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Energy and ESG

CRREM and stranded assets

Decarbonisation pathways investors use to assess when a building misses climate targets.

The Carbon Risk Real Estate Monitor sets target values for energy use and emissions to 2050 by country and property type. If a building is above the pathway, it risks becoming a stranded asset: harder to let, harder to finance and sold at a discount. The point at which it crosses the pathway is called the stranding year.

Application

Investors compare measured energy use and emissions per square metre with the CRREM pathway for logistics in the respective country. This results in action plans, such as PV, heat pumps, LED or insulation, and a capex budget up to the target year.

Limits

Results depend heavily on data quality, tenant behaviour and how PV power is accounted for. For buildings with a high share of process power, for example from refrigeration or automation, the pathways are only partly comparable.

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