The property industry is rallying around flood mitigation, but what about heat, wind, and cold? In this panel discussion recorded at Transform 2026, JLL's Georgia Warren-Myers and Julian Sutherland join host Jamie Wallis, from the Green Building Council of Australia for a frank conversation about climate resilience at scale. They explore why flood protection has become the go-to strategy, examine real examples of climate risk already affecting asset values and tackle the uncomfortable questions around valuation. This discussion reveals the gaps between climate awareness, action and market recognition and what needs to happen to close them.

Jamie Wallis: Welcome to start of day two of Transform.

So I would like to introduce our two guests here. We have, uh, Georgia Warren Myers, who's head of Sustainability, strategic Value Advisory Global at JLL. And we have Julian Sutherland, head of Sustainable Assets apac. So we, we are talking about exploring climate risk at scale, so we're gonna talk a little bit about asset management, how the industry is progressing. Um, so from your perspective, how are you seeing the conversation around climate related portfolio risk?

How has it evolved over the last, say, five years or so? Um, and do you think the asset management industry is responding at the right. Pace, essentially.

Georgia Warren-Myers: Well, I think we've seen quite an escalation. So, um, we saw the banking sector kind of go through some of that, uh, I suppose re recognition, um, with the floods and the fires that were happening in the late teens.

But you also TCFD kind of. You know, come into action and start having and being picked up by different organizations who are forward thinking about this particular element. Um, and so we've kind of moved forward to where we've got the Australian Sustainability reporting standards that has kind of supercharged this particular aspect in the Australian context.

Um, and we're really starting to see that shift in mindset of, okay, well hang on a sec. Um, we, when we had those kinds of risks, I wasn't aware of those risks, and we're now starting to see that information also flowing up to board level. Um, and in that decision making space, and I think that's a really great step forward.

Um, it will be interesting now that we've got the reporting happening, what level of action is then taken around those particular, um, risks?

Jamie Wallis: Yeah.

Julian Sutherland: Yeah. I think, um. So the whole idea of, of, um, asset protection really does start at that portfolio level. Although we, I mean, I, I'm a buildings person, so I can talk about it at an asset level easily, but actually it starts at portfolio level, really understanding what, what are the risks across all of those assets, and looking to find the common elements as well as the individual elements.

And. I think looking at it at this highest level allows you to set the strategy in place that then can play all the way down through, into the, into different assets. I mean, I think we, we understand the perils associated with climate risk quite well. And, and I guess what we need to do is, is really, I think we do recognize that these things are playing out all around us.

Uh, I mean, actually just sitting in Sydney for the last couple of weeks, you know, we had wildfires on the, on the north, on North Sydney on Monday. Which completely blanketed the city in, in, uh, in uh, smog when, and then a couple of weeks ago we had yachts on the rocks 'cause there was a big blast of wind down the harbor on the Sunday afternoon.

Uh, and then I think Tuesday night we had, uh, record amounts of rain in, in, in North Sydney Mossman 95 millimeters in, in one night. And now these are like little local events, uh, let alone the sort of national events that we see. So I think. You know, we're, we're, we're planning for a future event, but actually these things are here and now.

Um, and so we really need to again, get, get, get on with this. But yeah, having, having a. Um, a plan through from portfolio to asset level is really important because then you, you've got a structure on which to, um, understand what to do, when to do it, and how to do it.

Jamie Wallis: Yeah. So the, I mean, these impacts are becoming very real.

Where, where have you seen the most improvement with your clients over the last. Five years or so in, in how assets are responding or portfolios responding to that climate risk?

Georgia Warren-Myers: Well, I'd probably say this is, you know, kind of also engaging back with my good old academic days. But, you know, I did a lot of work, um, a number of years ago that we're kind of looking at, and I'll link to Bronwyn King's kind of comment yesterday about divestment being a really bad word and that, um, property investors, developers don't wanna hear that word.

