MSCI 2020 ESG Trends: Climate change and real estate investment

MSCI expects real estate investors to face challenges both from physical risks, in the form of weather events, and regulatory risks, in the form of stricter regulations on properties’ ESG credentials in the coming years. The firm published its global 2020 ESG Trends report, identifying five trends to watch based on new MSCI-led research. This is authored by Linda-Eling Lee, global head of research for MSCI’s ESG Research Group; Meggin Thwing-Eastman, head of impact and screening research for MSCI ESG Research; and Ric Marshall, executive director in MSCI’s ESG research team.

The prospect of regulatory risk and a “brown discount” could be one of the most significant concerns for real estate investors in 2020. The need to “green” a property portfolio is becoming imperative as investors face challenges coming from both physical and regulatory risks. In 2020, real estate investors should consider the following: