--- title: Why you should follow Norges Bank’s lead on managing risk in commercial real estate portfolios description: Banks must manage property risks and increase green lending in their portfolios. See how Norges Bank’s outlook sets the trend for a more competitive future. image: https://netto.eco/hubfs/taylor-friehl-SNO1N_2_7_I-unsplash.jpg --- [![Netto logo](https://netto.eco/hs-fs/hubfs/Netto%20logo.png?width=150&height=59&name=Netto%20logo.png "Netto logo")](https://netto.eco/?hsLang=en) [![Netto logo](https://netto.eco/hs-fs/hubfs/Netto%20logo.png?width=150&height=59&name=Netto%20logo.png "Netto logo")](https://netto.eco/?hsLang=en) - [Product](https://netto.eco/en/netto-product) - [About Netto](https://netto.eco/about) More results En - English - [Norsk](https://netto.eco/no/bibliotek) [Login](https://dashboard.netto.eco/?lang=en) [Book a demo](https://netto.eco/en/contact?hsLang=en) [Login](https://dashboard.netto.eco/?lang=en) [Book a demo](https://netto.eco/en/contact?hsLang=en) - [Product](https://netto.eco/en/netto-product) - [About Netto](https://netto.eco/about) [Buy Now](https://www.hubspot.com/) [Banking](https://netto.eco/en/the-library/tag/banking)[Green finance](https://netto.eco/en/the-library/tag/green-finance) [Risk](https://netto.eco/en/the-library/tag/risk)[property](https://netto.eco/en/the-library/tag/property) # Why you should follow Norges Bank’s lead on managing risk in commercial real estate portfolios [![Erlend Bolle](https://netto.eco/hs-fs/hubfs/1718960102390.jpeg?width=40&height=40&name=1718960102390.jpeg)](https://netto.eco/en/the-library/author/erlend-bolle) by [Erlend Bolle](https://netto.eco/en/the-library/author/erlend-bolle) [**Norges Bank**](https://www.norges-bank.no/en/), Norway’s central bank and manager of Norway's sovereign wealth fund, is sounding the alarm. In their latest [Financial Stability report](https://www.norges-bank.no/en/news-events/publications/Financial-Stability-report/2025-1-financial-stability/) (2025 H1), they highlight how banks are heavily exposed to [climate and transition risk](https://netto.eco/en/blog/transition-risk-in-property-portfolios?hsLang=en) through commercial real estate (CRE), and how outdated, inefficient buildings could become a major financial liability. This new report from one of the world's largest managers of capital is a very clear signal that banks need to pay attention to: Take. Transition Risk. Seriously. ### It's not just Norges... In a [recent BankShift interview](https://www.bankshift.no/nyheter/norges-bank-advarer-om-tung-eksponering-mot-naeringseiendom-vil-treffe-bankene-hardt-om-det-gar-galt-der/397655), [Bengt Olsen](https://www.sparebank1.no/en/nord-norge/about-us/about-us/executive-management-team.html), another industry leader and Chief Financial Officer at [Sparebank 1 Nord-Norge](https://www.sparebank1.no/nb/nord-norge/privat.html), underscored these potential risks by stating, *“Commercial real estate is typically one of the largest segments in a bank’s balance sheet, so it will hit banks hard if things go wrong there.”* His remarks reinforce the urgency for banks to act before problems escalate. ![Sparebank 1 Nord Norge](https://g.api.no/obscura/API/dynamic/r1/ece5/tr_2000_2000_s_f/1552295880000/avno/2019/3/11/10/SNN_nye%2Blokaler_30-31-FWS03298.jpg?chk=4F07D9) ### Property is a climate and credit risk This risk is so high because buildings account for nearly [**40% of global emissions**](https://www.forbes.com/sites/davidcarlin/2022/04/05/40-of-emissions-come-from-real-estate-heres-how-the-sector-can-decarbonize/), and in Europe, the aging building stock is facing **tightening climate regulations**. From **EU** **Taxonomy **compliance to **SFDR and CSRD disclosures**, banks must now account for the carbon intensity of their property-backed loans. As it's already been pointed out, CRE represents **nearly half of banks’ lending**. As the market shifts and regulations tighten, exposure to inefficient assets can quickly turn into stranded assets. ### The smart move? Transition now Norges Bank’s proactive stance shows that it's no longer enough to monitor CRE risk. It has to be actively managed and mitigated. Leading banks should integrate **climate and transition risk into credit