Climate risk data allows organizations to become more prepared and resilient to future risks. Why is this important? If you have tuned into the news over the past few years or even months you will notice that natural disasters are causing harm to many communities across the globe. Most recently, Hurricane Helene caused destruction and fatalities across the Southeastern United States. Communities have been destroyed, “making Helene the deadliest hurricane to hit the United States mainland since Hurricane Katrina in 2005.“
These extreme weather events are unfortunately not uncommon today. Even after Hurricane Helene, another hurricane will land in some affected areas later this week. From extreme heatwaves, unprecedented rains and flooding, wildfires, tornados, hurricanes, cyclones, earthquakes, and more, you cannot go a month without hearing of a part of our world being destroyed. We must prepare our world for future catastrophes to minimize the damage to life, infrastructure, and our beautiful world.
Why Extreme Weather Events Are Here to Stay
Extreme weather events or natural disasters are not a new thing. What has changed is the frequency and impact of these events with all signs pointing to climate change as the enabler. See, while our world warms these events are likely to continue getting more extreme and frequent.
In 2023, there were 28 billion-dollar weather and climate disasters, “surpassing the previous record of 22 in 2020, tallying a price tag of at least $92.9 billion.” No place is safe from climate disasters. Of course, where your properties are matters to the risks that they may incur. For example, a property on each coast may have different risks than each other and completely different risks than a property located inland.
Choosing not to implement adaptation strategies will put your properties at risk including:
- Higher maintenance and insurance costs
- Lower tenant demand
- Distruptions to operations leading to lowered revenue and increased costs
- Higher expenses for energy and water
As extreme weather events become more common and climate change progresses it is important to understand your risks, adapt, and prepare.
Data-Driven Insights: Predicting Climate Risks in Real Estate
The damage caused by extreme weather events cannot be curbed altogether. That being said, there are steps that can be taken to make communities and the built environment more resilient in the hopes of minimizing the damage from these disasters.
How can this be done? The secret is in the climate risk data.
Understanding your buildings risks and current performance can help you to know what changes need to be made to improve its function as extreme weather events increase. A “2023 study from PwC found only 23% of executives are planning for disruptions in the next 12 to 18 months.” While many companies understand the risk, 78% of investors and 83% of occupiers identify climate risk as a financial risk, there is still a lot of inaction.
Companies need access to high-quality data that will allow them to make informed decisions for the future. While there is much research on which improvements may be best, to truly understand the impact those improvements will make as well as weighing the costs, prioritizing improvements, and understanding how to make your building more sustainable overall.
From Risk to Opportunity: How Real Estate Can Lead in Climate Preparedness
As climate risks become more frequent, there is an increasing temptation to view them solely as a threat to the real estate industry. However, a shift in perspective reveals a broader opportunity. The industry can not only mitigate these risks but capitalize on them by leading the charge toward climate preparedness. You can view climate adaptation not just as a defensive measure but as a driver of profitability and long-term resilience.
Resilience as a Competitive Advantage
Real estate professionals who embrace climate resilience stand to differentiate themselves in an increasingly competitive market. Properties designed or retrofitted with climate risks in mind—whether through flood-resistant materials, energy-efficient designs, or smart infrastructure—will be more attractive to tenants, investors, and insurers.
As extreme weather events become more frequent, buildings that are demonstrably more capable of withstanding these conditions will have a distinct market advantage, driving higher occupancy rates and property values.
Unlocking New Investment Channels
In the world of investments, sustainable properties are becoming more attractive. ESG criteria is becoming a more crucial part of investment decisions, especially in real estate. Investors are increasingly seeking sustainable and climate-resilient properties as part of their portfolios, recognizing that buildings with robust adaptation strategies are more likely to retain long-term value.
What does this mean for you? Your properties may be more appealing to investors. Investors prioritizing long-term, lower-risk assets will find properties that proactively address climate risks to be a great fit.
Enhancing Profitability Through Sustainability
Sustainable buildings are getting recognized as not only good for the environment but good for business with lower operational costs. Energy-efficient systems reduce utility expenses, while durable materials and smart technologies can lower maintenance and repair costs over time.
Leveraging Technology for Future-Proofing
The integration of technology—such as AI-powered data platforms and real-time climate risk assessments—allows the industry to not only prepare for future risks but also respond in real time as conditions change. At ScriptString we provide valuable insights into energy consumption, climate-related vulnerabilities, and more enabling better decision-making and proactive risk management.
By investing in these technologies now, real estate companies can ensure their assets remain viable and competitive for decades to come. They have the chance to position themselves as leaders in a climate-resilient future.
The New Normal: Adapting Real Estate to Frequent Climate Risks
As extreme weather events become more common, real estate professionals must accept the industry’s new normal. The key to thriving in this reality is data. Climate risk data unlocks the ability to make informed decisions about where to invest, how to build, and when to upgrade. It empowers property owners and operators to anticipate future challenges, evaluate risks, and take proactive steps to safeguard their assets.
There is an increase in regulatory frameworks, such as the IFRS S1 & S2, pushing for transparency in climate risk reporting. Companies that integrate climate risk data into their strategies will not only ensure compliance but will also gain a competitive edge by demonstrating foresight and responsibility.
At ScriptString, we help real estate professionals harness the power of data to drive sustainability and resilience. Our AI-driven platform makes it easier for property managers to stay ahead of evolving regulations while making smarter, future-proofed investments. In a world where climate risks are escalating, forward-thinking strategies rooted in data are essential to navigating the challenges ahead and securing long-term success. Contact us today to get started!
