Environmental Risk Screen Reports: The Due Diligence before Environmental Due Diligence

Let’s discuss, for a second, how commercial real estate (CRE) stakeholders guarantee market viability with current and future holdings. I, of course, refer to the due diligence that’s done before the environmental due diligence process begins and what should be done to create resiliency and value. What am I referring to? Performing environmental risk screening. By taking this essential step, we gain insights that are critical for any situation where risk is identified. These reports play a growing role in CRE, serving as tool for identifying and managing risks that could impact property compliance, safety, and value. For developers, investors, and other stakeholders, understanding the environmental context of a property is crucial for making informed decisions.

What is an environmental risk screen report?

Environmental prescreen risk reports provide an in-depth analysis of potential environmental hazards associated with a property. They ensure that all potential liabilities are identified early in the transaction process, as part of project pre-planning, or during development. This proactive approach protects stakeholders from unforeseen costs and legal issues. Furthermore, these reports support sustainable development practices by highlighting environmental concerns that need to be addressed before any development activities commence. By providing a detailed overview of environmental conditions, these reports help in assessing the feasibility of projects before, during, and after.

What are the key components of an environmental risk screen report?

Obviously, the components within the report depend on the company through which it is generated. Generally, however, environmental risk screen reports are very detailed, covering a wide range of factors that could influence the safety, resilience, and value of a property. One of the primary elements these reports investigate are the conditions in and around the property. This includes assessing potential pollutants and contaminants that could arise from nearby industrial activities or natural sources. For instance, a property located near a factory might be at risk of pollution from emissions, or a site near a river might face water contamination issues. By aggregating data from thousands of databases, these reports provide a clear picture of the environmental health of a site area.

What are the key benefits of an environmental risk screen report?

The insight a professional can take away from these reports varies by project need. The goal of an environmental risk screen report is to provide a thorough overview of identified concerns to help inform the decision-making process. Below are a few key benefits a report can provide for you.

• Ensuring compliance and avoiding liabilities: Ensuring compliance with environmental laws helps in avoiding costly penalties and project delays. Conducting environmental risk screen reports helps identify risks that might cause potential regulatory compliance issues, legal liabilities, and fines. Identifying and addressing these issues early and helps prevent future concerns associated with contamination and non-compliance. This can save significant costs and legal complications down the line. For example, a risk screen report on a brownfield site identified soil and groundwater contamination from previous industrial activities. A developer could use this information to decide if further action is needed to develop a remediation plan, ensuring the site meets all environmental regulations, avoiding legal costs, and mitigating environmental risks and increasing property value.
• Risk management and environmental hazard identification: Early identification of potential environmental hazards allows for timely response, reducing the risks to property value and occupant safety. Using this information to create effective mitigation strategies and manage future risks, ensures that the property is safe for use and investment.For instance, a retail chain planning to develop a new store in a flood-prone area. They used an environmental risk report to reveal the potential issues their location could cause. This early identification allowed them to redesign the building with elevated foundations and advanced drainage systems, minimizing potential flood damage before issues arise. Creating and implementing effective strategies based on the report’s findings helps ensure that the property is safe for use and investment.
• Site selection, planning, and investment decisions: Providing stakeholders with detailed environmental risk information leads to better decision-making regarding property acquisition and development. This data helps in evaluating the true value of a property. Understanding potential environmental risks and conditions surrounding a property aid in accurate valuation, helps in cost reduction, and regulatory compliance.Choosing sites with minimal environmental risks also allows for safer and more sustainable development projects. Environmental risk screen reports guide developers and interested parties to select locations that pose fewer environmental hazards, reducing potential complications during development. Additionally, efficient planning based on screen reports helps in pre-project planning in building resiliency to ongoing environmental hazards. For instance, identifying a site with good environmental conditions can influence the planning and design of future developments.
• Creating a healthier environment and community: An environmental risk screen report provides key information to help prevent projects from adversely impacting local communities and ecosystems. This promotes public health and environmental sustainability in the CRE industry. Reviewing your environmental risks and surrounding hazards promotes sustainable practices and supports long-term ecological balance and community well-being. This not only benefits the environment but can potentially enhance the reputation of stakeholders and attract eco-conscious investors and tenants.

Environmental risk screen reports have become an indispensable tool in commercial real estate transactions and development. They provide critical insights into surrounding risks, key local factors, and natural hazards. This aids in due diligence, risk management, and informed decision-making. Screen reports are the due diligence that happens before the environmental due diligence process. By ensuring risk awareness and fostering proper monitoring, these reports protect investments, promote community health, and support responsible property risk management.

How can you optimize your property risk management? Envirosite’s Property Risk Map provides industry professionals with a detailed screening of their commercial property and surrounding sites for up to an eighth of a mile. Try a Site Risk Report for yourself.

Steve Santos

As Head of Business Development at Envirosite, an ADEC company, Steve Santos leverages over 25 years of industry experience to drive growth through strategic sustainability initiatives. His extensive background gives him the knowledge and understanding to foster transparency and collaboration, ensuring mutual prosperity in environmental due diligence and sustainability.