Building Resilient CRE Portfolios Through Climate Risk Management

Investors require reliable income streams and long-term investment stability to achieve their targeted returns. At RMR, we integrate sustainability directly into portfolio management to deliver data-driven performance and protect asset value.

Our proactive approach defends our managed assets against market volatility and climate risks. We implement innovative strategies that boost energy performance, lower operating costs and elevate tenant satisfaction. This focus strengthens the resilience of our managed assets and supports successful diversification.

We ensure tangible progress through measurable goals, consistent reporting and targeted capital deployment. By aligning our environmental responsibility with rigorous asset management, we create lasting value for clients, communities and stakeholders. For a deeper dive into portfolio‑wide data, performance trends and case studies, our 2025 Sustainability Report and client supplements provide a comprehensive view of programs, results and forward priorities behind our operating model.

Integrating environmental performance across the asset lifecycle

Performance & efficiency

We focus on improving building systems to reduce energy, water and waste intensity. Our team evaluates HVAC equipment and controls to optimize system sequences and support reliability. This work directly supports operational performance, cost management and compliance with emerging regulatory requirements.

Comprehensive risk management

We evaluate physical and transition climate risks to help investors understand potential financial impacts. Our team periodically refreshes physical climate scenario analyses for over 1,800 properties. We analyze exposure to storm surge, flooding, wildfire, extreme heat and other perils under short-term, medium-term and long-term future scenarios. When appropriate, we pair these findings with actionable mitigation strategies tailored to each property’s location and design.

Stakeholder alignment

Collaboration with residents, tenants, owners, third-party operators, consultants and vendors ensures our sustainability implementation aligns with broader operational needs. We engage with tenants and residents to increase awareness around resource conservation, fostering improved data visibility and improving their overall experiences in our properties.

Data-driven processes to enhance stability

We rely on benchmarking, real-time monitoring tools and portfolio analytics to guide our recommendations. Our data-driven insights help portfolio managers recognize performance trends and measure progress in a clear, repeatable way.

Energy & water management

RMR proactively manages and monitors resource use across our portfolio to identify and eliminate excess consumption. We use our proprietary Connected Buildings platform to monitor 66% of our managed energy spend in real time. We established a target to monitor 90% of our managed energy spend through this platform by 2028.

Our properties show a 16.0% cumulative reduction in energy intensity since 2019. We also achieved a 21.8% cumulative reduction in water intensity since 2019, driven by real-time water metering and smart irrigation systems.

Waste diversion & material sourcing

We prioritize waste diversion programs for our corporate offices and managed properties. In 2025, we diverted 8,982 tons of waste, achieving a 63.1% waste diversion rate which exceeded our initial goal of 50%. We’ve now expanded our waste diversion rate target to 75% by 2035.

We also focus on environmentally preferable purchasing. We nearly doubled our purchasing of environmentally preferable products with our largest supplier, jumping from 17.8% in 2023 to 34.9% in 2025. We strategically procure high-efficiency HVAC systems, LED lighting and low-flow fixtures to enhance cost savings and protect vulnerable communities.

Real-world applications: Safeguarding asset value

Proactive compliance in Washington, D.C.

RMR uses the Connected Buildings platform to reduce transitional climate risk. At two office buildings in Washington, D.C., our data-enabled compliance plan reduced projected fines under the District’s Building Performance Standards by $1.1 million.

Our Energy and Sustainability team integrated building automation systems and completed thorough energy audits that identified non-working sensors, optimized sequences for the chilled water plant and led to the installation of LED lighting upgrades. These measures eliminated fee exposure for one building and put the second building on track to eliminate all fee exposure for the 2026 performance year. Additionally, these improvements reduced energy costs by more than $100,000 annually.

Collaboration & emissions reductions in Boston

We collaborate closely with tenants to prepare for local building performance standards. At a tenant-managed medical office building in Boston, identified exposure to Boston’s BERDO ordinance. RMR performed an energy audit to estimate emissions reductions and cost savings. We implemented a whole-building occupancy schedule and installed a dedicated HVAC system for a small continuous-use space. Working alongside the tenant, we achieved an 11% reduction in energy consumption. These efforts significantly lowered exposure to non-compliance penalties and reduced operating expenses for the tenant, creating net positive cash flow.

Navigating California SB261 & climate resilience

We position our portfolios for compliance with climate-related financial risk reporting mandates, including California’s pending legislation known as SB261. Our ongoing engagement with operators and tenants fosters improved data visibility. This collaborative approach aligns with the Task Force on Climate-Related Financial Disclosures framework, strengthening governance and enhancing long-term resilience.

Pathway to Net Zero

As an organization, we have committed to reducing our environmental footprint and achieving carbon neutrality from operations by 2050. Our strategic initiatives already demonstrate significant progress from our 2019 baseline levels:

• Reduced energy consumption by 16.0%.
• Reduced greenhouse gas emissions by 32.4%.
• Reduced water consumption by 21.8%.

Our work in this space is ongoing and continuously improving. To learn more about the data, programs, partnerships and outcomes behind our platform, download our 2025 Sustainability Report.