Bridging the Climate Risk Gap in Real Estate Due Diligence

Due diligence is the bedrock of real estate transactions. Yet, most due diligence processes in the UK overlook one critical factor: climate risk. For building surveyors, this is both a challenge and an opportunity.

What Is the Climate Risk Gap?

• Many surveyors still rely on historical data.

• Climate projections and scenario modelling are rarely included.

• Physical risks like flooding, overheating, and subsidence are under-assessed.

Why This Matters

Ignoring climate risk can lead to:

• Stranded assets: Properties that become uninsurable or unlettable.

• Unexpected costs: From retrofits to flood damage repairs.

• Legal exposure: If risks were foreseeable but not disclosed.

How Surveyors Can Close the Gap

• Update templates: Include climate risk indicators in PPMs and acquisition surveys.

• Use scenario tools: Leverage platforms like Climate First or UKCP18 data.

• Collaborate: Work with ESG consultants and insurers to triangulate risk.

Case in Point

A commercial office in Leeds was acquired without recognising its floodplain location. Within two years, it suffered £1.2M in flood damage. A risk that could have been flagged with basic climate overlays.

Conclusion

Surveyors are the gatekeepers of asset integrity. By modernising due diligence to include climate risk, we can protect clients and the built environment alike.