This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
CARBON RISK REAL ESTATE MONITOR
DR. JENS HIRSCH
HEAD OF RESEARCH | IIÖ INSTITUTE FOR REAL ESTATE ECONOMICS
Slide 2
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
CLIMATE RISK
PH
YS
ICA
LR
ISK
TRANSITION RISK
1.5°C - 2°C
>6°C
PHYSICAL RISK + TRANSITION RISK
High risks of physical and social disruption
High risks associated with rapid transition (e.g., energy cost, obsolescence)
Source: TCFD Technical Supplement, 2017
“STRANDED ASSETS are properties that will be exposed to the risk of early
economic obsolescence due to climate change because they will not meet
future regulatory efficiency standards or market expectations.” (CRREM, 2019)
Slide 3
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
SCIENCE | REGULATION | RISK
New mandatory and voluntary requirements to (sustainable) finance & carbon risk
Climate science: Climate impact and carbon emission budgets/pathways compatible with limiting global warming to x.xoC
Politics: Commitment to limit global warming to 2oC or better 1.5
oC
CARBON RISK REAL ESTATE MONITOR
CRREM pathways
• Paris-aligned decarbonisation & energy reduction pathways
• Per country and building type
CRREM Tool
• Assess the carbon and energy performance of buildings and portfolios
• Benchmark against CRREM pathways and peers
• Derive indicators for risk management, reporting, disclosure
Slide 4
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
CRREM PATHWAYS
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)
gggggggggggggggggggggggg
Sector-specific GHG targets for each country
ggggggggggggggggggggggggggggggggggg
Energy reduction pathway
DO
WN
SC
AL
ING
0
20
40
60
80
100
120
140
160
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050
GH
G IN
TEN
SITY
TA
RG
ETS
[kgC
O2e
/m²/
yr)
EU PORTUGAL
GERMANY NETHERLANDS
SPAIN UK
GHG INTENSITY TARGETS CRE
CRREM DOWNSCALING: FROM GLOBAL EMISSIONS TO CARBON INTENSITY PATHWAYS
Slide 5
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
STRANDING RISKS & CARBON
Science-based decarbonising of the EU commercial real estate sector
CRREM REPORT
available onwww.CRREM.eu
available onwww.CRREM.eu
Slide 6
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
CRREM RISK ANALYSIS
Property
Grid Decarbonisation
Climate Change (HDD/CDD)
Stranding
Retrofit€€€
Carbon Price€€€
GHG Intensity [kgCO2e/m²a]
Year2050
Decarbonisation Pathway
CARBON RISK ASSESSMENT & MANAGEMENT BASED ON QUANTITATIVE
PERFORMANCE DATA AND TARGET SETTING
DECARBONISATION PATHWAYS
Aligned with 1.5oC and 2oC global warming, country- and building type specific
Energy consumption, carbon emission factors, grid decarbonsation), changed heating and cooling demand,
normalisation
BUILDING‘S CARBON PERFORMANCE
+
=CARBON RISK ANALYSIS
Year of stranding, excess emissions, carbon costs, energy costs, benchmarking
Slide 7
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
CRREM RISK ANALYSIS
Property
Grid Decarbonisation
Climate Change (HDD/CDD)
Stranding
Retrofit€€€
Carbon Price€€€
GHG Intensity [kgCO2e/m²a]
Year2050
Decarbonisation Pathway
CARBON RISK ASSESSMENT & MANAGEMENT BASED ON QUANTITATIVE
PERFORMANCE DATA AND TARGET SETTING
DECARBONISATION PATHWAYS
Aligned with 1.5oC and 2oC global warming, country- and building type specific
Energy consumption, carbon emission factors, grid decarbonsation), changed heating and cooling demand,
normalisation
BUILDING‘S CARBON PERFORMANCE
+
=CARBON RISK ANALYSIS
Year of stranding, excess emissions, carbon costs, energy costs, benchmarking
CRREM TOOL STRANDING DIAGRAM
Slide 8
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
CRREM TOOL | RISK INDICATORS
Energy targets based on country-specific sector-wide emission factor reflecting
energy mix and evolving grid decarbonisation
Based on energy and carbon price projections (IEA, EU etc.)
Based on (optionally) normalised baseline consumption and projected data considering
changed heating and cooling demand
ENERGY REDUCTION PATHWAYSCOSTS OF ENERGY AND CARBONENERGY CONSUMPTION
QUANTITATIVE CARBON PERFORMANCE AND RISK INDICATORS
Slide 9
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
CRREM TOOL | RISK INDICATORS
Shares based on number of buildings, floor area or asset value.
SHARE OF STRANDED ASSETS OVER TIME COSTS OF EXCESS EMISSIONS ABOVE TARGET
Analoguous to the NY City model with penalties for each ton of emission above emission limit (and possibility of trading emission credits)
QUANTITATIVE CARBON PERFORMANCE AND RISK INDICATORS
Slide 10
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
CRREM RISK ANALYSIS & BENCHMARKING
Visualise your long-term decarbonisation pathway together with individual assets or portfolios performance until 2050
Current and projected future position compared with peers from the annual GRESB assessment
Aligned...
Property types
Input parameters
Slide 11
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
CRREM STATUS QUO / NEXT STEPS
RECENT EXTENSION OF SCOPE THANKS TO FUNDING BY MAJOR GLOBAL INVESTORS:
Slide 12
© CRREM 2019
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 785058
CRREM | CARBON RISK REAL ESTATE MONITORDr. Jens Hirsch| IIÖ Institute for Real Estate Economics
UNEP Property Working Group in-person meeting | Luxembourg City | 27.11.2019
CRREM STATUS QUO / NEXT STEPS
NEXT STEPS:
INTENDEND EXTENSION OF SCOPE:
Pilot Testing with Members of CRREM European Investor Committee
Publication of pathways on www.crrem.eu
Public consultation
Further regional exstension of pathways (with regional initiatives)
Pathways for further property types (e.g. infrastructure)
Extension of CRREM Tool beyond EU commercial real estate
Refinement of CRREM Tool functionality (abatement costs, embodied carbon, online tool...)
...
Institut für Immobilienökonomie GmbH
Josef-Steinbacher-Straße 1
A - 6300 Wörgl
[email protected] | +43 5332 239 26
Institut für Immobilienökonomie | 6300 Wörgl | Austria
DR. JENS HIRSCH
HEAD OF RESEARCH | IIÖ INSTITUTE FOR REAL ESTATE ECONOMICS
CRREM | CARBON RISK REAL ESTATE MONITOR
WWW.CRREM.EU
This project has received funding from the European Union’s Horizon 2020 research and innovation
programme under grant agreement no. 785058
