Climate Risk Management

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The usefulness and necessity of climate risk management on real estate

Real estate development remains an interesting investment for investors, but is increasingly exposed to climate risks. Research and practice increasingly show the greater impact of climate change on the real estate sector. Sound climate risk management will therefore play a more important role in the future. What does such risk management look like, where does the responsibility lie, which investments does it require and what does this mean for the returns of investors? [/fusion_text][/fusion_builder_column][fusion_builder_column type=”1_2″ layout=”1_2″ align_self=”auto” content_layout=”column” align_content=”flex-start” content_wrap=”wrap” spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” type_medium=”” type_small=”” order_medium=”0″ order_small=”0″ dimension_spacing_medium=”” dimension_spacing_small=”” dimension_spacing=”” dimension_margin_medium=”” dimension_margin_small=”” margin_top=”” margin_bottom=”” padding_medium=”” padding_small=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” hover_type=”none” border_sizes=”” border_color=”” border_style=”solid” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” background_type=”single” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ 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align=”center” margin_top=”” margin_right=”” margin_bottom=”” margin_left=”” lightbox=”yes” gallery_id=”” lightbox_image=”” lightbox_image_id=”” alt=”” link=”” linktarget=”_self” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″]https://fundstarrealestate.com/wp-content/uploads/2021/03/article5-1.jpg[/fusion_imageframe][/fusion_builder_column][fusion_builder_column type=”1_1″ layout=”1_1″ align_self=”auto” content_layout=”column” align_content=”flex-start” content_wrap=”wrap” spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” type_medium=”” type_small=”” order_medium=”0″ order_small=”0″ dimension_spacing_medium=”” dimension_spacing_small=”” dimension_spacing=”” dimension_margin_medium=”” dimension_margin_small=”” margin_top=”” margin_bottom=”” padding_medium=”” padding_small=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” hover_type=”none” border_sizes=”” border_color=”” border_style=”solid” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” background_type=”single” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_type=”regular” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ last=”true” border_position=”all” first=”true”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” content_alignment_medium=”” content_alignment_small=”” content_alignment=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” font_size=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” line_height=”” letter_spacing=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]Increasingly, the return on real estate investments is endangered by climate change. For example, natural disasters and extreme weather conditions are increasingly exposing the vulnerability of real estate. Despite this, many new construction and investment projects are still being set up in high-risk and vulnerable locations.

Due to the increasing risk of climate disasters worldwide, insurance premiums are rising and, partly as a result, real estate prices. In addition, there are also less visible climate risks, such as depreciation due to stricter environmental legislation.

Does this make investing in real estate less interesting for the future? Not if timely consideration is given to effective climate risk management, which will have to be embraced as an extra dimension of area development and property management.

To understand how climate risk management can be designed, it is important to explain the two main risks; physical and transition risks.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container][fusion_builder_container hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” hundred_percent_height_center_content=”yes” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” status=”published” publish_date=”” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” video_preview_image=”” border_color=”” border_style=”solid” margin_top=”” margin_bottom=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” type=”flex”][fusion_builder_row][fusion_builder_column type=”1_2″ layout=”1_1″ spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” hover_type=”none” border_color=”” border_style=”solid” border_position=”all” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”” margin_bottom=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” last=”false” border_sizes_top=”0″ border_sizes_bottom=”0″ border_sizes_left=”0″ border_sizes_right=”0″ first=”true” spacing_right=””][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” content_alignment_medium=”” content_alignment_small=”” content_alignment=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” font_size=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” line_height=”” letter_spacing=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

Physical risks

Physical risks relate to all damage from natural disasters such as hurricanes, floods and forest fires. This also includes the negative effects of prolonged drought. Floods are the greatest risk in the Netherlands. Rising sea levels as well as heavy rainfall can hit households in coastal areas and around rivers in particular.

