By Jeff Blaylock,

Director of Client, UK,

Deepki

Extreme weather is no longer a distant concern—it’s today’s reality. For the second year in a row, the World Economic Forum’s Global Risks Report has named extreme weather as the most significant threat of a material crisis. From floods and wildfires to scorching heat waves, climate-driven catastrophes are wreaking havoc on communities, ecosystems, and economies.

The real estate sector sits squarely in the path of this storm. By 2050, under even a low climate change scenario, physical climate risks could cost the industry a staggering $536 billion, wiping out 26% of the total value held by companies in the S&P Global REIT Index.

The message is clear: climate resilience isn’t optional. It’s essential.

Why Climate Risk Is Everyone’s Business

Real estate professionals can no longer afford to treat climate risk as a theoretical problem. Buildings are directly exposed to both physical risks like, storms, floods, and fires; and transition risks arising from the shift to a net zero economy, including new regulations, carbon pricing, and evolving stakeholder expectations.

To make smart decisions, the industry needs timely, accurate, and granular data. Understanding the specific vulnerabilities of each asset allows companies to prioritise actions, tailor strategies, and allocate resources efficiently.

From Data To Action: Mitigating Risk

Once a clear picture of risk exposure is in place, the real work begins. Climate resilience isn’t about a one-size-fits-all checklist. It’s about targeted, thoughtful upgrades.

Think of it as a resilience spectrum. At one end, quick wins like installing solar window films can immediately reduce heat absorption during heatwaves. At the other, capital-intensive retrofits such as advanced HVAC systems or fireproofing materials can transform a building’s long-term outlook.

Every asset is unique, and by taking each asset’s specificities into account, owners can protect value, lower operating costs, and future-proof investments.

Climate Resilience is Business Resilience

The cost of inaction on climate adaptation and mitigation is profound. The annual cost of damages is projected to increase from €2.4 billion per year between 1989 and 2019, to €4.6 billion per year between 2020 and 2050^[1].

Yet there are opportunities to increase property values by making portfolios more resilient.

Beyond escalating insurance rates, asset managers also face the threat of rising expenditures related to maintenance and repairs. As climate risks intensify, so will the costs of maintaining properties that are not strengthened against them.

Failing to meet regulatory and stakeholder requirements by implementing mitigation and adaptation measures can damage a real estate company’s reputation, resulting in diminished market trust and asset value. As investors and tenants prioritise climate risk measures, non-compliant properties may need help to attract buyers and investors. This could also result in stranded assets, reducing access to capital as funds increasingly flow to more sustainable and compliant portfolios.

Doing nothing comes at a steep price. Europe’s annual climate-related damage costs are expected to nearly double, from €2.4 billion between 1989–2019 to €4.6 billion annually by 2050¹.

Rising insurance premiums, escalating maintenance costs, and the risk of falling afoul of regulations can seriously undermine profitability. But beyond the balance sheet, the reputational fallout from inaction can drive away investors and tenants alike.

Properties that fail to adapt may become stranded assets, unable to attract capital in an increasingly sustainability-driven market.

A Roadmap to a Resilient Future

Despite the challenges, this moment presents a powerful opportunity. By embracing climate data, crafting bespoke mitigation strategies, and acting decisively, real estate leaders can position themselves at the forefront of the transition to a low-carbon economy.

At Deepki, as the most trusted sustainability SaaS solution for real estate, we support our clients with the insights and tools needed to navigate this complexity with confidence. In a time when trust in data and decisions is more important than ever, building resilience starts with clarity, consistency, and accountability.

This is about more than just compliance; it’s about building portfolios that endure, perform, and thrive in the face of a rapidly changing world.

The future of real estate will be climate-smart, resilient, and profitable… for those ready to lead the way.