From rising temperatures and flooding to storms and water stress, climate-related hazards are shaping investment decisions, asset performance and long-term value. As regulatory expectations increase and investors hone in on ESG, the need for a consistent, practical approach to assessing and managing these risks has never been clearer.
INREV’s new paper, ‘Physical climate risk in real estate’, provides a practical guide to help investors, investment managers and service providers navigate the assessment of physical climate risks at both asset and portfolio levels.
The paper highlights:
- How physical climate risks are increasing and can materially affect building performance, value and insurability.
- Regulations and evolving stakeholder expectations are expanding the assessment of climate hazards and resilience.
- A step-by-step approach to bring comparability and structure to assessing hazard, exposure and asset vulnerability across portfolios.
- Strategic adaptation measures to improve resilience and protect long-term value.
Alongside the paper, here are three INREV member case studies showcasing practical approaches to climate risk assessment and adaptation:
- Edmond de Rothschild REIM: Using physical climate risk analysis to support EU Taxonomy alignment across logistics and industrial assets.
- Real I.S. Group: Assessing an office building in Hamburg with high water-related risks, and determining resilience measures through protective systems.
- Swiss Life Asset Managers: Integrating mitigation and adaptation measures under CAPEX constraints and identifying low-cost solutions that also enhance energy performance.
Together, the paper and case studies provide practical, real-world guidance to help members take the first steps in strengthening climate resilience across their portfolios.
Download the paper or case studies below to discover how a more systematic approach can support resilience across your real estate portfolios, or visit our ESG theme page for more sustainability-related resources.
Physical climate risk in real estate
Published on 09 Dec 2025
EU Taxonomy alignment supported by physical climate risk analysis - Edmond de Rothschild REIM case study
Published on 09 Dec 2025
Edmond de Rothschild REIM assessed 16 logistics and industrial assets in the Netherlands and Germany to achieve EU Taxonomy alignment. With no EPC labels available for logistics areas, the team used BREEAM In Use energy ratings and Energy Performance Contracts to demonstrate energy performance. Physical climate risks were analysed through MunichRe’s risk scan and the Climate Effect Atlas. Asset level adaptation plans and external certification via DGBC and BREEAM v6.1 provided clear, verifiable assurance for investors.
Physical risk assessment of an office building with high exposure to water risk - Real I.S. Group case study
Published on 09 Dec 2025
Real I.S. assessed the physical climate risks of an office building in Hamburg, located directly on the Elbe River - an area exposed to sea level rise and flooding. Using MunichRe’s Location Risk Intelligence tool and a detailed vulnerability assessment, the team evaluated how potential flood events could impact the building’s structure, systems and usability. Despite the high risk at the location, built-in protection systems such as dam barriers, flood protection doors, sealed windows and pumps resulted in a very low vulnerability rating, demonstrating strong asset-level resilience.
Future-proofing assets: Merging adaptation and mitigation under CAPEX constraints - Swiss Life Asset Managers case study
Published on 09 Dec 2025
Swiss Life Asset Managers assessed the physical climate risks of a 1992 office building in Paris while operating under strict CAPEX limits. Using climate risk analyses from Deepki, Swiss Re and R4RE Batadapt, the team identified low cost resilience measures that aligned with an existing 5 million euro renovation plan. Ninety seven percent of adaptation actions also improved energy efficiency, avoiding additional spending. The project shows how combining adaptation and mitigation supports compliance with Décret Tertiaire and CRREM pathways while keeping investment within budget.