In addition to damage to buildings, an increased risk of flooding can also be detrimental to the price development of real estate projects in a risky area. This effect is clearly reflected in certain areas around New York, for example. The study by Eichholtz, Steiner and Yönder shows that after Hurricane Sandy the prices of real estate there fell permanently. The same price effect can be seen in areas where wildfires occur regularly, such as in California.[/fusion_text][/fusion_builder_column][fusion_builder_column type=”1_2″ layout=”1_2″ align_self=”auto” content_layout=”column” align_content=”flex-start” content_wrap=”wrap” spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” type_medium=”” type_small=”” order_medium=”0″ order_small=”0″ dimension_spacing_medium=”” dimension_spacing_small=”” dimension_spacing=”” dimension_margin_medium=”” dimension_margin_small=”” margin_top=”” margin_bottom=”” padding_medium=”” padding_small=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” hover_type=”none” border_sizes=”” border_color=”” border_style=”solid” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” 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bordersize=”2″ bordercolor=”#607d8b” borderradius=”10px” align_medium=”none” align_small=”none” align=”center” margin_top=”” margin_right=”” margin_bottom=”” margin_left=”” lightbox=”yes” gallery_id=”” lightbox_image=”” lightbox_image_id=”” alt=”” link=”” linktarget=”_self” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″]https://fundstarrealestate.com/wp-content/uploads/2021/03/article5-2.jpg[/fusion_imageframe][/fusion_builder_column][fusion_builder_column type=”1_1″ layout=”1_1″ align_self=”auto” content_layout=”column” align_content=”flex-start” content_wrap=”wrap” spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” type_medium=”” type_small=”” order_medium=”0″ order_small=”0″ dimension_spacing_medium=”” dimension_spacing_small=”” dimension_spacing=”” dimension_margin_medium=”” dimension_margin_small=”” margin_top=”” margin_bottom=”” padding_medium=”” padding_small=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” hover_type=”none” border_sizes=”” border_color=”” border_style=”solid” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” background_type=”single” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_type=”regular” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ last=”true” border_position=”all” first=”true”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” content_alignment_medium=”” content_alignment_small=”” content_alignment=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” font_size=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” line_height=”” letter_spacing=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]Investors as well as insurers are increasingly looking at weather models, in order to map the probability of flooding in specific areas. The greater the likelihood of climate disasters, the greater the risk of property depreciation and, at the same time, an increasing likelihood that insurance premiums for properties in these risk areas will increase significantly.

Due to climate change, storms in the Netherlands are also expected to become increasingly erratic and experts are not ruling out hurricanes in the future, as well as more severe wildfires as a result of prolonged drought.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container][fusion_builder_container hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” hundred_percent_height_center_content=”yes” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” status=”published” publish_date=”” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” video_preview_image=”” border_color=”” border_style=”solid” margin_top=”” margin_bottom=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” type=”flex”][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” hover_type=”none” border_color=”” border_style=”solid” border_position=”all” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”” margin_bottom=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” last=”true” border_sizes_top=”0″ border_sizes_bottom=”0″ border_sizes_left=”0″ border_sizes_right=”0″ first=”true”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” content_alignment_medium=”” content_alignment_small=”” content_alignment=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” font_size=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” line_height=”” letter_spacing=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

Transition Risks

The second aspect is transition risks. This risk arises from the transition to a CO2 neutral economy. Stricter legislation and environmental requirements can directly lead to a reduction in the value of older real estate objects in particular. A concrete example are the introduced energy labels, whereby all office buildings in the Netherlands must have at least energy label C from 2023. offices-% E2% 80% 93-state-of-affairs-mid-2020 “> Netherlands Enterprise Agency (RVO) shows that 34% of the offices currently have an energy label C or better. Subsequently, the Dutch government wants energy label A to become the standard for office buildings in its own country from 1 January 2030.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container][fusion_builder_container hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” hundred_percent_height_center_content=”yes” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” status=”published” publish_date=”” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” video_preview_image=”” border_color=”” border_style=”solid” margin_top=”” margin_bottom=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” type=”flex”][fusion_builder_row][fusion_builder_column type=”1_1″ layout=”1_1″ spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” hover_type=”none” border_color=”” border_style=”solid” border_position=”all” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”” margin_bottom=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” last=”true” border_sizes_top=”0″ border_sizes_bottom=”0″ border_sizes_left=”0″ border_sizes_right=”0″ first=”true”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” content_alignment_medium=”” content_alignment_small=”” content_alignment=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” font_size=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” line_height=”” letter_spacing=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

Perspectives for climate risk management

The biggest issue of climate risk management is: How can the real estate sector limit the risks of damage and depreciation as a result of climate change as much as possible?

