Sep 3, 2025

Adapting real estate to the climate: from diagnosis to return on investment

EVENT

Tomorrow at the SIBCA Exhibition, Tardigrade AI will speak on a strategic topic for all asset and real estate portfolio managers: how to make climate change adaptation a lever for financial profitability.

The climate, a financial risk

Climate risks are not just environmental: they are financial.
They affect:

  • the asset value of properties,

  • their use (comfort, business continuity),

  • and their insurability.

 

Ignoring these risks means accepting a depreciation of assets and increasing costs related to claims.

The key: a robust and actionable diagnosis

One can only manage what one measures. However, too many diagnoses commonly used by the profession rely on outdated or overly aggregated data, on scores or qualitative information (low or moderate risk) that do not allow for assessing financial impact, nor for selecting and sizing the work or actions needed to reduce risks and enhance the property's value.


A good diagnosis should rely on:

  • Recent and certified data (CMIP6, SSP scenarios, AR6 IPCC projections),

  • Fine geographical scale (≤10 km for drought and heat, ≤20 m for flooding),

  • Comprehensive hazard coverage (floods, heat waves, droughts, fires, storms, RGA, etc.),

  • Clear climate and financial metrics, understandable, directly actionable, comparable worldwide to facilitate portfolio management approaches and reduce risks in supply chains

  • Real-time monitoring and geolocalized alerts, leveraging AI advancements to anticipate up to 72 hours before a climate event and take preemptive action to reduce impacts on properties and people

  • Regulatory compliance (CSRD, Taxonomy, double materiality).

 

Decide with full knowledge

Having actionable values for all climate risk metrics, year by year up to 2100, on a global scale and for any type of peril, is essential. This notably includes the potential maximum water height and its probability of occurrence in case of rainfall flooding — responsible for the majority of CatNat orders in France — as well as a 3D visualization that allows understanding risks around a site and those related to access, energy, water, and communication networks.

This level of precision is essential to produce the financial metrics that allow decisions to be made:

  • EAL (Expected Annual Loss): average amount of expected economic losses each year.

  • CVaR (Climate Value at Risk): potential loss in an unfavorable climate scenario.

  • ROCA (Return on Climate Adaptation): the ratio of benefits (avoided losses, increased resilience) to the costs of adaptation actions.

 

These indicators help answer the real question: is the risk acceptable, should it be reduced through adaptation, or transferred to the insurer?

Our message at SIBCA

Tomorrow, Tardigrade AI will give real estate managers the keys to choosing a relevant diagnosis, capable of transforming the climate constraint into a lever for value and sustainable performance.

Join us at the SIBCA Exhibition to discover how to transition from climate diagnosis to return on investment of adaptation.