Over the recent years we have seen increasing trends towards understanding and managing potential environmental liabilities and risks associated with investments. These trends have developed alongside the implementation of new and existing requirements on property transactions and operational performance. In addition there is an increasing trend of financial institutions requiring environmental risks to be considered prior to approving financing. Documenting the environmental risk status at the time of transfer is now seen as standard practice by many investors throughout the region.

An environmental risk assessment conducted prior to completion can be beneficial to both parties. Not only does it identify the compliance status, but also indicates areas of potential concern such as contaminated land and asbestos. By identifying these issues at the onset reduces potential futures costs in litigation and remediation, improves budgeting, and allows for opportunities in risk and cost reduction and liability management.

Including environmental risk as part of your due diligence can significantly help in ensuring the transaction flows smoothly. More importantly however, over the period of the investment, reducing the environmental risk profile of an investment can greatly improve the value and attractiveness to the market. With the trend of increased enforcement and higher and newer standards, ensuring an investment or portfolio maintains a low environmental risk profile is vital to maximizing value.

Pacific Risk Advisors specializes in working with real estate investors, fund managers and financial institutions to help identify and manage their non financial risk (environmental, social and governance) profiles in individual investments or throughout a portfolio. Pacific Risk Advisors operate throughout the Asia Pacific region.


James Pearson
CEO
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Pacific Risk Advisors