An update to Red Book Global Standards
The RICS Valuation – Global Standards Red Book has been updated to take account of changes to the International Valuation Standards (IVS). This will be effective from 31 January 2022. The changes reflect contemporary practice developments mostly surrounding sustainability, ESG and financial reporting. The update also considers the new RICS Rules of Conduct and other external standards such as the International Financial Reporting Standards (IFRS).
The accompanying Red Book Global — Basis for conclusions explains the rationale behind updates in the latest version and highlights significant changes to ensure you can quickly identify what you must do differently to remain compliant. Specifically, it addresses the main refinements made as a consequence of the responses received to the public consultation. It has been produced purely to assist the reader and does not form part of the standards.
ESG and Sustainability
From the effective date, valuations will have to note any Environmental, Social and Governance (ESG) and Sustainability factors and consider if they could affect the valuation. The RICS specifically note that this is for secured lending
Mark Smith, Head of Valuation Advisory at Parkinson Real Estate said, “The updated Sustainability and ESG Valuation guidance note demonstrates that Sustainability is a significant part to the practice of valuation and is a key consideration to the decision making process for all real estate matters and further informs the client of real estate risk. The proactive steps we have taken in-house include the updated training of our valuers on Sustainability & ESG as well as the more simple, but just as important, measures such as the revising of our Inspection checklists, terms of engagement and reporting templates to arm our clients with the most thorough and up to date advice.”
RICS Guidance
The RICS guidance on ESG and Sustainability in Commercial Property Valuation is available to download here: http://ms.spr.ly/6011ZxQm5
The latest edition of RICS Valuation – Global Standards can be downloaded here: https://bit.ly/RedBookGS
