Future‑Proofing Real Estate: The New Mandate for Global Markets
Task force by OECD (2025) | Industry Insights
Montréal, Canada
Throughout 2025, the OECD brought together a task force of specialists and senior leaders from across member countries to develop a comprehensive assessment of how climate pressures are reshaping real estate investment. I was privileged to be invited to contribute to this initiative. The objective was ambitious yet essential: to provide policymakers and market participants with the insights needed to align investment decisions with the imperatives of decarbonization and resilience, and ultimately support a built environment that is sustainable, adaptable, and future-ready.
The resulting report, Future‑Proofing Real Estate Investment, published in December 2025, synthesizes perspectives from regulators, investors, financial institutions, insurers, developers, and technical experts. It examines the full spectrum of climate‑related risks affecting real estate and outlines practical pathways for aligning private capital with public climate goals. Its breadth reflects the complexity of the sector and the reality that no single actor, public or private, can address these challenges alone.
This industry insight offers a high‑level introduction to the report’s core messages. Future posts will explore each theme in greater depth, helping organizations translate the report’s recommendations into actionable strategies.
Real estate has become a central arena for both climate mitigation and climate resilience. Buildings account for roughly one‑third of global energy‑related CO2 emissions, making the sector pivotal to achieving national and international climate targets. At the same time, real estate, valued at USD 111 trillion across OECD economies, is one of the world’s most climate‑exposed asset classes. As physical hazards intensify and policy expectations rise, protecting the long‑term value and stability of real estate has become a strategic priority for governments, investors, lenders, insurers, and households.
The report represents a new chapter in the OECD Programme on Decarbonising Buildings in Cities and Regions. Earlier phases focused on the role of cities and regions in driving decarbonization, the practical application of multi‑level governance, and the shift from operational carbon to whole‑life carbon, recognizing emissions embedded in construction, renovation, and demolition. This new phase widens the lens to the entire real estate ecosystem, acknowledging that resilience and decarbonization require coordinated action across public authorities, financial markets, and industry stakeholders.
The work builds on the momentum of the Declaration of Chaillot on Buildings and Climate, endorsed by around 60 countries in 2024. That declaration called for a decisive shift in investment flows—from carbon‑intensive, high‑risk assets toward climate‑resilient, near‑zero‑emission buildings. In response, the OECD launched the Future‑Proof Real Estate Investment Project, supported by a task force of regulators, investors, banks, insurers, developers, and climate‑risk specialists. Their collective expertise informs the report’s analysis of how climate risks are assessed, priced, and managed, and how policy can better align private capital with public climate objectives.
The emerging risk landscape underscores the urgency of this work. Climate risk is fundamentally place‑based: exposure to flooding, extreme heat, wildfire, and other hazards varies sharply by geography, land‑use patterns, and community vulnerability. Transition risks are rising as building codes, infrastructure requirements, and climate policies evolve. These pressures are already material, with climate‑related losses estimated between USD 50 and 430 billion annually. The impacts are visible in declining asset usability, shifting valuations, tightening lending conditions, and reduced insurance availability. As these dynamics reinforce one another, they create feedback loops—devaluation, credit deterioration, and insurance stress, that threaten both investment performance and financial‑system resilience.
The OECD identifies four strategic imperatives for future‑proofing real estate:
Integrating climate risk into planning and transactions
Building open, localized, interoperable climate‑risk data
Mobilizing financial tools to support resilience and decarbonization; and
Converging global measurement and reporting standards.
Looking ahead, policymakers and market actors will need to deepen climate‑risk assessment, establish global baselines for tracking exposure, and expand financing solutions, particularly in emerging markets where most new building stock will be constructed by 2050. Stronger partnerships across governments, financial institutions, and international organizations will be essential to closing data gaps, mobilizing investment, and securing a built environment that is both sustainable and resilient for the long term.
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