Beyond averages: what climate risk means for property decisions

Tue, 27 October 2026

For the property sector, the challenge of climate change is moving beyond emissions targets and long-term forecasts. Increasingly, it is about the risks sitting in front of individual buildings, neighbourhoods and regions, and the decisions being made about them today.

At The Property Conference 2026, Dr Rod Carr, former Chair of the Climate Change Commission, challenged delegates to confront climate change without complacency.

Climate change is real. Green is not the colour of politics, it’s the colour of physics.

For an industry responsible for assets that can stand for decades, the implications are significant. The question is no longer simply what climate change might mean for New Zealand in the future. It is what it means for the buildings we design, finance, insure, develop and occupy now.

Complacency is a risk in itself

One of the most striking themes from Carr’s session was the danger of assuming that a technological breakthrough will eventually solve the problem for us. Complacency comes from thinking some magic technology will come along and fix it.

Technology will undoubtedly play an important role in the transition. But relying on a future solution can become a reason to defer decisions that need to be made today. For property, that matters because many of the decisions being made now will lock in outcomes for decades.

A building designed today will operate in a very different climate environment over its lifetime. Infrastructure being planned today will need to withstand future conditions. Investment decisions made today need to consider risks that may become increasingly material over time. That requires moving from hoping future technology or future policy will resolve the problem to asking what can reasonably be done with the information we have now.

Averages don't tell the whole story

Perhaps the most relevant message for property professionals was Carr’s challenge to think beyond averages.

Averages don’t tell you what will happen on your property, your neighbourhood, your region.

A national climate projection can tell us something about the direction of travel. But it doesn’t tell an individual property owner exactly what their asset will experience, or how a particular site, building or community will respond. That creates an important distinction between climate information and climate risk. Risk is contextual.

Two properties in the same city can have very different exposure depending on their location, design, infrastructure and surrounding environment. The same climate event can have very different consequences depending on the characteristics and vulnerabilities of an individual asset.

For the property sector, this means climate considerations increasingly need to move from broad forecasts into the detail of professional decision-making.

Residual risk is the uncomfortable question

Carr argued that those who give advice and hold decision rights will increasingly be accountable for how climate risk is considered.

Your professional advice in decisions will need to take into account the residual risk.

That is a significant shift and it means asking not only what risk can be avoided or mitigated, but what remains after those measures have been taken. What risk is still present? Who understands it?

Who is making the decision to accept it? And has that risk been properly reflected in the advice provided? Carr also warned that litigation is not simply about compensation for loss. In some circumstances, it can be about accountability for poor advice. That places greater importance on evidence-based professional judgement and on being able to demonstrate how climate risks were considered when decisions were made.

For property professionals, climate adaptation therefore becomes more than an environmental consideration. It increasingly becomes part of good risk management and professional practice.

Adaptation can't wait for certainty

New Zealand faces a particular challenge here. As Carr noted, adaptation is going to be critical to Aotearoa, and the country cannot necessarily afford to compensate for every loss people may face. That makes the decisions made before losses occur particularly important. What should be protected? What should be redesigned? What should be relocated or avoided? And where is the residual risk simply too high to ignore? These are difficult questions because adaptation can involve trade-offs. There is a cost to changing buildings, infrastructure and communities. But there is also a cost to delaying decisions and allowing exposure to accumulate.

For property, the most useful response may therefore be to make adaptation part of decisions at the earliest possible stage rather than treating it as something to address once impacts become unavoidable.

The energy question

Carr was equally direct on the transition required in energy:

Get off gas. Electrify everywhere, as soon as possible.

He pointed to New Zealand’s significant renewable energy potential, arguing that the country could generate substantially more renewable electricity than it currently does. But potential is not the same as capacity.

The challenge is not simply whether New Zealand has renewable resources. It is whether we can develop the infrastructure, investment and systems required to realise that potential and put it to use. That has clear implications for the built environment.

Electrification, energy efficiency, distributed generation, storage, grid capacity and the infrastructure supporting them will increasingly shape how buildings are designed and operated. Carr identified electricity, electrons and data as two of the big things likely to shape the next 25 years.

For property, those aren’t abstract trends. They are increasingly part of the infrastructure that makes buildings functional, efficient and resilient.

Design for the conditions we know are coming

Perhaps the most practical example Carr offered was strikingly simple:

Make the ground floor of every building sacrificial. Don't put plant and equipment in the basement. It's wet down there.

The point extends beyond one design choice. Adaptation requires us to design and make decisions based on the conditions we are likely to face, rather than the conditions we have historically experienced.

That could mean rethinking where critical building systems are located, how buildings respond to flooding and heat, how infrastructure is protected, and whether assets can continue to operate when surrounding systems are disrupted. For an industry making decisions about assets that will outlast today’s climate forecasts, that mindset matters.

From awareness to accountability

Carr’s broader challenge was one of responsibility. Climate science can tell us what is happening and what risks are emerging. But science alone does not make decisions. As Carr observed, science has never led politics; it often acts as a mirror to our own self-interest.

That makes the role of people who make decisions, provide advice and shape the built environment particularly important. For property, that means continuing to advocate for the policy and infrastructure settings that enable adaptation and emissions reduction, while also making thoughtful decisions within the influence of individual businesses and professionals.

It means asking harder questions earlier, using evidence rather than waiting for perfect certainty, and it means recognising that today’s decisions can create tomorrow’s exposure.

The cost of waiting

There is a temptation to frame climate action primarily around the cost of doing something. Carr offered a different challenge: what will it cost if we don’t? New Zealand’s ability to adapt, transition its energy system and reduce emissions will require investment. But so will responding to the consequences of decisions that fail to account for changing conditions.

For property, the most important shift may therefore be from viewing climate risk as a distant scenario to treating it as a factor in decisions being made today. The industry does not need to predict exactly what the next 30 years will look like. But it does need to ask whether the buildings, infrastructure and investments being created today are capable of operating in the world we are heading towards.

The question is no longer whether climate change is happening. It is whether our decisions are keeping pace with it.