LaSalle’s August 2021 Macro Indicators - The Rising Threat of Extreme Weather
LaSalle’s August 2021 Macro Indicators The Rising Threat of Extreme Weather In recent weeks, many records have been broken. We aren’t referring to the Tokyo Olympics but to record-setting heat, floods and fires in many parts of the world. Record heat in western North America, record rainfall in Germany and the Benelux countries, and near-record rainfall in Henan Province, China remind us that, as many scientists had predicted, extreme weather events are becoming more intense due to climate change. The pandemic continues to be front-of-mind around the world as COVID-19 variants remain ever-present, in most countries. Rising vaccination levels could allow a phased re-opening of economies and a palpable sense that a return to normal is imminent. At the same time, extreme weather events in recent weeks remind us that the post-COVID world will not be the same as the pre-pandemic one. This will not be the last time that our research team will be reporting on extreme weather and its impact on real estate. We believe that the events of the last two months represent the beginning of a long journey. At LaSalle, we are integrating climate risk analysis into our underwriting and portfolio reviews of managed assets. The research, risk management, and ESG teams at LaSalle have joined forces to bring the latest scientific analysis and projections for future climate change directly to our investment teams. This journey requires an understanding of which risks are covered by insurance or mitigated through physical improvements, and which cannot. This is a journey that all real estate investors must eventually take. Chris Langstaff, Senior Strategist, Canada Dan Mahoney, Senior Strategist, U.S. Jacques Gordon, Global Strategist