Managing Transition Risk in Real Estate: Aligning to the Paris Climate Accord

Published March 2022

Real estate faces significant transition risks as economies decarbonize. To mitigate the impact of potential transition risks, financial institutions active in this sector must be proactive.

This report assesses the state of real estate assets and the challenges the sector faces to align to net zero. It provides insights on the climate challenges confronting the real estate sector, and recommendations for addressing them.

To develop this resource, a dozen real estate investors and banks piloted the Carbon Risk Real Estate Monitor (CRREM) tool as part of UNEP FI’s Task Force on Climate-related Financial Disclosures (TCFD) programme. The report authors document the experience of participating financial institutions and illustrate how the CRREM tool can be deployed to effectively measure and manage real estate transition risks. Their findings reveal both the opportunities and the risks for financial institutions investing in real estate assets.

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This project builds on work done by UNEP FI’s Property Working Group, now convened by the Principles for Responsible Investment (PRI). Find out more here.

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