Climate action and urban resilience
Photography by Benjamin Suter courtesy of Unsplash
Meet Amy Erixon, MIT grad, forty-year industry veteran, yoga enthusiast and climate activist.
In 2012, she founded Avison Young’s investment management practice, which is active in Canada, the U.S., Germany and U.K. and invests in all property types on behalf of major institutional investors.
Today, she and her team partner with clients to achieve their financial, as well as non-financial, portfolio goals. Among these goals are generating market-beating, stable income and growth, and reducing risks, especially climate-related and functional obsolescence risks. Her team also contributes to social value and boosts community resilience.
Amy explains, “The long-term investment nature of real estate makes it especially well suited for making investments to reduce vulnerability to the impacts of climate-related events, and to prepare your portfolio for the carbon transition. As climate risks are increasing in intensity and likelihood over time, this presents an ongoing, escalating challenge and opportunity.
“That’s why we need to be doing everything, everywhere, all at once – little things like lighting retrofits to big things, such as more efficient windows, heating and air conditioning systems as the opportunities arise - to try to mitigate the climate catastrophe. Due to active management, real estate can continue to be a big part of the solution.”
As we transition to a greener economy the industry will be under increasing pressure to continue to innovate, and use better materials, methodologies and systems to optimize performance and minimize emissions – a process known as decarbonization.
What is decarbonization?
Decarbonization refers to the process of reducing greenhouse gas emissions, primarily carbon dioxide, from human activities, such as burning fossil fuels for energy, transportation, and industrial processes. By reducing emissions, decarbonization aims to slow down the pace of climate change and limit the severity of its impacts, such as sea level rise, extreme weather events, and loss of biodiversity.
Transitioning to a low-carbon future means we can reduce the severity of these risks and build greater resilience to the impacts that are already unavoidable.
“With every asset purchase, we are underwriting for these risks and costs. Our portfolio targeting system allows us to incorporate climate risk factors alongside demographics and many other key data sources to build strong and resilient portfolio strategies,” says Amy.
“We incorporate these considerations into annual budgets and business plans and have an engineering update for every asset every three years to assess useful life of equipment, technology changes and any other decarbonization, climate resilience risks and opportunities in the portfolio.”
With risks and regulations constantly evolving and mandatory disclosure requirements and associated incentives and penalties looming, Amy advises her clients to:
- Understand the cost and benefit of decarbonization and stay informed about the timing and characteristics of grid updates in their region.
- Support data collection and operations management to understand the baseline condition of your portfolio and to use in developing plans and programs to become more efficient, save money and assess paybacks.
- Understand the urgency of the situation and be proactive when it comes to implementing solutions to mitigate climate and transition risks.
Risks according to the TCFD
The TCFD recommendations separate climate-related risks into two distinct areas: those related to the global transition to a low-carbon economy and those related to the physical impacts of the climate crisis.
It breaks down transition risks into four main categories:
- policy and legal
- technology
- market
- reputation
The TCFD also identifies two physical risks:
- acute
- chronic
Leaning heavily into a partnership approach, Amy and her team leverage their expertise alongside the client’s business objectives, to deliver annual GRESB reporting (Global Real Estate Sustainability Benchmark) TCFD assessments, (Taskforce for Climate Disclosure), and capital expenditure and budgets that proactively manage risks, ensure that assets are adequately insured and operated effectively and safely.
Guided by her personal mission to “use her gifts to do the most good for the most people that she can,” her informative, collaborative approach is helping educate clients on how best to position their portfolios for the future.
“Our clients and tenants are becoming a lot more sophisticated and willing to help, financially and technically with the implementation of technology, management, and equipment to mitigate climate risk.
“They know they must consider the resiliency of their properties, effectively manage climate risks and aggressively capitalize on climate opportunities to be well-positioned to profit in the years ahead, and we’re here for them every step of the way,” added Amy.