Transition risk associated with real estate exposures calls for data on energy performance

This article – which is based on a presentation given on 28 October 2021 during a webinar organised by the Belgian Financial Forum – will first explain how energy efficiency of real estate exposures may be an important risk factor for the transition risk to which the Belgian financial sector is potentially exposed. As exposures to energy-inefficient buildings are likely to be more subject to transition risk, the article also shows why financial institutions need to gather information on the energy performance of their real estate exposures and incorporate this information in their risk management.