Um, and so we were talking back then about, you know, climate risk and how this was then going to, you know. Drive different decisions within, um, portfolios. And would that lead to divestment of, you know, risky or perceived risky assets? Um, I think we've also got. There's an element, I think a don't say the word divestment 'cause no one likes that one.

Um, I think there's more strategic, uh, choice in terms of what's happening in the portfolios instead. Uh, but I'm also seeing a number of opportunities emerging as well. So there's positive stories in terms of, okay, all right, it's got a risk. It's not, you know, uh, oh my God, this asset's gonna be wiped out, kind of thing.

It's like, okay, so what can we do? And looking at different measures in terms of what can actually solve. The issue for the asset and then make it more resilient. Now that ranges from really simple, um, things like flood covers, um, to basement levels, um, to really complex kind of adaptation measures. But we've also starting to see success stories, um, over in Hong Kong where they have the black rains and the typhoons and things like that.

Um, link REIT have been successful in terms of, uh, putting in a whole range of adaptation measures. That has then led to a reduction in their insurance premium for one of their severely affected assets.

Jamie Wallis: Mm-hmm. And at the as asset level, maybe?

Julian Sutherland: Yeah, I guess we, we see a lot of, um, work around, I guess the obvious ones around flood.

I mean, it's, it's the sort of biggest, it's to some extent the easiest one to get, get, get a hold of. Uh, so flood mitigation, surface water runoff, precipitation, um, it's, it's also got. Quite a lot of well understood solutions and swes and elevation and lifting the ground floor up. And you know, actually it's probably the one we, we, we tackle the most.

Although it's also, you know, quite difficult because we are trying to put in place, uh, solutions to random events. You know, we can plan for certain rainfalls, we can plan for certain intervals, but actually these events are likely to exceed that or. Operate in a different way, or the rain comes with wind and, you know, all these sorts of different complexities.

So it is a combination of physical mitigation and management as well, because you, you've, you can only make the physical asset so resilient at there's a point at which that randomness has to be tackled by people and management and taking action. Uh, getting the flood covers in place soon enough. Is a, is a people action and management action.

So how do you know when to do those sorts of things? So it's definitely really important that those two things come together, the physical and the management. Uh, and then, and then actually understanding how all that plays and actually testing those systems as well. There's no point in having them if no one knows they're there, uh, hidden in a design report somewhere on the shelf in the as-builts.

Um, you've actually gotta get those items out into the real world. Run some scenarios, do some testing, and now we see that happening in sort of big critical buildings like data centers where, you know, there's really well established operational management plans. Um, that's really best practice and we, we probably need to take some of that into, you know, normal commercial assets, uh, so that we know how to react.

'cause I've only got a certain amount of time.

Jamie Wallis: Yeah, that's right. And I mean, and then, then there's a sort of precinct approach versus asset level as well. Like it's, no, no. Good having a, you know, resilient. Asset as an island in a flooded precinct, which you can't access.

Julian Sutherland: Yes. Correct.

Jamie Wallis: It does get quite complex.

Julian Sutherland: Yeah. And, and you know, if you've got a major flood event, you know, the building might be fine, but actually people probably can't get to work.

Georgia Warren-Myers: Mm.

Julian Sutherland: Yeah. Um, and we're, we're quite lucky now that people, a lot of people can work from home, which is probably. Quite a nice, uh, mitigation method, but not everybody can do that.

So, you know, large legis logistics facilities rely on people being able to get to the building. The building might be fine, but if you can't get to it, you've gotta deal with it. So that becomes part of how quickly do we get back to normal? What, what's that likely to look like?

Georgia Warren-Myers: But we've also got more longstanding like transaction evidence, um, from our cat markets team, where shopping center was absolutely fine, not in the flood zone, um, but when it was taken to market, basically because the catchment zone and the primary, um, market area that you know, is serviced by that, um, shopping center, um, was severely affected by, uh, flu risk zone one.

