Cities, Regions, and the Built Environment at COP26

Collaboration between real assets owners and the cities in which they operate is key to advancing on climate action

As the world gears up for COP26, attention is turning to the built environment’s responsibility to reduce GHG emissions and urgent need to adapt to the physical impacts of climate change such as flooding and heat stress. While buildings have unfortunately contributed to the problem of climate change over time through their use of fossil fuel-based energy, those of us who work in the sector now have a tremendous opportunity to help redirect capital to drive positive change.

The IPCC Sixth Assessment Report (AR6) confirms that human activity is undeniably causing changes to our climate systems and that the world must transition to Net Zero Carbon by 2050 to prevent the worst outcomes. Transforming the urban built environment is key to fighting the climate crisis.

Cities are responsible for 60% to 70% of global carbon emissions, although per capita energy consumption of urban residents tends to be lower than that of rural residents.[1] Real estate is often the main culprit. In New York City, for example, buildings generate nearly 70% of the city’s carbon emissions.[2] Urban infrastructure and services are also increasingly vulnerable to extreme weather events and chronic climate changes. The IPCC AR6 report notes that cities actually intensify human-induced warming locally (i.e. the Urban Heat Island effect) and can increase local precipitation, worsening stormwater runoff intensity.

Cities are also grappling with other major shifts, including urbanization and population growth. By the year 2050, over two-thirds (68%) of the global population are projected to be living in urban environments.1 While greater density is usually a positive thing for reducing carbon emissions, growth can also put stress on land availability and natural resources. Urban centers are also currently battling housing crises and inequality in many parts of the world and working to recover from the COVID-19 pandemic. These all involve crucial planning and policy decisions that require funding.

The COP26 Presidency Programme is made up of a series of key themes, the last of which is “Cities, Regions and The Built Environment” on November 11th. An initiative related to this theme is the #BuildingToCOP26 Coalition, a group of business and government organisations that are focused on achieving zero emissions and resilience in the built environment and cities.  The Coalition is working to support an interim target of halving the built environment’s emissions by 2030 and an ultimate target of net zero emissions by 2050.

The Coalition is urging both cities and businesses to join the “Race to Zero,” which focuses on achieving zero emissions buildings and infrastructure. The Cities Race to Zero program is in partnership with the C40 Cities initiative, a group of 97 cities around the world pursuing climate action and sustainable urban environments. 

EVORA Global are attending COP26 and will be hosting an expert panel discussion on the 11th of November titled “Real Estate Investment and Finance: Climate Risk and Opportunities.” We hope you will join us if you are attending the conference!

What are cities doing to reduce emissions and adapt to the effects of climate change, and how will owners and managers of real assets play a role?

At EVORA Global, we help managers of real assets – including real estate and infrastructure – understand their climate risks, reduce their greenhouse gas emissions, and make their portfolios more resilient. Real assets managers can play a crucial role in the cities and communities in which they operate by mitigating climate change and providing safer, healthier, and more resilient buildings for occupiers.

Of course, buildings don’t exist in a vacuum. Urban properties interact with and rely on the services and infrastructure of the city around them. A highly resilient office building in a coastal city might be back up and running the day after a hurricane, but it will still face risks to rental demand and asset value if residents in the area are dealing with frequent evacuations and homes are losing insurance coverage.

It’s becoming increasingly important for real estate investors to scrutinize cities’ adaptive capacity, just as they have traditionally examined economic and demographic data in their target investment markets. Credit rating agencies have begun incorporating climate-related factors into their government bond rating systems, which may provide insightful metrics and research. A city’s political will and financial backing may determine whether it will remain habitable over the course of the century. Tokyo, for example, faced significant physical risks long before human-induced climate change. Although it’s well-adapted today (check out the incredible underground tunnel system that protects the city from flooding), massive investments will need to be made to improve those protections as climate risks worsen over time.

Cities are also establishing their own regulations and incentives to drive the built environment toward Net Zero Carbon, particularly in the United States where there is still a lack of strong national climate policy. New York City’s Local Law 97 sets energy efficiency and greenhouse gas emission limits for buildings starting in 2024 and intensifying in 2030. Just this month, the City of Boston signed into law the Building Emissions Reduction and Disclosure Ordinance (BERDO), which sets gradually decreasing carbon targets for existing buildings. Other local policies target specific technologies, such as energy efficient lighting, sub-metering, and electric heat pumps. Real estate managers, particularly those with geographically diverse portfolios, face a big challenge in staying on top of these emerging regulations and ensuring their assets comply.

There are many elements of urban planning and management that are critical to reducing emissions, including the provision of electricity and heating, urban water systems, urban waste management, transportation systems, and protection of green spaces and biodiversity. Each element may also be vulnerable to the physical impacts of climate change, so adaptation must be a part of all urban planning decisions. Climate mitigation and adaptation are therefore two sides of the same coin.

The urban built environment can either help or hinder the journey toward climate resilience, depending on the choices we make. COP26 serves as (yet another) urgent call to action for both governments and the private sector to work together to transition to a net zero carbon world. How will you respond?


