Europe’s Most Climate Resilient Cities Revealed
Global real estate advisor, CBRE, has today published its ranking of European cities according to their resilience to the impacts of climate change. The report, ‘European City Sustainability Study 2024,’ evaluated the performance of 42 cities across Europe in relation to a number of factors, from transition risk, building performance standards and level of air pollution to future flood risks and ability to implement renewable energy. Three UK cities ranked within the top ten, including Birmingham, London and Manchester.
The study provides real estate professionals and investors with insights to help understand different markets, the opportunities and challenges they face.
Out of 42 cities assessed, the study ranked the top 10 in terms of climate resiliency as:
- Amsterdam, The Netherlands
- Birmingham, United Kingdom
- Gothenburg, Sweden
- Helsinki, Finland
- London, United Kingdom
- Manchester, United Kingdom
- Oslo, Norway
- Paris, France
- Rotterdam, The Netherlands
- Stockholm, Sweden
By improving the understanding of Europe’s key cities in terms of climate readiness, we hope to galvanise not only the property industry and investors, but also broader stakeholders, to take note of the need to prepare against the worst effects of climate change. While many cities may regard themselves as being leaders, this survey holds some surprises and warns against complacency.
A key finding of the study is that real estate exposure to climate risk varies significantly across Europe, as does the challenge to decarbonise the built environment, which accounts for 30% of carbon emissions globally.
Within the study, there were three primary categories upon which each city was assessed:
- Transition risk: the risks to business associated with societal and economic shifts towards a lower-carbon future
- Physical climate risk: the particular city’s vulnerability to climate change
- Mitigation and Adaptation Measures: the city’s ability to implement recommended environmental initiatives to limit climate change
UK cities have performed particularly well, with Birmingham, London and Manchester all appearing in the top ten. This is testament to efforts so far to prepare for the inevitable effects of climate change. However, there is much work to be done and no room for complacency if we are to deliver against the country’s much needed net zero targets.
According to the study, the ten most resilient cities have a number of factors in common, providing a useful roadmap for other European markets to consider.
Transition risk:
- Over half have city level net zero carbon targets earlier than 2050.
- Over half have prime capital values higher than the sample median, making relative refurbishment costs lower.
- Over half have some degree of Minimum Energy Efficiency regulation preventing the lease of energy inefficient stock.
Physical climate risk:
- Most have lower historic damages from climatic hazards than the sample average and a low future flood risk assessment.
- Half have low baseline water stress.
- Almost all have air pollution lower than sample average.
Mitigation and adaptation measures:
- All have increased use of renewable energy over the past five years.
- Most have more than 20% of their total office buildings certified.
Under our analysis, markets that set more ambitious targets and introduce environmental regulation are more resilient to climate risks. Likewise, markets at threat from physical risks, which have invested in defense systems and adaptation early are more resilient. In terms of mitigating climate change, the generation of renewable electricity and use for building heating is one of the most significant steps a market can make. This provides lessons for markets hoping to become more resilient to climate risks where there remains a huge opportunity to make an impact.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2022 revenue). The company has approximately 115,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.