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Turley welcomes publication of CRREM & SBTi aligned Decarbonisation Pathways

Last week the Carbon Risk Real Estate Monitor initiative (CRREM) announced the public release of the updated decarbonisation pathways for the real estate sector, for reducing the operational carbon emissions of buildings to limit global warming to 1.5°C. This is hugely welcomed by our Sustainability team; Director, Snigdha Jain explains why and summarises the changes.

This is the first time that the Carbon Risk Real Estate Monitor initiative (CRREM) has come together with the Science Based Targets initiative (SBTi) to produce a globally consistent standard for the operational decarbonisation of real estate holdings which investors and other market participants can rely on. The revised set of pathways came into effect on the 11 of January 2023.

The drivers behind the update give definite cause for celebration (decarbonisation of the electricity grid on average gained traction with emission factors for electricity going down significantly) and some disappointment (all sectors globally are lagging behind decarbonisation targets).

Whilst the update does bring about some changes in approach, it intrinsically remains aligned to CRREM’s strengths and maintains its sharp focus on:

• the operational (in-use) stage of a building, comprising direct emissions from burning fuel such as gas on-site and indirect emissions related to the use of electricity;
• the intrinsic environmental quality of a building, which remains unchanged by the procurement of renewable electricity; and
• a whole building approach, including both landlord and tenant-controlled spaces; thereby, rendering the delineation between Scopes 1, 2 and 3 irrelevant for its purposes. 

The changes it does bring about include: 

• an explicit separation of the decarbonisation pathways from greenhouse gases other than carbon dioxide (CO2). This recognises the contribution of the building sector for almost a third of all global Fluorinated-gas (F-gas) emissions, which although released in small volumes have a global warming potential up to 26,000 times greater than CO2;
• consistency with the application of emission factors for electricity with SBTi, thereby excluding transmission and distribution losses as well as trade effects; 
• changes to the CRREM energy reduction pathways to be purely reflective of energy consumption^[1] to mitigate widespread misinterpretation and subsequent stakeholder feedback where the targets were deemed unachievable. This approach also rewards highly efficient buildings and aims to stimulate deep retrofits; and
• introduction of a new pathway for ‘Industrial Distribution Warehouse Cooled’ as well as sub-regional pathways for the USA and Australia, in response to feedback. 

Overall, the changes are very welcome and businesses seeking to align with SBTi at an organisational level, and CRREM at a real estate asset level, are now guaranteed an alignment in the underlying approach. The CRREM decarbonisation pathways are invaluable to further the understanding and management of long-term climate-related transition risks in the real estate sector. 

We will be discussing this and more with Dr. Sven Bienert, Head of the CRREM initiative, as part of our Turley ESG Bites Podcast later this month. Watch this space and click here to catch up on previous episodes. 

For a discussion on how we can assist in the decarbonisation of your real estate assets aligned with Net Zero Carbon targets at an organisational level, please get in touch with Snigdha Jain. We have extensive experience of implementing Net Zero Carbon frameworks allowing organisations to demonstrate climate leadership and future proof investments. 

17 January 2023

[1] Consumption based on energy bills + any energy produced and consumed on-site (e.g. from on-site renewables like PVs)