Sustainable Investment Awards 2022

ESG data initiative of the year: Carbon Risk Real Estate Monitor (CRREM)

Carbon Risk Real Estate Monitor (CRREM) secured the ESG data initiative of the year for its work in developing decarbonisation pathways that allow the energy-intensive real estate industry to set science-based carbon reduction targets.

With the real estate industry estimated to contribute more than a third of all greenhouse gas (GHG) emission globally, judges were impressed the role CRREM is taking in supporting the "vital" understanding of carbon risk within the industry.

Launched in 2019, CRREM published its first public decarbonisation pathways for the real estate sector in May 2020 alongside a free-to-use transition risk management tool. CRREM – developed by the Institute for Real Estate Economics and GRESB – is now used by more than 1,000 institutional investors with trillions of euros of assets under management, including Allianz, CBRE and the Japanese Government Pension Investment Fund (GPIF).

Sven Bienert"The [real estate] industry was missing property-type and country specific [Paris-aligned] trajectories to limit global warming to 2°C or 1.5°C," CRREM head Sven Bienert told Environmental Finance. The CRREM-Tool – which incorporates the CRREM pathways – has created a "global standard for the real estate sector to measure and benchmark asset-level data against Paris-aligned decarbonisation targets," he added.

The tool allows investors to assess their portfolios for Paris-alignment, identify assets with high risk of becoming 'stranded', and analyse the effect of retrofits. This provides real estate investors with an "independent, unique all-in-one solution for strategic planning, benchmarking, management, and facilitating reporting requirements related to the Task Force on Climate-related Financial Disclosures (TCFD) and other initiatives," Bienert said.

In July, CRREM will be updating its pathways using 2020 as the baseline year. The initiative will also work on pathways for additional property-types and regions and continue to encourage use of its pathways in other environmental, social and governance (ESG) tools to support data harmonisation in the real estate sector.