Valuing the Future: A Roadmap for Integrating Climate-Related Risk Factors into Canadian CRE Valuation

REALPAC and the Canada Green Building Council are pleased to release Valuing the Future: A Roadmap for Integrating Climate-Related Risk Factors into Canadian Commercial Real Estate Valuation. The report provides a practical roadmap for incorporating climate-related risks into Canadian commercial real estate valuations, helping building owners, appraisers, investors, and industry stakeholders better understand how physical and transition risks may affect asset value.

As climate change, regulation, capital markets, and tenant expectations continue to reshape the commercial real estate sector, valuation practices must evolve to reflect these emerging risks. The report highlights how climate-related factors may influence cash flow durability, capital expenditures, leasing risk, operating costs, insurance, liquidity, and long-term asset competitiveness.

The report outlines five key recommendations for moving the industry forward:

1. Adopt updated International Valuation Standards guidance on sustainability in Canada.
2. Establish a climate-related risk data framework for asset valuations.
3. Develop credible data systems and benchmarks for evaluating climate-related risk performance.
4. Ensure climate-related risk is addressed in appraisal practice through guidance and training.
5. Sensitize key valuation inputs, including discounted cash flow assumptions, to reflect climate-related risk.

The report also summarizes academic and market evidence on the financial performance of sustainable buildings, showing how green certifications, energy performance, resilience, and decarbonization planning are becoming increasingly relevant to asset performance and valuation.

By providing a clear path for collaboration between owners, appraisers, and industry organizations, this report supports more accurate, credible, and future-ready valuation practices for Canadian commercial real estate.

Download the report to learn how climate-related risk is expected to shape the future of commercial real estate valuation in Canada.