To formulate an answer to this question, climate risk management can be approached from mainly three angles:

  • Definition and valuation – How are climate risks mapped out and what is the need for management thereof?
  • Responsibility – Who, when, is responsible for managing climate risks and how are the interests divided?
  • Cost and benefit analysis – What are the costs of investments for climate risk management and how does this affect the (future) return for real estate investors?

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Definition and evaluation

Mapping climate risks is not only important to determine the nature of the risks, but also to clarify location-based risks. Properties on the coast can face different risks than properties in the interior. And to what extent is an older property vulnerable to depreciation due to transition risks?

A risk analysis can then determine the need to anticipate this. For example, is there a one-off exceptional situation or is there a fixed climate trend?[/fusion_text][/fusion_builder_column][fusion_builder_column type=”1_2″ layout=”1_2″ align_self=”auto” content_layout=”column” align_content=”flex-start” content_wrap=”wrap” spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” type_medium=”” type_small=”” order_medium=”0″ order_small=”0″ dimension_spacing_medium=”” dimension_spacing_small=”” dimension_spacing=”” dimension_margin_medium=”” dimension_margin_small=”” margin_top=”” margin_bottom=”” padding_medium=”” padding_small=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” hover_type=”none” border_sizes=”” border_color=”” border_style=”solid” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” 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Responsibility

It is important for real estate to determine who is responsible for managing climate risks. In this way clarity is created and unnecessary discussions afterwards avoided.

By designating someone for this, they can be accounted for at other levels. For example, an (external) accountant has an important responsibility in making the status of an organization transparent with regard to material and financial risks of the real estate.

It is also crucial to properly distribute interests and to ensure that the right people have sufficient knowledge. For example, a Supervisory Board or Supervisory Board members must be aware of the responsibility it bears. The Supervisory Board or Supervisory Board should regularly check itself whether it has sufficient knowledge and experience in the field of legislation and regulations relating to climate change. In this way we can work towards the long-term objectives of the organization.[/fusion_text][/fusion_builder_column][fusion_builder_column type=”1_1″ layout=”1_1″ align_self=”auto” content_layout=”column” align_content=”flex-start” content_wrap=”wrap” spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” type_medium=”” type_small=”” order_medium=”0″ order_small=”0″ dimension_spacing_medium=”” dimension_spacing_small=”” dimension_spacing=”” dimension_margin_medium=”” dimension_margin_small=”” margin_top=”” margin_bottom=”” padding_medium=”” padding_small=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” hover_type=”none” border_sizes=”” border_color=”” border_style=”solid” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” background_type=”single” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_type=”regular” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ last=”true” border_position=”all” first=”true”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” content_alignment_medium=”” content_alignment_small=”” content_alignment=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” font_size=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” line_height=”” letter_spacing=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]Investors as well as insurers are increasingly looking at weather models, in order to map the probability of flooding in specific areas. The greater the likelihood of climate disasters, the greater the risk of property depreciation and, at the same time, an increasing likelihood that insurance premiums for properties in these risk areas will increase significantly.

Due to climate change, storms in the Netherlands are also expected to become increasingly erratic and experts are not ruling out hurricanes in the future, as well as more severe wildfires as a result of prolonged drought.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container][fusion_builder_container hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” hundred_percent_height_center_content=”yes” equal_height_columns=”no” menu_anchor=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” status=”published” publish_date=”” class=”” id=”” background_color=”” background_image=”” background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ video_mp4=”” video_webm=”” video_ogv=”” video_url=”” video_aspect_ratio=”16:9″ video_loop=”yes” video_mute=”yes” video_preview_image=”” border_color=”” border_style=”solid” margin_top=”” margin_bottom=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” type=”flex”][fusion_builder_row][fusion_builder_column type=”1_2″ layout=”1_1″ spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” class=”” id=”” background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” hover_type=”none” border_color=”” border_style=”solid” border_position=”all” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” margin_top=”” margin_bottom=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” last=”false” border_sizes_top=”0″ border_sizes_bottom=”0″ border_sizes_left=”0″ border_sizes_right=”0″ first=”true” spacing_right=””][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” content_alignment_medium=”” content_alignment_small=”” content_alignment=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” font_size=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” line_height=”” letter_spacing=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]

Cost and benefit analysis

Climate change leads to new laws and regulations. Consider, for example, the aforementioned energy labels for office buildings. Based on their own research, the Economic Institute for Construction (EIB) and Energy Research Center of the Netherlands (ECN) state that the costs of upgrading an office building with an F-label or higher to a C-label costs approximately 15 euros per square meter. For a building with energy label G, the costs for an upgrade to C are between 39 and 71 euros per square meter.

