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CRE’s ESG Retreat Masks Growing Spending On Climate Risk
['Patrick Sisson']
Bisnow News Feed
Although the days of corporate pushes for environmental, social and corporate governance-based investing have waned, climate risk data is an increasingly hot commodity for commercial real estate.
“Climate risk is moving from a secondary ESG consideration to a core underwriting input,” said Jeremy Porter, chief economist at First Street, a nonprofit that provides climate risk modeling for assets involving incidents such as floods, heat and severe storms.
The climate risk assessment industry, which includes a few hundred firms, is poised to double to roughly $13B in value by 2030, according to Boston Consulting.
“Real estate investors are now mostly including it in their process, which is a big deal,” said Joseph Sumberg, head of real estate at Galvanize.
Contemporary climate modeling is evolving, both due to new technologies and the realization that a once-stable climate is becoming more and more erratic.