ULI report warns of imminent ESG-related risks for 2023

Taking action on climate change will be a central theme for the real estate industry in 2023, according to over 50 sustainability experts interviewed for a new report from the Urban Land Institute (ULI) and Ferguson Partners.

Real estate firms across the Americas, Europe, and Asia Pacific are addressing climate risk in their portfolios with some urgency, according to the findings, while the industry is working to measure material considerations in transactions and valuations.

'Despite the pending recession, real estate is poised to drive value across the industry in 2023 by investing in building decarbonisation and sustainability,' said Marta Schantz, co-executive director, ULI Randall Lewis Center for Sustainability in Real Estate.

'Increasingly, the regulatory landscape encourages greater climate action, and real estate has an opportunity to collaborate with stakeholders across the value chain to accelerate that progress. We hope this year’s outlook can provide guidance for real estate professionals that are looking to get smart on sustainability issues for the year ahead.'

The ULI Global Sustainability Outlook 2023 provides an overview of the widespread challenges facing developers and investors as they attempt to balance implementing longer-term measures to address climate risk with the shorter-term need for return on investment.

'Our goal is to help organizations develop, evolve and manage ESG and sustainability strategies with measurable results that realize their ESG goals,' said Ferguson Partners’ Matthew Hardy, who leads the firm’s Australia and New Zealand business and its ESG and sustainability-related initiatives globally.

'It is clear these are fundamental to the ethical and fiduciary responsibilities required today. We are proud to partner with ULI on sharing best practices that will help drive this much-needed progress amid the growing climate crisis.'

This is the third edition of the ULI global sustainability outlook, which features insights from ULI member experts on the key ESG issues that will influence strategic decision-making in the year ahead.

The report is based on roundtable interviews with members of the ULI Americas Sustainable Development Council, the ULI Europe Sustainability Council, and the ULI Asia Pacific Resilient Cities Council.

The report emphasises the place for cooperation across the real estate value chain, the importance of assessing sustainability in valuation, and the drive toward more transparent and consistent climate regulation.

The report identified five issues that will shape real estate decision-making in the year ahead, including adjusting ESG strategy for macro-economic complications; embedding transition risk in transactions and valuations; harnessing the power of collaboration; adressing global flood challenges; and responding to government influence.


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