In 2020, we completed our comprehensive climate risk assessment to identify the key risks posed by climate change to our business operations as well as the business opportunities arising from new climatic conditions.
Physical risks
We conducted asset-level modelling of both the acute and chronic physical risks associated with various climate scenarios, in selected timeframes from the immediate term to the distant future – 2025, 2030, 2050, and 2100. We also undertook detailed asset-level assessments to evaluate the degree of sensitivity and adaptive capacity of individual buildings under the potential effects of the identified climate risks.
Our analysis identified that overall, there are low to moderate levels of risk for flooding, heat stress, water stress, and extreme wind for our global portfolio in all assessed climate scenarios. These risk levels are attributed to the relatively robust adaptive capacity and mitigation measures we have integrated into our buildings.
We also identified short and mid-term measures for individual buildings to mitigate risks and build resilience across our portfolios. Examples include:
- Upgrading flood protection measures and alert systems;
- Improving chiller efficiency;
- Regularly inspecting glass façades; and
- Installing smart monitoring systems.
Some of these resilience measures will also be incorporated into the planning and design stage of new developments in order to ensure our assets will continue to be resilient under different future climate scenarios.
Transition risks and opportunities
We comprehensively reviewed global, national and local government policies, as well as regulatory, market and technological trends based on different climate scenarios involved in the global transition to a low-carbon economy.
We identified a number of risk and opportunity drivers that may have a financial impact on our business under the 2oC climate scenario. These include tightened building energy codes and guidelines, increased market demand for green and energy efficient properties and climate resilient properties.
Based on the analysis, our current business and sustainability strategies will allow us to effectively manage the identified transition risks and capture the identified opportunities during the transition to a low-carbon economy. These strategies include:
- Science-based targets to drive long-term carbon reduction;
- Investment in, and development of, certified green buildings with best-in-class energy efficiency and climate resilience;
- Investment in renewable energy measures throughout our portfolio;
- Wide application of innovative green technologies;
- Commitment to green financing; and
- Engaging our supply chain, tenants and other relevant stakeholders in climate resilience and sustainability initiatives.
We are also initiating a quantitative assessment of the potential financial impacts of our key identified transition risks and opportunities which will inform our risk management and strategic planning. For more information, please refer to our Climate-related Financial Disclosures.