Um, it saw a 75 basis point chipped to the price. So, you know, we are already seeing elements of climate risk being priced into the market.

Jamie Wallis: Yeah. We've also got, when we look at the sort of regulatory context that we're in as well, we're seeing, you know, the increase in reporting requirements A SRS.

Mandatory disclosures. We've got, you know, investors asking, I think, increasingly sophisticated questions around particularly resilience. So, you know, as, um, you know, part of a global network of rating tool owners, we know investors are coming to us and asking for, you know, more and more information, particularly around resilience.

And they wanna see language harmonized across global rating tools and metrics that. You know, uh, a real and actionable and, um, comparable across jurisdictions as well. So with, with that sort of increased reporting, benchmarking sort of requirements on asset owners, are you seeing, um, this driving real, you know, genuine risk identification?

Um, or are we seeing that sort of compliance first, insight second dynamic with increased reporting?

Julian Sutherland: I like the reporting. I think the reporting is great because the reporting drives awareness and it puts it straight up to the C-suite with a really big number attached to it. And c-suites respond to large numbers and that's great.

So that then of course, cascades down into, well, what we're gonna do about minimizing this big number. Um, so I, I think that's great. And I think. 'cause 'cause you, you, you need to have support at all levels to, to undertake these projects. As a designer, when you come to the table with solutions and ideas, um, and you go, well, we could do this to protect this building, someone's gonna say, why, how, what?

We go, well, they're, because you wanna avoid that $3 million loss, that kind of. Changes the discussion quite quickly. And it, because these things are expensive solutions typically, you know, managing the height of a building, the landscaping, huge amounts of water retention. They're expensive items. So they need to have expensive consequences to, to really make people understand why you do them.

So I think it's great. I think that the, the, the reporting's right, and the, the more it becomes standardized, the better because then we all can see things in the same way. And we're not kind of, kind of worrying about all the differences between the numbers and things. It's like the consistency's really good.

Mm.

Georgia Warren-Myers: But in terms of kind of connecting with, thinking about, you know, uh, frameworks and, you know, equalization across countries and things like that in terms of what is defined as resilience and being able to, you know, easily kind of just say, oh, you know, it's got a resilience certification or something, that's not that easy.

Buildings are really quite specific. They've got very specific challenges. Um, and whilst a lot of the climate risk elements are kind of dealt with in kind of separate little buckets, you know, when you've got multiples all kind of happening at the same time, there's an escalation in terms of what can happen and also the randomness.

So when you look to Spain and um, Valencia, where they had the, um, flash floods last year, none of the climate. Risk forecasts or even the local forecasting ever forecast that those areas would be flooded.

Jamie Wallis: Yeah, it's a really good example.

Georgia Warren-Myers: So, you know, we've still got that randomness per se, that we've need to be thinking about.

Not just if it pops up on a risk sheet saying, oh yes, you know, uh, it's at risk of flood. I think we should be thinking more structurally about resilience in all assets, because we don't necessarily know when these things are going to happen all year.

Jamie Wallis: Um, so do you think, uh, with, with all of this reporting and requirements, are we seeing that translating into sort of genuine action?

I mean, it, it, I think it's, I agree. It's great that we're measuring, benchmarking, understanding. Are we then seeing that flowing through quickly enough into, you know, actual outcomes?

Julian Sutherland: Oh, I guess nothing ever seems to happen quick enough. Um, you know, we're probably gonna see a few more. Consequences before, I guess it, it rarely accelerates.

I think that's inevitable. But I, I think, you know, new buildings with new buildings and new assets, we can see that, that people are already on the journey and that, you know, design codes are being updated. Um, the issues of resilience are being built in. It's much, much easier at that point to, to, to do this.

And, and I think that's happening, which is great. It's the existing assets where it's much more difficult. I mean, you can't just pick up a 45 story building and lift it a meter. Um. You could try, but I think it'd be quite tricky. Um, but you know, so these sorts of things are more challenging. So there's gonna be inherent risks there.

