Carbon Risk Real Estate Monitor (CRREM)
A research and innovation project that defines science-based decarbonization targets and pathways for the commercial and residential real estate industry in order to reduce transition risks.
Purpose of the CRREM research and innovation project
The Carbon Risk Real Estate Monitor (CRREM) is a research and innovation project, that defines science-based decarbonization targets and pathways for the commercial and residential real estate industry in order to reduce transition risks.
Targets are consistent with the Paris Climate Agreement’s commitment to limit global warming to 1.5°C or 2°C, broken down per country and property type. CRREM’s methodology uses a global carbon budget as specified by global warming scenarios defined by the Intergovernmental Panel on Climate Change (IPCC).
Research consortium members
GRESB supports CRREM as one of its research consortium members, which include IIÖ Institute for Real Estate Economics, the University of Alicante, Ulster University, and TIAS Business School.
CRREM is funded by the European Commission’s Horizon 2020 Programme. APG, PGGM and a third institutional investor have funded CRREM’s expansion to major real estate markets outside the EU and the residential sector.
CREEM decarbonization pathways
CRREM uses GHG emissions or energy consumption divided by total floor area to determine a portfolio’s intensity-based transition pathway. This details how specific assets need to become more efficient in order to align with certain transition scenarios. Each pathway will extend to 2050 and be comprised of annual estimates of building-related carbon emissions and energy performance – expressed in kWh per m2/ft2 and CO2 per m2/ft2 respectively.
The CRREM decarbonization pathways will be released for public consultation by February 2020 on www.crrem.org. Relevant market participants, including investors, managers, Real Estate Investment Trusts (REITs), green rating systems and other stakeholders, are encouraged to share their views on the decarbonization pathways and help develop a common language for assessing climate transition risk in real estate.
Integration of CRREM methodology in the GRESB Real Estate Assessment
The 2020 GRESB Real Estate Assessment will include an integration with the CRREM methodology to show real estate carbon transition pathways at portfolio and asset level needed to remain within 1.5 and 2.0 degrees of warming.
“Property type-specific transition pathways will be an important addition for assessing the ESG performance of both listed and private real estate investment portfolios. The transition pathways enable GRESB to not only assess ESG performance against industry peers, but also against the commitments made in the Paris Climate Agreement. For the wider real estate investment industry, the pathways will be an important tool to understand and mitigate the long-term systemic risk associated with the retrofit investments required to transition to a low carbon economy.”– Sander Paul van Tongeren, Co-founder and Managing Director, GRESB