CRREM | Carbon Risk Real Estate Monitor

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Carbon accounting and reporting

Embodied carbon

Investor/Tenant/Occupancy

BUILDINGS and

CLIMATE PROTECTION

Strategic options(Sell, Hold, Retrofit –

Timing)

More than saving energyCarbon pricing

Change of emissions factors, heating/cooling load, prices

Scope1,2,3

Regulated vs. unregulated emissions

Liability

GHG savings

Carbon budgetdownscaling

Profitability/Anyway-costs

Predictability/Reliability of regulation

ENERGY AND CARBON

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

DOWNSIDE RISKS OF CLIMATE CHANGE

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Project title: CRREM: Carbon Risk Real Estate Monitor - Framework for science based decarbonisation pathways, toolkit to identify stranded assets and push sustainable investments

Duration: February 2018 – January 2021

Funding: EU H2020 framework programme

General objectives:

• Downscaling & transparency: Breaking down global GHG emissions budget by sector, company and property level for more transparency and capacity building

• Strategic implication of “Stranded assets”: Defining areas for improvement and strategic options

• Framework, toolkits & methods: Making decarbonisation in the commercial real estate sector measurable

PROJECT SUMMARY

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Partnership:

IIÖ Institut für Immobilienökonomie Coordinator | Austria

University of Ulster| UK

GRESB

University of Alicante | Spain

TiasNimbas Business SchoolTilburg University | Netherlands

CRREM PROJECT CONSORTIUM

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

European Investor Committee: Industry bodies and academics

EUROPEAN INVESTOR COMMITTEE

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

European Investor Committee: Institutional investors & corporate partners

EUROPEAN INVESTOR COMMITTEE

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Source: CRREM

Concept ‚Stranded Asset‘

Key indicator: GHG intensity of building (Emissions per floor area [kgCO2e/m²/a])

Country and sector-specific target path

Consideration of effects of changing heating and cooling loads and electric grid decarbonisation

Stranding assets do not meet decarbonisation targets and face potential write-downs

STRANDED ASSETS

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Concept ‚Stranded Asset‘

Key indicator: GHG intensity of building (Emissions per floor area [kgCO2e/m²/a])

Country and sector-specific target path

Consideration of effects of changing heating and cooling loads and electric grid decarbonisation

Stranding assets do not meet decarbonisation targets and face potential write-downs

Sour

ce: S

pino

ni e

t al.

(201

8), o

wn

calc

ulat

ion

and

pres

enta

tion.

STRANDED ASSETS

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Source: GHG Protocol, 2013.

Carbon Accounting and reporting

CRREM alignment to GHG Protocol:Standards for assessment, accounting and reporting of GHG emissions (World Resources Institute WRI & World Business Council for Sustainable Development WBCSD)

Accounting: Engery consumption (fuels, electricity), conversion to GHG with emissions factors. Challenge: lack of tenant data (esp. electricity consumption)Reporting: Emission scopes 1, 2, 3S1: Direct emissions from burning fuels or leakagesS2: Indirect emissions from energy consumptionS3: Indirect emissions from upstream and downstream processes

CARBON ACCOUNTING AND REPORTING

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

CRREM tool

Database: GHG reduction targets, emission factors, weather normalisation, energy prices, carbon price, HDD/CDD, abatement costs, grid decarbonisation…

User input:Property characteristics: Location, year of construction, energetic characteristics, occupancy, energy consumptionUser assumptions: Discounting, carbon price, energy prices, abatement costs, own…

Result: ‚Stranding Diagramm‘, Stranding Risk, costs of retrofits necessary to meet targets, carbon costs…

Source: CRREM

CRREM TOOL

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Source: CRREM

CRREM TOOL

CRREM Tool: 1) Asset level input

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Source: CRREM

CRREM TOOL

CRREM Tool: 2) Results – Carbon performance and targets on asset and portfolio level

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Source: CRREM

CRREM TOOL

CRREM Tool: 2) Results - Define scenarios and evaluate their impact

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Source: CRREM

CRREM TOOL

CRREM Tool: 2) Results - Compare your assets

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Source: CRREM

CRREM TOOL

CRREM Tool: 2) Results - Portfolio overview

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Source: CRREM

CRREM TOOL

CRREM Tool: 2) Results - Portfolio overview

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%20

1920

2020

2120

2220

2320

2420

2520

2620

2720

2820

2920

3020

3120

3220

3320

3420

3520

3620

3720

3820

3920

4020

4120

4220

4320

4420

4520

4620

4720

4820

4920

50

Share of stranded assets

Not strandedStranded

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Source: CRREM

CRREM TOOL

CRREM Tool: 3) Mitigation measures

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

GHG cum [kgCO2e]

