Sustainability: The risk management category

Brenna Walraven, Shila Wattamwar and Colin Curzi
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Brenna Walraven: Executive Strategic Advisor, RE Tech Advisors, USA
Shila Wattamwar: Vice President of Shared Services, RE Tech Advisors, USA
Colin Curzi: Head of Building Policy, RE Tech Advisors, USA

Corporate Real Estate Journal, 2025, vol. 14, issue 3, 266-279

Abstract: The growing emphasis on sustainability in the real estate market is being driven by regulatory demands, stakeholder expectations, and positive financial outcomes into becoming a vital risk management strategy. Investors, lenders, and tenants are increasingly integrating environmental, social, governance, and resilience (ESG+R) considerations to enhance efficiency, position for resilience, and positive financial performance and mitigate compliance risks. It is essential for real estate owners and operators to be engaged in these climate transition and physical risks from topdown and bottom-up on regulations and climate reporting mandates, such as the EU’s Sustainable Finance Disclosure Regulation, the Securities and Exchange Commission (SEC) Climate Disclosure Rules, and the array of locally legislated Building Performance Standards policies across the USA. Understanding key material risks, including transition and physical risks associated with climate impacts, and adoption of frameworks, such as the Task Force on Climate-Related Financial Disclosures (TCFD) and International Financial Reporting Standards (IFRSs) for risk assessment, is crucial. Implementing ESG+R initiatives can improve operational efficiency, resulting in cost savings, enhanced tenant/occupant satisfaction, and increased asset value. Effective climate risk management in this evolving regulatory landscape requires collaboration across organisational levels and strategic planning to achieve sustainability goals and optimise long-term investment returns.

Keywords: sustainability; environmental; social; and governance (ESG); climate; climate resilience; risk management; transition risk; physical risk; building performance standards (BPS) (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2025
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