[1] Rosenzweig, C., Solecki, W., Romero-Lankao, P., Mehrotra, S., Dhakal, S., & Ali Ibrahim, S. (Eds.). (2018). Climate Change and Cities: Second Assessment Report of the Urban Climate Change Research Network. Cambridge University Press.

[2] The City of New York (2016). New York City’s Roadmap to 80 x 50. The City of New York Mayor Bill de Blasio.

EVORA Global announces partnership with Moody’s ESG Solutions to drive physical climate risk transparency for real asset investors

EVORA Global today announces the launch of a new Physical Climate Risk (PCR) module and the integration of Moody’s ESG Solutions’ Climate on Demand risk analytics into its ESG data management platform, SIERA. This partnership offers EVORA clients more granular insights to better inform their financial decisions across their portfolios.

Climate change is noticeably affecting the world around us, including substantial impacts to real estate and infrastructure from floods, storms and wildfires. These risks can have significant financial implications. Coupled with a rapidly changing legislative landscape, including expected mandatory climate risk disclosure in 2022 as a result of new legislation in Europe, and the introduction of reporting frameworks such as the Taskforce on Climate Related Financial Disclosure (TCFD), the pressure is mounting for investment managers to understand their climate risk exposure and disclose appropriately.

Assessing climate risks across a multitude of portfolios and geographies can be daunting. Investment professionals need good quality data to measure their exposure to hazards like heat stress and flood today and in the future in order to understand the potential impacts to their assets and investment performance.

SIERA’s Physical Climate Risk module, powered by Moody’s ESG Solutions, provides asset- and fund-level insights into hazard exposure and risk scores for climate change-related hazards including flood, hurricane & typhoon, sea level rise, wildfire, heat stress, and water stress

“We are delighted to partner with EVORA to help their customers assess how their real estate investments may be exposed to the physical impacts of climate change.”

Emilie Mazzacurati, Global Head of Climate Solutions in Moody’s ESG Solutions Group

Moody’s Climate on Demand tool can score any location in the world on its exposure to climate hazards out to the 2030-2040 decade. It allows users to drill down into risk drivers, exploring the underlying indicators capturing different dimensions of risk for each hazard.

Analysing physical climate risk data alongside other automatically collated ESG data in SIERA, such as carbon emissions, enables users to clearly understand an asset’s risks and opportunities in one centralised platform, build resilience across their portfolio, and make informed, data-driven investment decisions. EVORA Global’s team of expert consultants help clients interpret their results and develop strategies to become more resilient to climate risks.

“At EVORA Global, we help clients better understand their exposure to changing climate hazards, the vulnerability of their assets to those hazards, and what steps they can take to become more resilient. Access to high-quality, decision-useful climate risk data is a crucial foundation to building climate resilience, so we are excited to introduce the new SIERA physical climate risk module and Moody’s partnership to our clients.”

Meghan Johnson, Associate Director of Climate Resilience Services, EVORA Global

About Moody’s ESG Solutions
Moody’s ESG Solutions Group is a business unit of Moody’s Corporation serving the growing global demand for ESG and climate insights. The group leverages Moody’s data and expertise across ESG, climate risk, and sustainable finance, and aligns with Moody’s Investors Service and Moody’s Analytics to deliver a comprehensive, integrated suite of ESG and climate risk solutions including ESG scores, analytics, Sustainability Ratings and Sustainable Finance Reviewer/certifier services. For more information visit Moody’s ESG hub at www.moodys.com/esg.

Simon Clouston joins EVORA as Director

EVORA Global is delighted to announce that Simon Clouston has joined the business as Director. He brings with him 30 years’ experience of advising organisations on environmental and sustainability strategy, having joined EVORA from WSP.  In recent years Simon has focussed on providing sustainability services to real assets investors. His wealth of experience and the relationships he has developed will be of huge benefit to both EVORA and our clients as together we seek to deliver on our mission to make buildings productive, profitable, and resilient to change.

Simon joins during a period of significant growth for EVORA and will support the next stage of our journey. Simon will lead a number of our key client relationships as well as providing leadership and mentoring for our client delivery teams. In particular, his experience of both developing strategy and implementation programmes for the net zero carbon transition will be invaluable in helping us address this number one priority for many of EVORA’s clients.

“I am really excited to have joined EVORA Global as a Director in their Consulting business. It’s been a pleasure to start to get to know the hugely talented and passionate team here. We are doing fantastic work with fantastic clients who are challenging themselves and us to accelerate the adoption of sustainable real estate. And within that to prioritise the transition to net zero. I can’t wait to get stuck in!”

Simon Clouston, Director

“I have known Simon for some time now, we used to bump into each other at events and when working for mutual clients.  I am delighted that Simon agreed to join us. Simon brings that magical blend of technical knowledge, experience and, perhaps most importantly, the ability to articulate what can be a daunting and complex agenda clearly and simply.  The whole EVORA team look forward to working with Simon to progress our vision

Paul Sutcliffe, Founder and Executive Director