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Be prepared – exploring future climate-related risk for residential and commercial real-estate portfolios

Surminski, Swenja, Westcott, Mark, Ward, John, Sayers, Paul, Bresch, David and Clare, Bronwyn (2020) Be prepared – exploring future climate-related risk for residential and commercial real-estate portfolios. Journal of Alternative Investments, 23 (1). pp. 24-34. ISSN 1520-3255

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Identification Number: 10.3905/jai.2020.1.100

Abstract

This paper explores how real-estate investors and lenders can assess and manage the physical risks of climate change through well-established risk models and climate scenarios. We propose a methodology that real-estate investors and lenders can use to improve their understanding and management of these risks. The methodology is applied to a sample of 12 real-estate portfolios with a total market value in excess of £2 trillion, spread across Europe, North and South America and Asia, investigating the impacts of climate change on losses from floods and winter storms (UK) as well as tropical cyclones (North America and the Pacific Rim). The estimated changes in risk, especially in the climate scenario most aligned with the current warming trajectory, raises important questions for investors, lenders, insurers and policymakers as to how these new levels of risk can be managed in the most cost-effective manner.

Item Type: Article
Official URL: https://jai.pm-research.com/
Divisions: Geography & Environment
Grantham Research Institute
Date Deposited: 28 Jan 2020 13:06
Last Modified: 05 Aug 2020 14:27
URI: http://eprints.lse.ac.uk/id/eprint/103193

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