Investors in real estate and certain types of infrastructure in areas of the U.S. and Asia-Pacific region might be at risk of losing their assets to rising sea levels and extreme weather.
A new report by MSCI Inc. found about 30% of owners of real estate listed on the U.S. Investible Market index have more than half of their assets in flood-prone regions.
Japan and Hong Kong real estate are particularly prone to rising sea levels and increasing storm intensity, while about 30% of real estate covered by the Australia IMI are exposed to severe weather.
Also in the U.S., on the East Coast in particular, thermal power generators typically are located near large bodies of water. That makes them particularly exposed to flooding and extreme weather, MSCI's report said. About 60% of total power production in the U.S. IMI is at a high risk of flooding, and 33% has high exposure to tropical storms.
The report, “Storms and Rising Seas: Mapping Climate Risk of Property and Power Assets,” looks at the investment implications of these weather factors for investors with real estate or power-related assets in their equity portfolios.