Transition risk-adjusted valuation
Intervention point
By standardising the treatment and disclosure of transition risks, the real estate industry can account for the true costs of decarbonisation, enabling investment into retrofit and the development of sustainable assets.
Current situation
Buildings are responsible for 37 percent of global CO2e emissions and with 80 percent of the 2050 building stock already existing today, Europe is in desperate need of retrofitting at scale.
Tackling the retrofit challenge has increasingly become a priority on the agenda of the European Commission, as demonstrated at a regional level with the Renovation Wave for Europe, but also in individual member countries. For example, a minimum EPC standard for office buildings was implemented in the Netherlands in January 2023.
However, despite the increase in government intervention, there is no regulation that ensures owners and managers achieve net zero within the necessary timeframe. Instead, different parts of the industry including investors, managers and occupiers are driving change. This lack of regulation is hindering effective change as it results in valuers being unable to include the costs of decarbonising buildings in valuations.
ULI C Change has been at the forefront of addressing transition risk-adjusted valuation. Throughout the second half of 2022 and beginning of 2023, ULI conducted a multi-stakeholder consultation to identify the key transition risks the industry will be facing. The final Transition Risk Assessment Guidelines were published in June 2023.
How to get involved
The consultation period for the Transition Risk Assessment Guidelines for Consultation has finished. The The final version was released in June 2023 and can be viewed here.
For more information about possibilities to get involved, please contact sophie.chick@uli.org
Interested in finding out more? Click here to download the full technical briefing.
Not yet a ULI member? Click here to join.
Last updated: July 2023
Connected interventions
