Climate risk and adaptation of the buildings
Climate change impacts Pandox as a company as well as its properties – and will continue to do so in the future. Today’s society is highly vulnerable to climate change because it is adapted to a climate of the past.
Body Climate change will lead to higher temperatures and changed precipitation patterns, as well as more frequent and intensive extreme weather events such as torrential rain, heatwaves and drought. It is therefore important right now to analyse how Pandox will be impacted and to plan ways to manage potential effects.
Climate risk assessment of buildings in connection with acquisitions
In 2022 Pandox purchased a climate risk tool that analyses and makes a financial evaluation of the Company’s exposure to physical climate risk and natural disaster risk. It identifies which climate adaptation measures need to be carried out at the property level. The tool assesses the properties’ risks based on various climate scenarios – RCP 2.6 (1.5 ⁰C temperature rise), RCP 4.5 (2–3 ⁰C temperature rise) och RCP 8.5 (4 ⁰C temperature rise) – and in different timeframes (now, 2030, 2050 and 2100). All of the properties were analysed during the year.
Based on this desktop analysis, a number of properties were identified as being located in areas where there is already a very high or high risk of being impacted, mainly by flooding or heavy precipitation. On-site risk inspections were carried out at two of these properties by a third party during the year. An in-depth analysis was carried out at one additional property. At this property the benefits of an on-site inspection were considered minimal as the analysis already clearly showed that the main risk was outside Pandox’s control as it was due to land conditions.
The on-site inspections confirmed that the climate risks were relevant and assessed which potential vulnerabilities exist. This resulted in an action plan for each property that includes proposed measures to adapt the building infrastructure where the basement level could potentially be flooded. All the remaining properties with high risk will be inspected on site and the necessary measures will be implemented no later than 2030. Climate adaptation measures are to be a natural aspect of Pandox’s investment process going forward.
In 2022 Pandox also started using the climate risk assessment tool for properties before acquiring them. The tool was used, for example, in the acquisition of Aparthotel Adagio Edinburgh Royal Mile and DoubleTree by Hilton Bath in the UK.