“Ensuring a resilient and thriving Real Estate sector under new climatic conditions”
CRREM will accelerate the decarbonization and climate change resilience of the EU commercial real estate sector by clearly communicating the downside financial risks associated with poor energy performance and the quantification of financial implications of climate change on the building stock. Therefore, CRREM will provide the industry with appropriate science-based carbon reduction pathways at building, portfolio and company level and with financial risk assessment tools to cost-effectively manage carbon mitigation strategies. The project aims at optimizing industry’s investments in energy efficient retrofits by making risks more transparent and by unveiling opportunities for property owners and investors. CRREM will provide the industry with a tool to assess ‘stranding’ risks, applicable GHG-reduction pathways according to the Science-Based Targets Initiative, and reporting templates, which will contribute to accelerating the decarbonization of the EU building stock to “2-degree-readiness”.
“Providing the tools to identify the buildings most at risk and prepare them for adaptation”
The downscaling of EU’s carbon reduction commitments to the Paris Agreement to the sector and building level will contribute to the reduction of carbon emission and an increase of investment in sustainable retrofits. Users of the CRREM tool will be able to monitor the energy performance of single properties as well as of portfolios and whole companies, benchmark their performance and assess their ‘stranding risk’ due to regulatory changes, potential shifts in energy costs and refurbishment measures. The CRREM toolkit will further allow for a straightforward graphical assessment of ‘stranding risks’ of single properties and whole portfolios (see figures).
The overall objective of the Carbon Risk Real Estate Monitor Project (in short CRREM) is to contribute to an increase of energy efficiency investments in the real estate sector by addressing the need to understand the down-side-risk of climate change. Hence, we focus on decarbonisation requirements of the assets under management compared to the overall sector targets and INDCs.
Additionally, CRREM seeks to accelerate the decarbonisation of the real estate sector by enabling investors to set science-based carbon targets and reduction pathways and with monitoring tools that are necessary to manage efficiency measures effectively. CRREM addresses the following sub-objectives in order to fulfil the overall goal:
- Objective 1 – Downscaling & transparency: Breaking down INDCs by sector, company and property level for more transparency and capacity building
- Objective 2 – Strategic implication of “Stranded assets”: Defining areas for improvement and strategic options
- Objective 3 – Framework, Toolkits & Methods: Making decarbonisation in the commercial real estate sector measurable
“Stranded assets“ are properties that will not meet future energy efficiency standards and market expectations and might be increasingly exposed to the risk of early economic obsolescence.