Organizations should also consider the costs associated with climate change. Suppose that certain real estate is dependent on a local energy network, it is advisable to calculate the costs for generators as a backup and to compare these against the costs in the event of a power outage due to a storm or flood.[/fusion_text][/fusion_builder_column][fusion_builder_column type=”1_2″ layout=”1_2″ align_self=”auto” content_layout=”column” align_content=”flex-start” content_wrap=”wrap” spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” type_medium=”” type_small=”” order_medium=”0″ order_small=”0″ dimension_spacing_medium=”” dimension_spacing_small=”” dimension_spacing=”” dimension_margin_medium=”” dimension_margin_small=”” margin_top=”” margin_bottom=”” padding_medium=”” padding_small=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” hover_type=”none” border_sizes=”” border_color=”” border_style=”solid” border_radius=”” 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first=”false”][fusion_imageframe image_id=”1275|full” max_width=”” sticky_max_width=”” style_type=”” blur=”” stylecolor=”” hover_type=”none” bordersize=”2″ bordercolor=”#607d8b” borderradius=”10px” align_medium=”none” align_small=”none” align=”center” margin_top=”” margin_right=”” margin_bottom=”” margin_left=”” lightbox=”yes” gallery_id=”” lightbox_image=”” lightbox_image_id=”” alt=”” link=”” linktarget=”_self” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″]https://fundstarrealestate.com/wp-content/uploads/2021/03/article5-4.jpg[/fusion_imageframe][/fusion_builder_column][fusion_builder_column type=”1_1″ layout=”1_1″ align_self=”auto” content_layout=”column” align_content=”flex-start” content_wrap=”wrap” spacing=”” center_content=”no” link=”” target=”_self” min_height=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” type_medium=”” type_small=”” order_medium=”0″ order_small=”0″ dimension_spacing_medium=”” dimension_spacing_small=”” dimension_spacing=”” dimension_margin_medium=”” dimension_margin_small=”” margin_top=”” margin_bottom=”” padding_medium=”” padding_small=”” padding_top=”” padding_right=”” padding_bottom=”” padding_left=”” hover_type=”none” border_sizes=”” border_color=”” border_style=”solid” border_radius=”” box_shadow=”no” dimension_box_shadow=”” box_shadow_blur=”0″ box_shadow_spread=”0″ box_shadow_color=”” box_shadow_style=”” background_type=”single” gradient_start_color=”” gradient_end_color=”” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_color=”” background_image=”” background_image_id=”” background_position=”left top” background_repeat=”no-repeat” background_blend_mode=”none” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=”” filter_type=”regular” filter_hue=”0″ filter_saturation=”100″ filter_brightness=”100″ filter_contrast=”100″ filter_invert=”0″ filter_sepia=”0″ filter_opacity=”100″ filter_blur=”0″ filter_hue_hover=”0″ filter_saturation_hover=”100″ filter_brightness_hover=”100″ filter_contrast_hover=”100″ filter_invert_hover=”0″ filter_sepia_hover=”0″ filter_opacity_hover=”100″ filter_blur_hover=”0″ last=”true” border_position=”all” first=”true”][fusion_text columns=”” column_min_width=”” column_spacing=”” rule_style=”default” rule_size=”” rule_color=”” content_alignment_medium=”” content_alignment_small=”” content_alignment=”” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” class=”” id=”” font_size=”” fusion_font_family_text_font=”” fusion_font_variant_text_font=”” line_height=”” letter_spacing=”” text_color=”” animation_type=”” animation_direction=”left” animation_speed=”0.3″ animation_offset=””]Investments in climate change often do not directly lead to extra returns on real estate, so that investors will be less inclined to invest in them. It is therefore also important to look at the payback period, which partly depends on the current condition of a property. The EIB and ECN estimate the payback time for an improvement to energy label C between 3.5 and 6 years, while an upgrade from energy label B to A can take up to 13.5 years.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

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