Emerging financial risks from climate changes on building assets in the UK
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Date
2018-08
Journal Title
Journal ISSN
Volume Title
Publisher
Emerald Publishing Limited
https://www.emerald.com/insight/content/doi/10.1108/F-05-2017-0054/full/html
Abstract
Purpose – The different scenarios of climate change, such as floods, temperature change and storms, are considered the main drivers influencing the building sector. Understanding how and when these climatic risks will emerge, specifically financial risks, is pivotal in dealing with these risks and applying the adaptation and mitigation strategies so as to minimise the effects and damages. Thus, the purpose of this paper is to discover the financial risks emerging from climate change impact on the building sector and determine the timescale of occurrence for such risks.
Design/methodology/approach – The research methodology formulated in this study is founded on a systematic literature review and statistical analysis. Built on this, the potential financial risks emerging from climate change scenarios (CCS) were identified and designed as a questionnaire to collect data from UK expert professionals. Statistical methods were used to rank and compare the outcomes of the survey.
Findings – The research observed that around 40 per cent of the participants in this study indicated that one-third of the total identified financial risks (23 factors) would emerge within 5-10 years. The most important factors are increased insurance excess and additional expense in insuring buildings in flood risk zones, whilst the least important financial risks are inability to repay debts and un-insurability because of climate change.
Research limitations/implications – This study is limited to the UK, and regional implications are not covered. However, it is a starting point.
Originality/value – The main contribution of this research project is establishing and developing clusters of the potential risks emerging from CCS, which can assist professionals in the building sector in the management and development of strategies to cope with these emerging risks.
Description
'This paper has been selected by the editorial team as an Outstanding Paper in the 2019 Emerald Literati Awards’
Keywords
project management, climate change, risk management, facilities management,
building, assets, asset management, building life cycle, financial risk, emerging risks
Citation
Alzahrani, A., Boussabaine, H. and Almarri, K. (2018), "Emerging financial risks from climate changes on building assets in the UK", Facilities, Vol. 36 No. 9/10, pp. 460-475.