Investa continues to demonstrate leadership in assessing the physical and transitional risks posed by climate change, conducting climate change scenario analysis across its portfolio of assets out to 2030.
The office management platform has partnered with the UN Environment Programme’s Finance Initiative (UNEP FI) to contribute to a global Taskforce on Climate related financial disclosures (TCFD) Report and investor guide to scenario-based climate risk assessment.
Investa is proud to be one of twelve institutional investors included in the initiative. Collectively over US$78 billion in AUM is represented by the group.
Each of the 12 organisations contributed to the design and application of a scenario analysis methodology for assessing the impact of physical and transition climate risks and opportunities in the real estate sector.
It discloses a ‘climate value at risk’ or CVaR posed by climate change to the total portfolio of approximately 1,000 assets scattered around the globe.
The Report allows international peers to focus on the elements of climate risk most important to their investors.
“We are proud of our contribution to a leading international response to the TCFD and are looking forward to continued analysis and the resultant financial disclosure, in accordance with the Taskforce’s final recommendations” said Nina James, General Manager of Responsible Investment.
Launched in Europe, the Report (available here) considers the climate risk and opportunities for mitigation, specific to the building and construction sectors. These industries are responsible for approximately one third of global energy consumption.
Investa’s case study can be found on page 43 of the report. It focuses on Investa’s climate change mitigation activities to date, most notably, a 61% reduction in emissions intensity since 2004.
It also covers the strategic imperative of understanding the ways in which climate change transitional risks will affect buildings of varying ages differently.
“The challenges facing the real estate sector are clear. Investors that anticipate regulatory or market pressure to reduce emissions, and that have clearer models on their asset’s exposure to extreme weather and the capital planning needed to harden those assets, will be better positioned to increase asset value," Eric Usher, head of the UNEP Finance Initiative said.
Real estate is of particular interest due to its illiquidity compared to many other asset types, permanent physical locations and long investment cycles.
The Report is a follow up to the ‘Changing Course’ Report published by the UNEP FI in May this year. Investa also contributed to this Report.