The Reality of Climate Risk in Real Estate

The EU’s Omnibus Regulation is streamlining sustainability reporting and compliance, reducing the number of companies affected by directives like CSRD, CSDDD, and the EU Taxonomy. But while reporting obligations may be easing, the fundamental risks posed by climate change remain unchanged. For real estate investors and asset managers, understanding this distinction is crucial.

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Short-Term Impact: A Temporary Slowdown

With fewer companies required to report, some may choose to delay climate risk planning in the near term. When regulations are relaxed, there is often a perception that immediate action is unnecessary. This could lead to:

• Postponed investments in climate resilience strategies.
• Lower immediate demand for sustainability solutions as businesses shift focus.
• Uncertainty in financial markets, as investors reassess ESG-based investment strategies.

However, this delay doesn’t eliminate risk—it only defers action, potentially increasing future costs and exposure.

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Long-Term Outlook: Climate Risks Are Here to Stay

While regulatory frameworks may fluctuate, the financial risks associated with climate change remain constant—and are growing. Real estate portfolios are particularly vulnerable to:

• Physical climate risks (floods, wildfires, heatwaves, and extreme weather events) leading to asset damage and increased insurance costs.
• Transition risks as energy efficiency standards, carbon pricing, and investor expectations shift over time.
• Market risks, where properties failing to meet evolving sustainability criteria face devaluation and reduced liquidity.

The takeaway? Ignoring climate risk now will only amplify financial exposure down the road. Investors, lenders, and insurers will continue to incorporate climate risk into their decision-making, regardless of short-term regulatory relief.

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How Telescope is Responding

At Telescope, we recognize that real estate firms need more than just regulatory compliance—they need insights that drive real business value. That’s why we’re focusing on:

• Demonstrating the financial impact of climate risk through data-driven insights.
• Helping companies align sustainability initiatives with profitability and asset protection.
• Ensuring real estate leaders can navigate climate risk effectively—regardless of regulatory shifts.

By prioritizing long-term resilience over short-term compliance, businesses can position themselves ahead of the curve, ensuring their portfolios remain attractive to investors and protected against climate-related losses.

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Bunnlinjen

• ‍Climate risk doesn’t disappear just because reporting rules change.
• Delaying action now could mean higher costs and financial exposure later.
• Proactive management of climate risk will continue to be a competitive advantage in real estate.

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Want to future-proof your real estate portfolio? Book a demo to discover how Telescope helps you stay ahead.

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