ULI C Change Transition Risk Assessment Guidelines
The ULI C Change Transition Risk Assessment Guidelines outline a standardised approach to assess and disclose climate transition risks as part of property valuations. We believe the adoption of these guidelines by owners and managers in the industry can help remove a critical barrier and enable us to accelerate the transition to a low-carbon economy.
With the built environment contributing around 37%1 of global carbon emissions in 2022, it is clear that without effective transition risk management both the environment in which buildings can thrive and the $11.12 trillion investment industry that builds and maintains them is at stake.
The proper integration of transition risks holds the key to galvanising action on decarbonisation – of the asset itself and its interdependent infrastructure.
At present, transition risks, such as the cost of decarbonisation and additional resources needs, are known to be impacting the value of property. However, without a standardised method by which to assess it, there is risk of informed investors divesting carbon-heavy portfolios or assets to less sophisticated purchasers, which are less educated on the risks concerning the decarbonisation of real estate. As a result, there is a risk of larger numbers of assets stranding as they are not able to make the financial business case for the transition.
The guidelines are intended to be used by asset owners and managers when conducting asset and portfolio level assessments. They also include associated disclosure templates, which are intended to enable standardised disclosure of transition risks between (i) transacting entities, (ii) with the valuation services industry and, (iii) to report to institutional investors and other stakeholders.
These guidelines were developed with the collaboration of contributors from more than 75 companies and industry bodies, as well as the support of the ULI C Change Partners and the ULI Europe Sustainability Council. For more information, please visit the C Change webpage.
Report Summary: The ULI C Change Transition Risk Assessment Guidelines outline a standardised approach to assess and disclose climate transition risks as part of property valuations. We believe the adoption of these guidelines by owners and managers in the industry can help remove a critical barrier and enable us to accelerate the transition to a low-carbon economy.
With the built environment contributing around 37%1 of global carbon emissions in 2022, it is clear that without effective transition risk management both the environment in which buildings can thrive and the $11.12 trillion investment industry that builds and maintains them is at stake.
The proper integration of transition risks holds the key to galvanising action on decarbonisation – of the asset itself and its interdependent infrastructure.
At present, transition risks, such as the cost of decarbonisation and additional resources needs, are known to be impacting the value of property. However, without a standardised method by which to assess it, there is risk of informed investors divesting carbon-heavy portfolios or assets to less sophisticated purchasers, which are less educated on the risks concerning the decarbonisation of real estate. As a result, there is a risk of larger numbers of assets stranding as they are not able to make the financial business case for the transition.
The guidelines are intended to be used by asset owners and managers when conducting asset and portfolio level assessments. They also include associated disclosure templates, which are intended to enable standardised disclosure of transition risks between (i) transacting entities, (ii) with the valuation services industry and, (iii) to report to institutional investors and other stakeholders.
These guidelines were developed with the collaboration of contributors from more than 75 companies and industry bodies, as well as the support of the ULI C Change Partners and the ULI Europe Sustainability Council. For more information, please visit the C Change webpage.