Climate Risk in the Global Index

Real estate’s unique characteristics may make property portfolios particularly vulnerable to climate-change risks: Buildings can suffer physical damage due to climate change; and because they are energy-intensive to build and operate, they may incur significant costs as part of the global effort to reduce emissions. MSCI’s Climate Value-at-Risk model estimates that approximately 7.8% of the value in the index could be at risk due to transition or physical risks under the model’s default scenarios.