify and mitigate risks on its Commercial Real Estate portfolio, enhancing risk assessment precision and forward-looking evaluations of insurance premiums, asset values, rent yields, and retrofit needs.
Finally, the Firm's commitment to tackling climate risks with our solutions can be showcased in their annual reports, improving their reputation in sustainable Real Estate investment, cultivating trust among investors and stakeholders.
Improved
Investment Decisions
Systematic Identification
of Risks
Improved
Reputation and Investor Trust
About Climate X
Climate X combines innovation and sustainability, providing expertise in Physical Risk analysis for Real Estate, Asset Management and Financial Services.
Our climate tech solutions Spectra and Adapt help firms become more resilient to the impacts of climate change by quantifying, at an asset level, the probability and severity of weather events decades before they happen and supporting the planning of adaptation measures.
Press Release
CBRE expands Climate Risk assessment capabilities with Climate X
