Receptionist

Climate adaptation in real estate to avoid stranded assets. Charles Poulin | Published 20 minutes ago | Updated 19 minutes ago Climate adaptation of buildings is not just an ethical issue. It's a financial strategy that will ultimately prevent assets from being heavily devalued or even stranded. This is the message announced in the "White Paper on Real Estate," unveiled this morning by the firm Décarbone +, in partnership with Akonovia, La Caisse, Hydro-Québec, the National Bank, Montoni, the firm Lavery, the Petra Group, Desjardins, Galion, the Canada Green Building Council (CAGBC), the FTQ Solidarity Real Estate Fund, Sustainable Building Quebec, BOMA Quebec, Finance Montreal, CQ3E, and the Alliance for Building Decarbonization. The work, produced with a research report, a review of global literature, and the participation of over a hundred Quebec real estate industry stakeholders in 2025, introduces the concept of a "green" building - a sustainable structure characterized by measurable, verifiable, and evolving performance integrating energy efficiency, climate resilience, operating cost control, regulatory anticipation, and financial stability. These proactive assets can capture an additional value of 5%, while their "brown" counterparts may see their market value cut by 11% due to their energy and regulatory obsolescence. The White Paper also notes that an energy saving of $1 per square foot translates into an immediate increase of 4% to 5% in a building's market value. It is also noted that several financial institutions have started offering advantages on rates for "green" buildings (estimated in the work between 25 and 35 basis points), and that some insurers are already reacting to buildings that are not green with premium increases, eligibility for insurance, or reduced coverage. "What the White Paper advances is that how we manage risks has repercussions on decision-making, and therefore de facto on the value of buildings," explains Louis-Philip Bolduc, Vice-President of Akonovia. "Risks are evolving rapidly in the real estate sector, and green buildings are better positioned to face them." "Brown" Buildings Lagging Behind. If the authors of the work want to propel a change in behavior among Quebec real estate managers and owners, it's because they believe they have everything to gain, and not only when it comes to ethics. "Location, rental yield, or quality of amenities, long considered sufficient to explain an asset's performance, are no longer enough on their own to grasp its potential or risks," affirm the authors of the White Paper. "A building's ability to meet growing requirements for energy performance, climate resilience, and regulatory compliance becomes a structuring factor in its attractiveness, valuation, and financial stability," they add. Analyses and data presented by HEC Montréal thus demonstrate that "brown" buildings - those with low energy performance or high carbon intensity - show value discounts of up to 4.2% in areas exposed to climate risks. Similarly, these buildings exhibit reduced liquidity (-2.3% of transactions). "The most energy-intensive buildings risk seeing their book value diverge from their real economic value as future risks are better integrated into investment decisions," highlight the authors of the White Paper. "This White Paper transforms the perception of climate risk," says Philippe Hudon, President of Décarbone+ and Akonovia. "It's no longer just an ethical issue but a financial priority. We demonstrate that a sustainable building is a more resilient asset. An energy transition and adaptation to climate change reduce the brutal shock of having stranded assets." Regulatory Risks. It's not just the financial aspect at stake, note the authors of the work. Investors also want to protect themselves against regulatory risk, which is probably the most unpredictable. "Although the discount rate incorporates a general risk premium, it does not necessarily capture accelerated depreciation related to the regulatory obsolescence of a specific asset," indicates the book. "For an investor, the absence of prospective analysis amounts to ignoring certain future expenses (transition CAPEX), which leads to overestimating the current value of a poorly performing asset." Standardization. The work also calls for standardization of sustainability practices in the Quebec real estate industry. There is currently no common taxonomy. Several frameworks exist, note the authors, but are neither used systematically nor harmonized among themselves. Sector stakeholders have little truly comparable data on the actual energy performance of buildings, their exposure to physical risks, and their translation into financial variables, they add. "For the real estate market to truly shift toward sustainability, it should rely on objective data and a rigorous methodology," asserts Dominique Anglade, Executive Director, School of Leaders, and Associate Director at the IDEOS Hub, HEC Montréal. "The recommendations of the research report stem from a solid academic approach, yet grounded in field reality. We wanted this reference framework to move beyond intuition to a systematic measurement of extra-financial value."

LAVAL, QC - Montoni Group has broken ground on a new cultural facility in downtown Laval, set to become the largest cultural site in Québec in the past decade, with a budget of about $150 million.