Year2050Retrofit

Embodiedcarbon

No Retrofit

Ecologicalbreakeven

point

Retrofitcosts

No Retrofit

Economicbreakeven

point

Energy costscum [€]

Cum

ulat

ive

GH

G e

mis

sion

s in

kgCO

2e

Cum

ulat

ive

cost

s in

€

2018

Assessment of energetic retrofit measures

Economical: Annual energy cost savings vs. Investment costs: Assessment of net present value of energetic retrofit measure

Ecological: Annual GHG emission savings vs. embodied carbon Supplementing the economic break-even point with an ecological oneEmbodied carbon of retrofit measures is not included in corporate reporting so far

ECONOMIC BREAK-EVEN

Source: CRREM

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Source: Own calculations; IEA, 2017; Rockström et al.; 2017; UN DESA, 2017; PBL, 2018

Derivation of country and sector-specific GHG reduction targets

Global GHG budget and emissions pathway (consistent with a certain amount of global warming)

EU emission pathway (convergence of per capita emissions until 2050)

EU commercial real estate (CRE) sector

Country-specific targets (convergence of GHG intensity)

Sector-specific targets for each country: Intrinsic differences of GHG intensity in CRE subsectors (office, retail etc.)

DOWNSCALING OF GHG-TARGETS

Interim downscaling step: EU emission pathway

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Derivation of country and sector-specific GHG reduction targets

Global GHG budget and emissions pathway (consistent with a certain amount of global warming)

EU emission pathway (convergence of per capita emissions until 2050)

EU commercial real estate (CRE) sector

Country-specific targets (convergence of GHG intensity)

Sector-specific targets for each country: Intrinsic differences of GHG intensity in CRE subsectors (office, retail etc.)

Source: Own calculations; IEA, 2017; Rockström et al.; 2017; UN DESA, 2017; PBL, 2018

DOWNSCALING OF GHG-TARGETS

GH

G in

tens

ity [k

gCO

2e/m

²/a]

GH

G in

tens

ity [k

gCO

2e/m

²/a]

Interim downscaling step: Country-specific GHG intensity targets (1.5°C target)

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

Derivation of country and sector-specific GHG reduction targets

Global GHG budget and emissions pathway (consistent with a certain amount of global warming)

EU emission pathway (convergence of per capita emissions until 2050)

EU commercial real estate (CRE) sector

Country-specific targets (convergence of GHG intensity)

Sector-specific targets for each country: Intrinsic differences of GHG intensity in CRE subsectors (office, retail etc.)

Sector-specific GHG intensity targets: Germany (1.5°C target)

DOWNSCALING OF GHG-TARGETS

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© CRREM 2019

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Summary PresentationThis project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058

ESD – ‚Effort Sharing Desicion‘

Objective: Compliance with EU-INDCNon-ETS sectors: Agriculture, Buildings, Transport, (non-ETS)Industry, Waste

Only direct emissions (= Scope 1): Derivation of Scope 2 reduction targets from ETS-targets

EU-wide GHG reduction targets:• -10% until 2020 vs. 2005• -30% until 2030 vs. 2005

Country-specific GHG reduction targets (GDP capacity to investment in abatement measures)CRREM: GHG intensity targets on property level based on ESD-targets

EFFORT SHARING DECISION

EU and country level ESD GHG emission reduction targets

Source: European commission; own presentation

785058 — CREEM — H2020-EE-2016-2017/H2020-EE-2017-CSA-PPI

24. Sitzung des DGNB Immobilienbeirats

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Date: 10th October 2018

CRREM | CARBON RISK REAL ESTATE MONITOR

STRANDING RISKS & CARBON

Science-based decarbonising of the EU commercial real estate sector

Study:

PUBLIC REPORT

785058 — CREEM — H2020-EE-2016-2017/H2020-EE-2017-CSA-PPI

24. Sitzung des DGNB Immobilienbeirats

Page 25

Date: 10th October 2018

CRREM | CARBON RISK REAL ESTATE MONITOR

CRREM Project homepage: www.crrem.eu

PROJECT HOMEPAGE

Institut für Immobilienökonomie GmbHJosef-Steinbacher-Straße 1

A - 6300 WörglThis project has received funding from the

European Union’s Horizon 2020 research and innovation programme

under grant agreement no. 785058

Dr. Jens Hirsch

jens.hirsch@iioe.at

+43 (5332) 239 26

Institut für Immobilienökonomie

Josef-Steinbacher-Strasse 1

A-6300 WörglContact: