Let’s be honest: the real estate industry could use a serious makeover in the energy management category. Luckily, the Carbon Risk Real Estate Monitor (CRREM) is here to save the day. It’s like the personal trainer for real estate, whipping inefficient buildings into shape with energy-saving retrofits and renovations. The European Union (EU), as usual, is setting the pace with tools like CRREM, pushing real estate closer to net-zero emissions by 2050, as outlined in the Paris Agreement.

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What is CRREM?

CRREM is basically your building’s lifeline to avoid becoming a carbon-emitting dinosaur. It is a research project and tool designed for the real estate sector, primarily in the EU, that offers science-based decarbonisation pathways for residential and commercial assets to manage transition risks better. 

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CRREM was designed to prevent existing real estate assets, especially those who still think flip phones are cool, from getting ‘stranded’ – a situation where assets are no longer compliant with evolving environmental standards, making them obsolete. Real estate assets risk not meeting future energy efficiency standards without necessary interventions for efficient energy management. 

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The premise of CRREM is to give real estate sector stakeholders the tools to tackle climate risks head-on and ensure that properties are on the right track to net zero. The focus? Retrofits that actually make a difference. 

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CRREM isn’t some new kid on the block – the project has been around since 2018 and was funded by the EU’s Horizon 2020 Research and Innovation Programme until 2021. Today, it’s supported by the Laudes Foundation. The CRREM Consortium members include TIAS School for Business and Society, Ulster University, University of Alicante, GRESB, and the Institute for Real Estate Economics. 

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The purpose of CRREM

Think of CRREM as your building’s roadmap to staying relevant in a world pushing for carbon reduction like never before. Its main goal? Help real estate companies and investors understand the climate risks lurking around the corner and develop strategies to reduce their carbon footprint. Plus, it offers transparent pathways for decarbonising current assets to align them with the Paris Agreement goal of keeping global temperature rise well under 2°C.

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The framework exposes climate-related risks and enables stakeholders to develop potential strategies to mitigate those risks, primarily through energy benchmarking and target setting. It complies with initiatives like the Task Force on Climate-related Financial Disclosures and EU Taxonomy. 

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CRREM also helps highlight the massive carbon footprint the property sector leaves behind – spoiler alert: it’s 38% of Europe’s energy consumption. The European Commission estimates that with retrofits and renovations, buildings' energy consumption can be reduced by 46% by 2030. Let’s give old buildings a chance to catch up, shall we?

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Energy management with CRREM

All right, let’s break it down: energy management refers to systematic actions to monitor, control and optimise energy consumption to increase efficiency, reduce costs, and mitigate emissions. In other words, watching your usage like a hawk, cutting down on waste, and ensuring your bills (and emissions) don’t give you a heart attack. It’s a core component of the CRREM framework, designed to help the real estate sector get a clear picture of the energy usage of its assets, set targets, and take steps to reduce consumption. 

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Here’s how CRREM works its magic: 

Energy efficiency: Get your house in shape

Retrofits, renovations, and upgrades – CRREM’s pathways focus on getting buildings to level up by slashing energy consumption. Whether it’s upgrading your insulation or getting the latest energy-efficient HVAC, CRREM’s got the game plan. 

• Building retrofits: Think of it as a building facelift - improved insulation, LED lighting, and high-efficiency HVAC systems that actually do their jobs.
• Equipment optimisation: Your gear deserves some love too. Regular maintenance and upgrades keep things running like a dream
• Behavioural changes: Give your tenants a crash course in energy-saving 101. Education and awareness can do wonders (and save you money)

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Renewable energy: The eco-friendly flex

Clean energy is the new cool kid on the block. Whether you’re generating it on-site or buying it from an off-site source, using renewable energy is a no-brainer to reduce Scope 2 emissions.

• On-site generation: Install solar panels, wind turbines, or other renewable energy systems to generate clean electricity
• Virtual power purchase agreements (VPAs): Contract renewable energy from off-site sources to offset energy consumption

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Energy management systems: Smart buildings, smart choices

What’s cooler than managing your energy with cutting-edge tech? Nothing. CRREM encourages investing in systems that make energy management easier than ever. 

• Smart meters: Provides real-time monitoring to get those insights fast and fix energy hogs even faster
• Building automation systems: Let your building run like clockwork – control HVAC, lighting, and other systems based on who’s actually in the building and the weather conditions

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Target setting: Aim high, achieve more

CRREM doesn’t just throw you out to the wolves and tell you to figure it out. It provides a framework and tool for real estate stakeholders to set carbon emission targets for their properties. And not just any old targets – CRREM partners with the Science-Based Targets Initiative (SBTi), which ensures that the assumptions, data, and methodologies are grounded in scientific research and verified by experts. 

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SBTi publishes sector-specific guidelines to set science-based targets. It has published guidelines for the building sector, which include similar targets as CRREM to tap into retrofits and refurbishments of energy infrastructure in existing buildings. However, the SBTi building sector guidelines are more overarching, with provisions for new constructions. 