And I guess that's when you start getting into the discussions of, do we really want to, is it too expensive to make this building resilient and therefore, actually do we need to. I'm gonna use a terrible word, get rid of it. Um, to, to protect the portfolio. I think that's important. But there's a lot of things you can do and it, and it, it, I think in, in, in new builds, you can build a lot more resilience indirectly into the asset.

With existing buildings, it's gonna become a little bit more of the managed. Scenario, you can only do so much. And water is the kind of real classic one because keeping water out of the building is really hard. I mean, it finds, always, finds the smallest hole somewhere. Um, and so to absolutely make sure every single input inlet is, is, is protected, is really, really challenging.

And even then the water finds a way over it, under it, round it, whatever. So we talk about sort of dry proofing and wet proofing. Wet proofing. We're trying to keep the water out. Dry proofing is actually avoiding it to start with, so the new assets can take a dry proofing approach where we're staying away from the water.

The, the existing assets are gonna have to take a bit more of a, um, a wet proofing asset. But I think, you know, we, we do talk too much about the water side. We don't talk enough about the heat, the wind, and the cold side, which is, you know, associated with the envelope. It's ability to withstand all of these temperature extremes.

Um, so we need, we need to kind of probably focus a little bit more on some of that, understand some of those dynamics a little bit more.

Jamie Wallis: Yeah. Yeah.

Georgia Warren-Myers: In terms of action, I'd say we are not doing enough. Um, I'll put it bluntly. Um, I think we're very reactionary. We're not really thinking far enough ahead.

We're still building new residential subdivisions in areas that are flood zones. Um, you know, or exposed to bushfire risk and things like that. Um, I think we really need to start shifting the mindset around, okay. And particularly for existing communities. You know, that are going to be at risk of, um, future sea level rise, erosion inundation.

Uh, we actually need to be thinking more strategically about how we think about managed retreat, how we actually make that work. Um, not a lot of, it's not a very. Um, acceptable policy in many places because, you know, it has multiple ramifications socially, economically, um, the whole lot. But we really do need to start thinking about these things in real terms because it.

If we are waiting for the events to happen, it's, it's too late, too late. Um, and where we are seeing, you know, lots of action happening is usually because there has been some kind of event that has triggered, oh my goodness, this is a huge risk and it's probably gonna get worse. So we need to take action on this.

Jamie Wallis: Yeah. Yep. I'd love to bring our audience into the conversation. Oh, we've got a question here from Lauren.

Audience 2: Um, Laurie Kirs from Haven. So I work in shopping centers. Um, I'm really interested in, uh, you just said that. Drive action, but we've seen plenty of events. If we take fire as a great example, over the last even five years yet, there's a great project on the Norton Beaches.

It's been, it's a new subdivision. It's proposed to go into areas of huge fire risk where even the RFS have said, do not do it. Is it going to take mitigation upheld in the court to actually make a change when we can see buyer? The example.

Georgia Warren-Myers: Mm-hmm.

Audience 2: The, the events of the last five years have not influenced that project whatsoever.

Georgia Warren-Myers: Yep.

Audience 2: And there would be more. It's not just one.

Georgia Warren-Myers: And I would definitely say yes, more than likely it is going to take to that point, unfortunately, for that to happen. And it's going to happen at scale. So, I mean, there's already, um, we wrote a paper a number of years ago about, you know, uh, the continuous building in areas that are known at risk.

Now when we start looking at the contamination space, um, for residential subdivisions and things like that, there's a, a leading landmark case in Victoria, the Brooklyn Green now proportionate liability was allocated to the developer, to the local council and the EPA for the decisions associated with that and the losses associated, uh, to the community that were impacted as a result of that.

It is elements like that that actually set the precedent. For future climate related risks. If we un, if those risks are known and the approvals are still given to go ahead and then something happens, that certainly if you are looking at the case law and um, existing precedents, there is effectively an opportunity.

