Climate change is increasingly moving beyond partisan politics since it is no longer just an environmental issue but a financial concern for investors’ bottom line and loan underwriting. The economic impact of climate change on CRE investment is unavoidable. The recent Los Angeles wildfires are just one of many examples of this. Climate change is causing real financial losses due to extreme weather, supply chain disruptions, and rising insurance costs—and businesses, including major corporations and investors, are pushing for climate action because it directly affects their balance sheet.
Major companies are incorporating climate risk into their strategies and sustainable investment and ESG metrics have become mainstream largely because extreme weather events are affecting everyone. More frequent and severe hurricanes, wildfires, heat waves, and floods are affecting people across political lines, and insurance companies are adjusting coverage and pricing based on climate risks, making it a financial issue rather than a political one. Recent polls also show growing bipartisan support for clean energy, especially as renewables become cheaper and create jobs in local communities across the country. Wind, solar, and battery storage projects are expanding in countless areas across the country, benefiting local economies and creating jobs.
Therefore, many states, regardless of political leaning, are adopting clean-energy policies because they just make more economic sense. Even if, for the sake of argument, someone were to take the skeptical position that climate change was not real or that there were no environmental benefits to these clean-energy financing programs, the fact remains that, separate and apart from any environmental perspective, these clean-energy financing programs provide numerous short- and long-term economic benefits for the participants.
Accordingly, the question becomes, why would any prudent CRE investor not use these clean-energy financing tools, if just for the economic benefits, and if there is any chance, these programs also have environmental benefits, wouldn’t that be an added bonus? In sum, these clean-energy financing tools are used by prudent CRE investors across the ideological and political spectrum because the financial benefits are seen as savvy financial tools instead of the environmental benefits being seen as political statements.
For more information see Kristin E. Niver and Frederick H. Mitsdarfer III “The Next Era of Commercial Real Estate Finance and Lending: Navigating New Risks and Opportunities in an Evolving Landscape of Climate Risks, Sustainability, and Market Shifts,” American Bar Association Probate and Property Journal, July 1, 2025.
https://lawprofessors.typepad.com/trusts_estates_prof/2025/08/the-next-era-of-commercial-real-estate-finance-and-lending-navigating-new-risks-and-opportunities-in.html