Transition Risk: Get immediate insights into your portfolio

GRESB’s Transition Risk Report can easily show you which of your assets are most exposed to climate-related transition risk and how this may affect your portfolio over time – at both a country and global level.

What is transition risk?

Transition risks are business-related risks that follow societal and economic shifts toward a low-carbon and more climate-friendly future. These risks can include policy and regulatory risks, technological risks, market risks, reputational risks, and legal risks. These risks are interconnected and often top of mind for investors as they attempt to navigate an increasingly aggressive low-carbon agenda that can create capital and operational consequences to their assets.

For asset managers and investors alike, estimating the overall transition risk associated with a portfolio can be a daunting task.

Portfolio view of transition risk

Get up to speed quickly on the transition risks residing in your portfolio

For GRESB Members, getting an executive-level understanding of transition risk across portfolios and a projection of when individual assets may become at risk is both easy and inexpensive. This is because:

  • Your insights are already prepared. The Transition Risk Report draws on existing asset-level data in the GRESB Portal, making it the quickest and most cost-effective way to uncover transition risk.
  • We show you three levels of insights. Built from asset-level data, the Transition Risk Report provides a clear picture of risk in individual assets and aggregated across regions. The global summary is a snapshot of your whole portfolio.
  • GRESB leverages real data from 117,000 assets. Real data means more useful insights. If any of your asset data is missing, GRESB makes accurate estimations using our granular, worldwide asset-level database.
  • Insights are science based. The Transition Risk Report benchmarks assets against CRREM’s scientifically reviewed and industry-accepted decarbonization pathways.

Another benefit is that the report is ready to share with investors, because the underlying data is already standardized in GRESB’s Benchmarks and in a format they expect.

See an example Transition Risk Report.

GRESB and CRREM together

Together with other consortium members, GRESB launched CRREM – An EU-funded Horizon 2020 project that stands for the ‘Carbon Risk Real Estate Monitor’.

CRREM translates Paris Climate goals into regional trajectories against which assets and portfolios can be benchmarked. These pathways underpin GRESB’s Transition Risk Report and show when individual assets are at risk of being stranded because they are not in compliance with local regulations or have entered obsolescence. The use of CRREM’s 1.5C pathways has been endorsed by both the UN-convened Net-Zero Asset Owner Alliance and the Institutional Investors Group on Climate Change.

Get your Transition Risk Report

GRESB Members that already participate in an assessment will be able to get an executive summary of their portfolio’s transition risk with just a few clicks in the GRESB Portal. For non-Members, contact us to learn how you can get your Transition Risk Report.

The Transition Risk Report will be available in early 2022.

Let me know when it is launched.

Do more with GRESB

By using GRESB’s Transition Risk Report and leveraging CRREM’s science-based pathways, you can easily monitor your alignment with international commitments like the Paris Climate Accords. The report is also useful for TCFD requirements, allowing you to better fulfill and enhance several disclosures by considering different climate-related scenarios.

  • Recently, there has been a massive increase in net zero commitments – coming from nations, coalitions of financial institutions and real estate industry bodies, among others. Important ones of note for the real estate sector include the IIGCC’s Net Zero Investment Framework, the UN-convened Net-Zero Asset Owner Alliance’s Inaugural 2025 Target Setting Protocol, the BBP Climate Commitment (and associated Net Zero Carbon Pathway Framework) and the WGBC’s Net Zero Carbon Buildings Commitment.

    While commitment is a necessary first step, much focus has now been rightly shifted toward execution, and financial actors and real estate operators alike are in need of credible tools and standards that are able to put their assets and portfolios into the context of these high-level commitments.

  • As climate-related risks (both transition and physical) become increasingly recognized as material factors for consideration in financial decision-making and planning, global standard-setting institutions, financial institutions and even regulatory authorities are looking to the TCFD as the basis for climate-related reporting. The TCFD recommends the disclosure of scenario analysis exercises to be used in the contextualization of the resilience of an organization’s strategy to climate-related issues.

    As the management and disclosure of transition risks become mainstream, the estimation of such risks at the asset and portfolio level will become a key aspect of risk identification and assessment processes. Such capabilities will serve as the basis for TCFD-aligned disclosures and other regulatory requirements, such as SFDR.

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