A Framework for Measuring and Reporting of Climate-related Physical Risks to Built Assets

UKGBC have launched a Framework to provide organisations with a consistent methodology for measuring climate-related physical risks to built assets.
Climate Change Adaptation Nature Guidance

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.  

Key Findings

1

Across the asset investment cycle, risks are increasing as a result of intensifying climate hazards; from risks of flooding to wildfires.

2

Failure to recognise and incorporate climate-related physical risks into decision-making is considered a threat to socioeconomic security.

3

Crucially, many current tools lack the capacity to include resilience measures within them, or to assess future climate scenarios.

4

This guidance aims to provide organisations and individuals with the knowledge and tools to undertake self-analysis of physical risks at the asset level. The detail provided within this report will support physical risk assessments of individual built assets, which may be undertaken in the place of, or in conjunction with, broader portfolio assessments. .

Download the Report

Measuring and Reporting Physical Risk Report

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To build on this report, UKGBC held a series of Physical Risk Labs that gave participants the opportunity to follow this guidance step by step together on real life assets. Learn more about labs and the experience of the participants here.

To support built environment professionals with the measuring and reporting of climate-related physical risks to built assets, UKGBC is hosting an practical learning course to walk participants through the application of the Physical Risk guidance tool to their chosen asset. Learn more and sign up here.

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.”  

UKGBC’s Director of Business Transformation, Alastair Mant

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.” 

Bill Hughes, Head of Real Assets, Legal & General Investment Management

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.”  

Louise Pryor, Chair of London Climate Change Partnership

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. 

If you have any questions on the framework or would like to provide feedback, please email Hannah.Giddings@ukgbc.org

Climate Change Adaptation

As the climate crisis intensifies and extreme weather events become more common, the UK’s buildings, cities and critical infrastructure, and the communities that use and occupy these, are in increasing danger. It’s vital to address how our buildings and infrastructure can be adapted to remain fit for the future.
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Climate Resilience webinar

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