Tackling the wicked challenge of climate change risks to property: are Australian valuers prepared?

Abstract

PurposeThis research investigated Australian property valuers' identification and consideration of physical climate change risks in valuation practice.Design/methodology/approachThirty Australian valuer members of the Australian Property Institute from a variety of specialisations were interviewed. The semi-structured interviews explored climate change risks and the extent of risk investigation and consideration in valuation practice. The analysis utilised the Moser and Luers (2008) climate risk preparedness framework as a lens to evaluate current valuation practice in Australia.FindingsThe analysis reflects that while physical risks are easily identified and engaged with by valuers, correspondingly, there is a lack of understanding of and engagement with, climate change risks. This supports the need for better information sources and guidance to inform valuers of climate change risks and the development of specific mechanisms for the consideration of such risks to be included in valuation processes, practices and reports.Research limitations/implicationsThe research was limited by its sample size and qualitative approach. Therefore, the research is not a representative opinion of the Australian profession; however, the analysis provides the perspective of a range of valuers from across Australia with different valuation specialisations.Practical implicationsThis research has established that valuers have the potential to be prepared to address climate change in their professional capacity, as described by Moser and Luers (2008). However, they are constrained by information communication, access and detail and subsequent market awareness of information on climate change risk exposure on properties. There is a need for further support, guidance, information and tools, as well as awareness-raising, to enable valuers to accurately identify and reflect all risks affecting a property in the process of valuation.Originality/valueThis research provides the first investigation into the consideration of climate change in valuation practice. Property stakeholders—owners, investors, financiers and occupiers—are escalating their climate change risk analysis and reporting for property portfolios and organisations. This research suggests that valuers also need to be aware of the changing dynamics of market reporting and decision-making related to climate change risks to ensure appropriate reflection in valuation practice.