Climate Adaptation and Resilience in Commercial Real Estate
Citation
Executive Summary
The increasing frequency and severity of devastating climate events requires an urgent reassessment of climate risk and adoption of climate adaptation measures, including for the commercial real estate (CRE) sector.
Climate-related disruptions to the CRE sector are projected to rise, resulting in major asset losses and significant social impacts.
For example, following the 2013 floods in Alberta, more than 150,000 people could not access their office space in downtown Calgary for approximately two weeks. This disruption translated to the loss of approximately 5.1 million work hours and $500 million dollars in GDP [8]. These estimates do not include other related costs, such as the impact on local real estate investments, the cost of damages, potential lawsuits, insurance ratings, credit ratings, and the distress caused to disrupted tenants and the broader community.
The CRE sector is determined to address these risks through climate adaptation planning. This is motivated by many factors, including business continuity, support of tenants, protection of future and current investments and long-term value, and alignment with environmental, social and governance (ESG) disclosure frameworks and evolving best practice.
Extensive resources exist to support climate adaptation for municipalities, communities and critical infrastructure. Yet, there remains little comprehensive technical content addressing adaptation specifically for the CRE sector in Canada.
This report aims to help fill that gap. It includes a literature review of available resources, a gap analysis, and recommendations on how to support climate adaptation and resilience for CRE. A summary of those recommendations are listed below:
- Consider the development of a CRE-specific toolkit to support climate adaptation and resilience planning. Toolkits should highlight relevant climate data, and include resources for both asset-based and capabilities-based approaches, such as climate risk assessments and hazard-specific guidelines.
- Develop and share resources to address barriers and support enabling factors. These resources can include guidelines for business case creation, opportunities for adaptation and mitigation co-benefits, and relevant disclosure frameworks.
- Conduct further research on the identified gaps. This study was limited to a desktop literature review, so additional gaps may be filled by interviewing risk practitioners, academics, researchers, CRE organizations, builders, trades and tenants. Getting wide representation from different communities across Canada and internationally would provide further insight.
Authors
- Alanna Komisar, MEng, BASc, CEM, Mantle Developments
- Michael Chen, MGA, BA, Mantle Developments
- Ryan Zizzo, MASc, LEED AP ND, Mantle Developments
Project Advisory Panel
- Bala Gnanam, BOMA Canada
- Claudia Verno, JLL
- Darryl Neate, REALPAC
- Hazel Sutton, JLL
- Michael Brooks, REALPAC
- Peter Kennedy, Aon
- Victoria Papp, BOMA Canada
- Jennifer Teague, CSA Group
- Priya Patel, CSA Group
- Scott Grant, CSA Group (Project Manager)
- Vanessa Mitchell, CSA Group
Disclaimer
This work has been produced by Mantle Developments and is owned by Canadian Standards Association. It is designed to provide general information about the subject matter covered. The views expressed in this publication are those of the authors. Mantle Developments and Canadian Standards Association are not responsible for any loss or damage that might occur as a result of reliance on, or use of, the content in this publication.
Copyright
© 2023 Canadian Standards Association. All rights reserved.
