Climate Excellence for Real Estate

Your expert for questions

Dr. Anne Michaels

Dr. Anne Michaels
Senior Manager, PwC Germany
Tel: +49 40 63782599
E-Mail

Your concern

What climate change means for the real estate industry

The consequences of climate change are hitting the real estate sector particularly hard. The reason: buildings are responsible for around 35 percent of global CO2 emissions. In order to achieve the goals of the Paris Climate Agreement for limiting global warming to less than 2 degrees, around 75 percent of existing properties in the European Union alone would have to be renovated to make them more energy-efficient. The current renovation rate of around one percent would have to be drastically increased accordingly.

Regulatory initiatives such as the Renovation Wave or the Sustainable Finance Taxonomy of the European Commission, as well as market-driven recommendations such as the Principles for Responsible Investment (PRI), are putting high pressure on companies to minimize their (financial) risks and secure their future viability and competitive position.

According to the EU Commission, this transformation will require an annual investment of 275 billion euros in the energy refurbishment of buildings by 2030. These investments have a massive impact on the value and performance of real estate portfolios, but also offer great opportunities in a changing market.

Real estate companies are faced with the following questions, among others

  • What are my portfolio's current energy consumption and CO2 emissions - and what are scenario-based targets?
  • What temperature path are my buildings currently on?
  • What options are open to me for further developing my buildings to meet future requirements?

What we offer

What Climate Excellence offers the real estate industry

Climate Excellence analyzes the impact of climate change on your real estate portfolio for you. The tool enables you to translate the financial implications of different climate scenarios into risk and opportunity management and understand their material drivers.

The tool provides answers to the following questions, among others:

  • What are the returns, value, and investment costs at the portfolio and building level?
  • Based on a holistic modeling approach that includes not only CO2 prices, what are the qualitative drivers behind these values?
  • How do vulnerability and damage levels change due to physical damage?

Climate Excellence supports you in the following topics, among others:

  • Assessing the situation with regard to CO2 and energy data
  • Formulation of reduction targets
  • Basis for non-financial reporting

The services of Climate Excellence for the real estate industry in detail:

  • Use of scientific, internationally recognized scenarios from the Intergovernmental Panel on Climate Change (IPPC) and the International Energy Agency (IEA).
  • For transitory risks:
    • Choice between currently three scenarios, which are continuously supplemented and expanded.
    • 224 different transition pathways, specific per country and building type.
  • For physical risks: Choice between currently two scenarios, which are continuously supplemented and expanded.
  • Adaptability: sensitivity analyses along the user's level of adaptation to climate change (inactive versus adaptation).
  • Holistic modeling: consistent scenario modeling that goes beyond CO2 price to include criteria such as land growth, energy demand and mix, and rent changes. 
  • Representation of taxonomy capability of the portfolio and individual buildings (currently under development).  
  • Outstanding development platform: SAP provides a high-performance, secure, cloud-based environment that supports interfaces to SAP's own and other user-specific systems.
Portfolio Overview

Your benefits

How real estate companies benefit from Climate Excellence

  • Leverage qualitative and quantitative outputs for cross-functional integration of climate risks and opportunities across the enterprise
    • Climate strategy and business unit development
    • Risk management
    • Acquisition process
    • Portfolio management and development
    • Design of (non-financial) reporting and fund prospectuses
  • Introduction of climate scenario analysis in line with the best practice recommendations of the Taskforce for Climate-related Financial Disclosures (TCFD).
  • Climate Excellence supports portfolio analysis in relation to EU taxonomy. 
  • Direct use for the annual status report for members of the Principles of Responsible Investment (PRI)

Contact us

Dr. Anne Michaels

Dr. Anne Michaels

Senior Managerin, Sustainability Services, PwC Germany

Tel: +49 40 6378-2599

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