CRREM update: from “stranding year” to “misalignment year”

A smarter way to talk about transition risk

The CRREM Foundation has announced a significant shift in terminology: the commonly used “Stranding Year” will now be referred to as the “CRREM Misalignment Year”.
While the underlying methodology remains unchanged, this rebranding brings greater clarity and avoids misconceptions around what CRREM data really tells us.

Why the change?

The term “Stranding Year” unintentionally implied that crossing the CRREM decarbonization threshold would automatically lead to financial impairment — something the tool was never designed to predict. In reality, CRREM is a science-based model that shows when a building’s carbon or energy intensity becomes misaligned with the 1.5°C target, not when its value is lost.

“We more accurately communicate what our tool measures: misalignment with climate targets, not a definitive loss of asset value.”
– Andrea Palmer, CEO, CRREM Foundation

Remember: being misaligned with climate targets doesn’t mean the asset is stranded. Stranding is determined by market factors — investor sentiment, regulation, lease structures, tenant demand, capex needs, and more.

CRREM’s goal is not to predict the future — it’s to provide an early warning signal to support better transition risk management.

Key takeaways for real estate professionals, investors and ESG leaders:

• The CRREM Misalignment Year = first year your asset exceeds the 1.5°C pathway
• It highlights potential risk, not a guaranteed loss
• Use it alongside contextual analysis: local policy, market trends, tenant profiles, etc.
• It’s a tool for engagement, planning, and informed decision-making

This evolution in terminology will help the industry have more mature, nuanced conversations about climate alignment, resilience, and investment strategy.

A positive step toward making transition risk more actionable and decision-useful for stakeholders across the real estate value chain.