A Framework for Measuring and Reporting of Climate-related Physical Risks to Built Assets
In August 2021, UKGBC launched the Measuring and Reporting Climate-related Physical Risks task group in response to the upcoming mandatory disclosure of climate-related risks. For large organisations and financial institutions within the UK, this comes into force from April 2022 in line with the Task Force on Climate-Related Financial Disclosures’ (TCFD) recommendations. If successful, this requirement is likely to expand to include smaller organisations by 2025. For asset-owning organisations this will include a requirement to consider, measure, and report any risks posed by physical climate-related risks, alongside reporting transitional risks from reducing greenhouse gas emissions.
The guidance includes detailed information on the physical risk assessment process; a methodology for built asset scale; and a standalone reporting framework which can be used to support the preparation of TCFD disclosure reports. By providing a methodology for the built environment, it is hoped that this report and framework will address the current lack of consensus on physical risk disclosure methodologies.
If you have any questions on the framework or would like to provide feedback, please email Hannah.Giddings@ukgbc.org.
For more information on UKGBC’s Resilience and NBS programme and previous publications see here.
UKGBC’s Director of Business Transformation, Alastair Mant said:
“With every degree of warming, the likelihood increases for destructive climate impacts and extreme weather events. It is only through transparent and accurate climate-related risk assessments and reporting can we close the gap between the level of risk we face and the level of climate adaptation underway. This Framework provides asset-owning businesses large and small with a consistent methodology for getting to grips with TCFD-aligned disclosures, as well as the tools to better understand the impact of climate change on their built assets.”
Bill Hughes, Head of Real Assets, Legal & General Investment Management, said:
“UKGBC’s guidance comes at a critical point for organisations right across the built environment value chain, supporting TCFD alignment and providing an important step on the journey towards accurate and transparent physical climate-related risk measurement and disclosure. By measuring, interpreting, and reporting on the physical climate risks posed to assets, organisations can make better informed decisions that have benefits for their own operations and the future of the built environment.”
Louise Pryor, Chair of London Climate Change Partnership, said:
“Evidence shows that our climate is already changing, and the frequency of extreme weather events is rising. Proactive adaptation to the physical impacts of climate hazards must be built into our normal planning, decision-making, and risk management procedures – not only to cope with the physical impacts on our buildings, but also the financial impacts. UKGBC’s Framework provides asset owning businesses with the guidance to actively assess and measure the physical risks of climate change, enabling them to make better decisions today for the future wellbeing of our buildings and communities.”
The framework has been made possible thanks to the UKGBC Resilience & Nature-Based Solutions Programme Partners: the John Ellerman Foundation, ARUP, BuroHappold, CBRE, Federated Hermes, Hoare Lea and ISG.