Risk management based solely on insurance coverage is a bad gamble in an era when resiliency specialists warn “water is the new fire”. Speaking at a special breakfast event in conjunction with Canada Green Building Council’s (CaGBC) recent annual national conference in Toronto, they categorized measures to avoid or minimize flood damage and prepare for long-term power outages among the most cost-effective design decisions and capital investments that building owners/managers can make.

South of the border, 2017 was the year of Hurricanes Harvey, Irma and Maria, while, just last month, British Columbians and New Brunswickers alike suffered severe flooding from a calamitous combo of heavy rain and spring runoff. Blair Feltmate, head of the University of Waterloo’s Intact Centre for Climate Adaptation, noted that Canadian insurers have paid out more than $1 billion in claims related to natural disasters in eight of the past nine years — a marked upward spike from the annual average of $200 to $500 million during the previous 25 years.

“I can absolutely guarantee you that things are going to get worse going forward,” he said. “Canada has not experienced the flooding that is coming.”

“Who is talking about resilience? Not fringe groups,” concurred Chris Pyke, a research officer with the U.S. Green Building Council (USGBC) and the driving force behind a new GRESB module, now in the data collection stage, aimed at plotting real estate portfolios’ ability to withstand and recover from climate triggered crises. “Over the last year we have had some of the greatest single-year weather losses ever. The best available scientific data says these things are going to get more severe.”

Nevertheless, the old fire still wields sway over regulatory and design parameters. Michelle Xuereb, a senior associate and sustainability strategist with Quadrangle Architects, commended the work now underway to update Canada’s model national codes, revise historical climate data that is no longer an accurate gauge for expected wind, rain and snow loads, and address new types of emergencies, in which building occupants will need refuge rather than a means of quick exit.

“Current building codes are built around fire. It’s all about evacuation,” she explained. “The sheltering in place piece, there’s no code that tells us how to do it.”

With prompting from the discussion moderator, REALPAC chief executive officer Michael Brooks, the three panellists sketched out their own stake in resiliency via design, investor awareness and best practices for climate risk assessment and mitigation. All are focused on helping to prevent loss at the decision-making stage — how to buttress and cull portfolios; where and how to build; where to locate critical infrastructure, etc. — and bring a range of informed perspectives to the larger issue of vulnerabilities in the existing built environment.

“The question is about the capacity to survive in the face of shocks and stressors,” Pyke acknowledged.

Investment-level considerations

While insurers are keenly aware of the threats, Feltmate urges lenders and credit rating agencies to pay more attention to both climate risk and diligent countermeasures. For example, best practices such as those his research team has developed with the sponsorship of the Standards Council of Canada provide a checklist that could augment other customary analyses of property deals and investor soundness.

“Banks are more or less asleep at the switch on this file,” he submitted. “This is a new stressor in the system that they have never had to deal with.”

Working primarily with institutional investors, Pyke arguably sees a more attuned demographic that is increasingly focused on how environmental, social and governance (ESG) factors affect the performance and value of their portfolios. Fear of stranded assets is one powerful driver, but so, too, is the gaining flipside notion that there are opportunities for enhanced returns. He cited the example of U.S. based Boston Properties.

“Resilience is a pitch they think their brokers can sell,” Pyke reported. “We get broad based recognition on the investment level that this is something they should know more about. On the owner side, I think we get recognition that these are reasonable questions.”

Building-level responses

For new development, some solutions are inescapably apparent. “Step number one is don’t build on flood plains,” Feltmate asserted.

Xuereb advises building owners, developers and designers to identify flood risks upfront and pay particular attention to thermal performance and how the building will retain or reject heat if mechanical HVAC systems are not operational. Key equipment should be housed above the projected flood line; materials below that line should be mould resistant, if possible. Minimizing the window-to-wall ratio and incorporating features to promote passive airflow will better resist infiltration of outdoor temperatures.

“It’s about really creating the best quality envelope your building can afford,” she said.

A designated area of refuge with its own dedicated power source could be forged in either new or existing buildings. Landlords or condominium corporations will need to consider what that power source should be, what other resources — food, water, phone chargers etc.— should be in readiness, and how building occupants will know about and make their way to the refuge if normal channels of communication are disrupted.

In this, word of mouth, as neighbours check in on each other, can be invaluable. Social connections are a no-cost, albeit intangible component of resiliency that Xuereb highly endorses. “Knowing the people around you is the best situation you can have in the case of an emergency,” she observed.

Also on the list of low-cost interventions, Feltmate recommends reconfiguring downward slopes that could channel storm runoff into a property — advice that extends to the numerous staircases to the Toronto Transit Commission’s downtown stations. “Right now, you just have a conduit for water flowing down to the subway,” he said.

Pegging the tipping point

The best practice guidelines his team has developed thus far focus on residential development, pertaining to homes, new subdivisions and existing communities, but similar standards are in the works for commercial buildings. That will include consultation with the organizations like REALPAC and CaGBC. “It has to be informed by the people in this room,” Feltmate told the gathering.

For now, panellists tallied a varying level of buy-in, from some very influential champions, like the Financial Stability Board’s Task Force on Climate-related Financial Disclosure, to greater numbers of disinterested or oblivious onlookers.

“The core problem is complacency. We think we have time, and we do not,” Feltmate reiterated. However, Pyke predicted the spur to action could be imminent.

“What is the tipping point where the evidence piles up and can’t be ignored?” he mused. “I think we are close.”

Barbara Carss is editor-in-chief of Canadian Property Management.