Level up: The three levels of climate-risk-analysis

Not all climate-risk analysis solutions are equal. Different solutions answer different questions about physical climate risks and buildings. Here is a breakdown of the differences to help asset owners identify the best solution to meet their needs.

Level 1: Climate-Risk Exposure Screen

Answers the question: What are the climate hazards at this location?

Ideal use: Low in cost and easy to rapidly scale across an entire portfolio of real estate assets, climate-risk exposure screens are a great first step in climate-risk analysis. These screens are the starting point for identifying the climate hazards threatening a property, flagging assets that may be at higher risk and require deeper analysis.

Level 2: Climate Value at Risk (CVaR) Assessment

Answers the question: How financially vulnerable is my building and its critical systems to these risks and what can be considered to protect my asset?

Ideal use: A Climate Value at Risk (CVaR) assessment layers the climate data with building science to determine how these hazards will impact critical building systems and what the climate-adjusted costs will be in the next 5, 10 and 30 years. The assessment further offers a suite of resiliency recommendations, tailored to the physical climate impacts identified for the building. This building system level assessment provides financial insights that are ideal for supporting capital and adaptation planning, identifying risks during transaction due diligence efforts, and managing risks during asset operations, as well as satisfying ESG reporting and disclosure requirements.

Level 3: On-site Engineering Inspection

Answers the question: How vulnerable is my asset, including its operations and business, to these risks and what should be done to address the risks?

Ideal use: For complex buildings with elevated climate risks, investing in an in-depth, high-quality engineering assessment will provide the most comprehensive overview of the physical risks facing the asset’s – including impacts to the building’s systems, operations, business, and occupants. These assessments typically include site visits, as well as a review of building design and operation plans, allowing for more in-depth risk identification. This deeper dive allows for the development of site-specific adaptation plans to action long-term resiliency for the building and its operations.

When and how to use all three levels together

A Level 1 Climate-Risk Exposure Screen is the perfect place to start when seeking to identify what the site-level risks are for many assets. Affordable and easy to scale across an entire portfolio of assets, users can quickly determine which assets need closer review. A Level 2 CVaR assessment can then be applied to real estate identified as having an elevated risk or as part of the regular due diligence process for key transactions. And Level 3 is ideal for large capital projects requiring the most detailed reporting and recommendations.

Did you know?

ClimateFirst software for climate-resilient buildings provides both Level 1 and 2 assessments. And as climate tech developed by RWDI, world-class climate and performance engineers, ClimateFirst clients can easily access Level 3 Engineering Inspections should they be needed.

Already have Level 1 assessments completed? Learn how to integrate them into a more comprehensive three-level approach.