CRREM Retrofit Harmonisation Roadmap. A Guide to Policy Formulation in the European Commercial Real Estate Industry. CRREM Report on Completion of Pilot Testing Phase

M Haran, PT Davis, Michael McCord, Daniel Lo, Jens Hirsch, Julia Wein, Sven Bienert, Maximilian Spanner, Peter Geiger, Juan José Lafuente, Erik Landry, Rik Recourt, Paloma Taltavull, Raul Perez, Francisco Juárez, Ana Maria Martinez, Dirk Brounen

Research output: Book/ReportCommissioned report

Abstract

The Carbon Risk Real Estate Monitor (CRREM) project has developed a science-based downscaling methodology to derive decarbonisation pathways that are consistent with the goals of the Paris Climate Agreement. These pathways have been derived at the level of specific building types in individual countries (for further details please see www.crrem.org/pathways and https://www.crrem.eu/publications/reports). In order to make this information immediately actionable by real estate portfolio managers and institutional investors, CRREM has constructed a freely available and easy-to-use tool (to directly download the tool please visit www.crrem.eu/tool. The CRREM Risk Assessment Tool offers the possibility for its users to evaluate the progress of a commercial real estate portfolio’s carbon reduction performance against decarbonisation targets in line with the Paris Agreement (i.e., limiting global warming to 2°C or 1.5°C or individual target setting). The CRREM tool helps to identify which properties will be at risk of stranding due to the expected increase in stringent building codes, regulation, shifting market expectations and increasing carbon prices. It also enables an analysis of the effects of refurbishing single properties on the total carbon performance of a company, including by assessing emissions related to embodied carbon.
The heterogenous group of participants of the pilot test phase represented wide variety of the most relevant stakeholders in the tool’s audience. This included institutional investors and asset owners; fund managers, REITs, and property companies, asset operators, certification bodies, relevant industry bodies, and academia. To date investors and asset managers responsible for more than 3,112 Bio. Euro Assets under Management made use of the tool. The major conclusions of the pilot testing include:

❖ The tool clearly provides an added value for the industry, for example enabling a transparent analysis of carbon risks, calculation of abatement costs and evaluating the correct timing of future retrofit measures.
❖ The tool provides the perfect opportunity to start a very important dialogue between investors and fund managers about the carbon performance of their assets and possible ways to reduce the carbon footprint.
❖ The tool is useful for setting science-based, Paris-aligned targets for individual commercial real estate properties with regards to the carbon intensity of their assets.
❖ The tool provides a useful mechanism for the assessment of carbon related transition risks at both the asset and portfolio level, as well as planning retrofit actions that would be required to mitigate those risks.
❖ The tool can help asset managers report carbon risks in line with other major reporting initiatives, including the TCFD and the EU Taxonomy on Sustainable Finance.

Due to the high level of interest garnered over the course of the CRREM project and the utility of the tool for commercial real estate in the European Union, the CRREM project has received follow-on funding from several investment partners to expand its scope. Decarbonisation pathways are now developed not only for the commercial building sector in the European Union, but also for all major developed real estate markets globally as well as for residential buildings. These developments promise to make the tool an important resource for a still wider group of stakeholders. CRREM and GRESB, the ESG benchmark for real assets, have partnered to make the CRREM tool even more accessible to its expansive network of commercial real estate portfolios. By integrating the CRREM tool into the GRESB Portal, GRESB members will have more information on the Paris alignment, performance, and transition risks of their assets than ever before.
Original languageEnglish
Number of pages50
Publication statusPublished - 18 May 2020

Keywords

  • real estate
  • Commercial real estate
  • Decarbonisation
  • Retrofit
  • Abatement
  • Climate change
  • European Union
  • Carbon risk
  • Corporate strategy

Fingerprint Dive into the research topics of 'CRREM Retrofit Harmonisation Roadmap. A Guide to Policy Formulation in the European Commercial Real Estate Industry. CRREM Report on Completion of Pilot Testing Phase'. Together they form a unique fingerprint.

Cite this