Mitigating Real Estate Risk Through Resiliency Planning
First, let me tell you who I am not. I am not an environmental scientist, a climatologist, or an expert in resiliency. I am not on any committees for climate change at the federal, state or local level. I’ve not been studying climate change for years. I’m not an expert by any stretch of the imagination. However, I am a member of our real estate community. I’m a program planner and a project manager – representing owners who are designing and building commercial real estate projects for their organizations.
I think often and hard about how climate change will impact my life, the life of my children, and how our communities and business will have to adapt to a changing future. I wonder just what I could be doing today to better prepare myself for the future of tomorrow. It seems like such a huge, global problem. How can actions I take make a difference – and is it really my job?
I also wonder when tomorrow will be. I’ve heard that we won’t be feeling the effects of climate change until 2070. That seems very far away. I have already seen the effects in Boston over the last few years. My own experience tells me the seasons are changing, storms are getting more severe, and our coastline is changing. Current research shows cities like Boston and Cambridge are likely to start seeing effects as soon as 2030. That’s only 12 years away! Chances are the real estate leases you are signing today will still be in effect then. There’s no longer a conversation about if climate change is real. We are now talking about how to deal with it and when should we be concerned?
I first heard the term resiliency a few years ago. It excited me because I have been concerned that we were becoming saturated with “sustainability”. LEED was an accepted business practice and we had addressed issues like off-gassing from our products, we were buying sustainably forested wood, and were taking care of our air quality. We have been looking at alternative energy, conserving our water and even changing our lights to LED. After I’ve gotten rid of all my incandescent light bulbs, recycled more than I throw away, and even collected my rainwater, what else could I do?
Over the past year or so, I’ve met a few individuals that are answering that question – what can I do today? These steps can help you to identify when you should start to think about resiliency, how it will affect your real estate portfolio, and how you can go about doing something today that will impact your organization in a positive way for the future.
- Identify key stakeholders in your organization.
Resiliency Planning is a team sport! Make sure to include all facets of your organization that share in the risk. Define the goals of your committee and ensure you have executive sponsorship. Taking a holistic view of your workforce, supply chain, geography and infrastructure is required for meeting key elements of your plan which might be critical to maintaining continuity.
- Define the risks.
Each organization has a unique profile – and with that comes unique risks. Be able to identify where risks are in your Business Continuity Plan due to geography and weather. It’s not just flooding. Wind damage, heat and drought, and problems with public transportation and power all factor in. It’s no good if you can’t get fuel delivered to your generator or if your staff can’t get to work!
- Work with your insurance provider and other outside resources.
There are a myriad of resources available to you – from urban and city planners, to state and local officials, and architects, planners, and other real estate organizations. Be sure to understand the flood plain maps – they can change, and the repercussions can be expensive.
- Develop a tiered approach that lets you tackle capital projects first.
Review leases and determine if changes in the portfolio should be made and evaluate the effectiveness of work-from-home programs.
Most of all, realize that each one of us has a role to play. By doing the research you are taking the first steps! I’m hoping you can start to answer the question of what resiliency means to you for yourself.
This resource list is a good place to get started.
You can also read our previous article about resiliency and flood mitigation here.