There and unfortunately I suspect it's probably going to take someone really kind of nailing this to actually really start driving reforms, particularly in the planning system, to really make sure that there's not going to be developments built in that risk areas.

Audience 3: Yeah. We've just been through a SRS for our retirement living portfolio and, um, discovered all the.

Delightful risks lurking across 67 retirement villages. Lots of, uh, flood and fire risk and yeah, bushfire, the smoke inhalation. Mm-hmm. Um, but one of the things I established when I did the escape one and then the, um, the retirement living portfolio was that publicly available information is appalling, right?

It all. It's amazing in Brisbane for flood places where there have been big impacts have generally got on with trying to disclose that and make the public aware and make property owners aware. Northern Beaches, super highly exposed from Coastal and River and fire. They've got an amazing online tool.

City of Sydney, city of Melbourne, appalling like. Seven PDFs, page 273, a granular PDF. Zoom in to see a pixel, which maybe represents my property or doesn't, and is it light blue? Is it dark blue? Is that one meter? Is that two like appalling level of public information availability? Clearly there's this massive information asymmetry in the market where some people have the money to pay to get the consultants who can give you the information.

The majority of people, the poor individual resident, is left at the mercy of whatever they can get from council and through the planning process. Like how do we solve this at a state level and at a federal level to get. A consistent information base about the risks that, you know, one of the most exposed climate risk exposed countries on earth faces.

Like what's your view on this?

Georgia Warren-Myers: Well, a, from federal level, we do need to actually have a collective database that is modeling that across. At the moment, we've got very piecemeal actions, as you just pointed out, um, across the states, even down to that local government level. That doesn't necessarily help what's going on.

But one of the biggest things, um, that we did research on a few years ago was around, um, disclosure. And so we examined in Victoria, we have a section 32 that has to go with every contract, which albeit is probably, I don't know how many actually read it, but when you actually start matching that with property data and transactions and the implications around pricing, where there is information that is flagging, that there is a risk, the market is pricing that in where there is no signals.

Around the risk it is not being priced in. Um, and so that was quite clearly, uh, done in a, a study that we did in Victoria in one of the local councils that's going to be subjected to, um, sea level rise and also, um, future flooding risk, um, substantially so it was kind of very much trying to highlight.

You know, it's not just the issue of what the flooding is right now, but how sea will rise will shift those flood levels in the future as well. Um, and that's not being taken into account, particularly when you start thinking about the lifecycle, um, of ownership. But yes, disclosure I think is one of the biggest ones.

Jamie Wallis: I think Emma's got a question. I think Joanne, after.

Audience 4: Yes, thank you. And maybe it's an extension of Chris's question in a way about information that's available, but more so maybe the interpretation of that existing information. Um, we had a number of conversations with our insurance panel providers over the last number of months, and what was really interesting as part of that conversation was, you know, we, we took them through the process that we've done around exposure, the adaptation strategies that we have in place, therefore, our interpretation of inherent risk across our portfolio.

They shared that they ran, uh, a number of client portfolios through various different existing data sets that are available in the market, and the result was wildly different interpretations of exposure. So, um, they, they were quite interested in how we chose that data set, what, why we chose that particular one.

Um, and when you have insurance providers making a decision. A very material decision on a portfolio, on insurability risk. On the back of a one data set, you've got value in the rest of the market. Also pricing in risk based on another data set and our interpretation will also be different. How, how do you see all of that evolving and.

And, and maybe you've partly answered the question in terms of policy, policy can, can help solve for some of it, but it's, it's clearly a challenge that is emerging that can have really material impacts, um, in capital markets and transactions.

Georgia Warren-Myers: Yeah, I think the big one is the insurers are sitting on a, a wealth of information, particularly around lost claims and existing risks.

They've got their future models as well. Um, they have some of the best databases. In the world, uh, they keep these very closely guarded. Um, but also you've gotta remember that the insurers can walk away in 12 months time because you're, orthumb_upthumb_downcontent_copy