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Much like the SBTi’s guidelines, the CRREM’s methodologies for target setting are also aligned with the Paris Agreement, taking into account both 2-degree and 1.5-degree scenarios. Another notable aspect of CRREM’s target-setting is that it has taken a downscaling approach, beginning with global current emissions and stipulated goals and then reducing them to country-specific emissions. 

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The CRREM pathways only consider ‘in use’ emissions within their risk analysis and target setting. They do not consider the embodied emissions of existing buildings. 

Energy benchmarking: Set, compare, conquer

Let’s talk benchmarking – because if you’re not comparing your energy use to industry standards, how do you know if you’re winning or losing? With CRREM’s pathways, real estate stakeholders can set energy benchmarks for individual assets and portfolios. These benchmarks automatically align with the 2-degree and 1.5-degree decarbonisation pathways and are specific to 44 countries, representing the lion’s share in the global real estate sector. 

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CRREM benchmarking also takes into account the property type and has guidelines available for the following property types: Office, Retail High Street, Retail Shopping Center, Retail Warehouse, Hotel, Industrial Distribution Warehouse, Healthcare, Lodges/Leisure & Recreation, Medical Office, Residential Multi-family (RMF), and Residential Single-Family (RSF).

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Benchmarking allows for tracking energy performance over time, enabling companies to measure the effectiveness of their energy-saving initiatives and identify trends. Here’s a general process of benchmarking the energy consumption of real estate assets with CRREM:

• Data collection: Gather real estate asset or portfolio energy consumption data
• Normalisation: Adjust data for building size, floor size, occupancy, and climate factors
• Benchmarking: Compare normalized energy consumption data to industry averages and best practices
• Analysis: Identify areas for improvement and potential energy-saving opportunities
• Reporting: Generate reports and visualizations to communicate benchmarking results to stakeholders

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Carbon management: Time to get real

Effective energy management, which CRREM promotes, is just part of the bigger picture – carbon management. The real estate sector is under pressure to reduce emissions (and for good reason). Consumers, investors, developers, and other stakeholders are picking sustainability over everything else, so if your building’s still stuck in the dark ages, good luck attracting tenants or investors. 

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Simply put, players in the real estate sector who own or manage assets need to reduce their operating emissions. And it’s not just about doing good; government regulations, like the EU’s Corporate Sustainability Reporting Directive (CSRD), mean you’re going to have to spill the beans on your carbon emissions anyway. Might as well get ahead of the curve, right? 

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The need for data accuracy: Get it right, or go home

You can have the fanciest framework in the world, but without accurate data, it’s as useless as a chocolate teapot. For CRREM to work, you need precise energy consumption data and emission factors. Energy data from existing buildings must represent the actual consumption and associated carbon emissions. That means selecting relevant emission factors for the calculation of emissions. As there’s a lack of standardisation, it’s crucial to determine the right emission factors. Otherwise, even though energy data is accurate, the actual emissions may not be. 

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Since CRREM targets existing assets, owners or investors may face data collection and accuracy challenges. Energy data can be scattered in specific markets, resulting in poorer quality. Any challenges with accurate data collection must be addressed before using the CRREM framework, or any other, to set targets and benchmarks. 

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This is where comundo’s solution steps in, which was designed to address the challenges of data accuracy in energy management. Its proprietary software integrates with utility companies to automate data collection and calculate the associated emissions using the most relevant emission factors (based on location, time, season, etc.). In line with EU regulations and SBTi guidelines, comundo is well-positioned to work harmoniously with CRREM and enable the real estate sector to better identify transition risks and prevent their holdings from stranding. 

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Embrace the tools for a greener future!

With CRREM, energy management is no longer a mystery. It’s your secret weapon for keeping buildings energy-efficient and on the right side of environmental regulations. Real estate firms with over €450 billion worth of assets have already applied the CRREM framework for benchmark analysis, target setting, and aligning with the Paris Agreement. So, what’s stopping you? 

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FAQs

What is the main objective of energy management?

The primary objective of energy management is to reduce energy consumption and costs while minimising environmental impact. By implementing energy-efficient practices and utilizing renewable energy sources, organisations can achieve significant savings, reduce their carbon footprint, and contribute to a more sustainable future.

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What are the three parts of energy management?

Energy management has three parts: production, transmission, and use. Sustainable energy management calls for reducing the environmental impact of all three parts. The only part that end consumers can control is consumption, where they can reduce consumption by opting for energy-efficient solutions and following best practices. 

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How can accurate data improve carbon management and benchmarking?

Accurate data is crucial for effective carbon management and benchmarking, as it provides a solid foundation for measuring energy consumption, identifying areas for improvement, and tracking progress toward sustainability goals. With reliable data, stakeholders can make informed decisions, set realistic targets, and accurately assess the impact of their energy management initiatives.

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