Property owners and investors, ever more mindful of growing climate risks, are increasingly looking for ways to measure and reduce their assets’ energy consumption and emissions while calling for greater real estate industry collaboration.
One initiative gaining particularly strong momentum is the Carbon Risk Real Estate Monitor (CRREM), a transition risk measurement tool that provides decarbonization pathways for different property types and geographies. The CRREM is both sector-specific and maintains high levels of data granularity. It is an EU-based, open-source initiative with the objective of decarbonizing the EU real estate sector, and focuses on the financial risks associated with climate negligence. The tool is meant to assess stranding risk, and report the financial implications and losses that arise from poor energy performance.
Read also: The growing risk of stranded assets
The CRREM provides the real estate industry with transparent, science-based decarbonization pathways aligned with the Paris Climate Goal of limiting global temperature rise to 2°C, with ambition towards 1.5°C. Pathways for both scenarios can be applied alternatively.
The data input for the tool has been aligned with the GRESB asset-level performance data, other input variables for the software are also largely based on existing frameworks, such as the EPRA sBPR, GRI, and the GHG Protocol Corporate Standard. The output figures produced by the CRREM tool are intended to facilitate reporting in accordance with the Task Force on Climate-Related Financial Disclosure (TCFD), the GRI, as well as other recommendations.
The CRREM and SBTi: a powerful partnership
The CRREM, which has seen its take-up notably accelerate in 2022, has updated and expanded its pathway coverage and looks to further solidify its status as a key standard. A year ago, the CRREM embarked on a partnership with the SBTi to provide the sector with one single set of 1.5°C-aligned in-use emissions pathways. It is a response to the need to offer the building sector more granular pathways reflecting building typology and location. On January 2023, the updated CRREM-SBTi aligned decarbonisation pathways for Real Estate have been published. From now on, SBTi-CRREM-pathways cover the residential and commercial real estate sector across Europe, North America, and Asia-Pacific. A new pathway for “Industrial Distribution Warehouse cooled”, as well as sub-regional pathways for USA – covering the 15 largest cities – and for Australia – covering the 6 climate zones – have been included. The CRREM tool will soon also be updated with the new pathways.
The Science Based Targets initiative (SBTi) is a global body enabling businesses to set ambitious emissions reduction targets in line with the latest climate science. It is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF). The initiative is focused on accelerating companies across the world to halve emissions before 2030 and achieve net-zero emissions before 2050.
As part of its target-setting methods, the SBTi provides emissions reduction pathways for a number of sectors, which companies must use in calculating their science-based targets. Regarding buildings, it has provided global commercial and residential pathways for in-use emissions for several years.
Involvement of Deepki Ready™
Following this partnership, the detailed target-setting guidance published in 2023 will provide companies in this sector the clarity they need to set targets using the new pathways. As official partners, Deepki and the CRREM initiative collaborate to provide the sector with concrete and effective decarbonization action plans. This partnership involves the organizations working back to back: they are actively collaborating and exchanging selected information to improve the CRREM model and Deepki’s platform.
How are the CRREM tool and pathways integrated into the Deepki Ready™ platform? How can you use it to assess your assets? In our freely accessible guide endorsed by the CRREM and based on the first version of the tool – soon to be updated with version two – discover how Deepki’s SaaS platform and expertise can be leveraged in combination with CRREM tools. Check out Deepki’s new downloadable guide below to implement solid and successful carbon trajectories and maximize the value of your assets.