As physical climate risks become a more prominent consideration in real estate investment, ensuring clarity around how these risks are assessed remains a critical challenge. INREV’s latest paper in its Physical climate risk series builds on earlier work to improve transparency and comparability across the market.
Developed in collaboration with the INREV Sustainability Committee, this second paper focuses on mapping how data flows between key stakeholders and identifying the information needed to support more consistent approaches to physical climate risk assessment. The aim is to create a clearer picture of how data inputs, methodologies and outputs interact across the investment lifecycle.
The paper highlights:
- Greater transparency around data inputs, methodologies and outputs can improve comparability across investors, managers, lenders and service providers
- Physical climate risk assessments are increasingly used beyond regulatory reporting to support investment decisions, asset management and investor reporting
- Investor expectations vary, from high-level validation to detailed asset-level analysis and quantitative risk metrics
- Outcomes vary significantly depending on assumptions such as climate scenarios, time horizons and hazard definitions
- Data flows between multiple stakeholders, underlining the need for clearer structure and alignment
- Good practice data requirements are outlined to support more consistent and comparable assessments
By bringing these elements together, the paper contributes to a more structured understanding of how physical climate risk data is generated, shared and used. It represents a further step towards improving alignment across the industry and enabling more effective integration of climate risk into real estate investment processes.
Read the full paper below to explore how greater transparency can strengthen physical climate risk assessment.
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