decisions** and begin to scale **green and sustainable lending** to future-proof their portfolios. ### How to fast-track profitable green lending Netto is a cloud-based platform that helps banks transform high-risk buildings into **profitable, low-carbon assets**. By embedding real-time energy and climate data into credit workflows, Netto enables banks to: - Identify risk hotspots: ![Total Doctors (31)](https://netto.eco/hs-fs/hubfs/Total%20Doctors%20(31).png?width=302&height=163&name=Total%20Doctors%20(31).png) - Assess upgrade potential: ![Investment Card (24)](https://netto.eco/hs-fs/hubfs/Investment%20Card%20(24).png?width=349&height=194&name=Investment%20Card%20(24).png) - Originate green loans with confidence. - Ensure compliance. Whether you're a relationship manager, ESG lead, or risk officer, Netto gives you the tools to **act on emissions** and **unlock sustainable revenue**. **Want to see how Netto can help your bank lead the transition?** Book a free 15-minute demo [here](https://meetings-eu1.hubspot.com/boerge-astrup?uuid=e2dbfd70-56ca-4bfd-bc24-4322564cfe71).  Share this [Share on X](https://x.com/intent/post?url=https://netto.eco/en/the-library/norges-bank-and-transition-risk&text=Why+you+should+follow+Norges+Bank%26rsquo%3Bs+lead+on+managing+risk+in+commercial+real+estate+portfolios) [Share on Facebook](https://www.facebook.com/sharer/sharer.php?u=https://netto.eco/en/the-library/norges-bank-and-transition-risk&t=Why+you+should+follow+Norges+Bank%26rsquo%3Bs+lead+on+managing+risk+in+commercial+real+estate+portfolios) [Share on LinkedIn](https://www.linkedin.com/shareArticle?mini=true&url=https://netto.eco/en/the-library/norges-bank-and-transition-risk&t=Why+you+should+follow+Norges+Bank%26rsquo%3Bs+lead+on+managing+risk+in+commercial+real+estate+portfolios) Previous story [← What is transition risk?](https://netto.eco/en/the-library/transition-risk-in-property-portfolios?hsLang=en) Next story [Helping banks turn risky buildings into profitable loans →](https://netto.eco/en/the-library/turning-risk-into-profit?hsLang=en) ## You May Also Like These Related Stories [Helping banks turn risky buildings into profitable loans](https://netto.eco/en/the-library/turning-risk-into-profit?hsLang=en) ![](https://netto.eco/hubfs/Netto%20social%20share%20(9).png) [Net zero](https://netto.eco/en/the-library/tag/net-zero) ### Helping banks turn risky buildings into profitable loans [How Norwegian banks and insurers are tackling climate risk head-on](https://netto.eco/en/the-library/how-norwegian-banks-and-insurers-are-tackling-climate-risk-head-on?hsLang=en) ![Houses on a mountainside sit near a stream of water](https://netto.eco/hubfs/mariola-grobelska-PqQypj7HJ6A-unsplash.jpg) ### How Norwegian banks and insurers are tackling climate risk head-on [Science-based targets for banks](https://netto.eco/en/the-library/science-based-targets-for-banks?hsLang=en) ![](https://netto.eco/hubfs/callum-stewart-loTNrJY7TP0-unsplash%20(1).jpg) [Net zero](https://netto.eco/en/the-library/tag/net-zero) ### Science-based targets for banks ![Green loans with Netto](https://netto.eco/hubfs/logo.2d07450a.svg) Founded in Norway. 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All rights reserved.    ![ISO logo](https://netto.eco/hs-fs/hubfs/ISO%20logo.png?width=71&height=71&name=ISO%20logo.png)  ![soc2](https://netto.eco/hs-fs/hubfs/soc2.png?width=71&height=71&name=soc2.png)  ![EMEA\_EU\_DORA](https://netto.eco/hs-fs/hubfs/EMEA_EU_DORA.png?width=71&height=71&name=EMEA_EU_DORA.png)  ![gdpr](https://netto.eco/hs-fs/hubfs/gdpr.png?width=71&height=71&name=gdpr.png) Org.nr: 931 960 024   ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Erlend Bolle", "url" : "https://netto.eco/en/the-library/author/erlend-bolle" }, "dateModified" : "2025-05-21T11:39:49.371Z", "datePublished" : "2025-05-21T11:24:54.000Z", "headline" : "Why you should follow Norges Bank’s lead on managing risk in commercial real estate portfolios", "image" : [ "https://netto.eco/hubfs/taylor-friehl-SNO1N_2_7_I-unsplash.jpg" ], "mainEntityOfPage" : { "@id" : "https://netto.eco/en/the-library/norges-bank-and-transition-risk", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://netto.eco/hubfs/Netto%20logo%20(1).png" }, "name" : "Netto AS" } } ```