CRREM

The Carbon Risk Real Estate Monitor (CRREM) provides a science-based framework for evaluating the transition risks of real estate assets based on their operational (in-use) carbon and energy performance. It aligns with the Paris Agreement climate goals (1.5°C and 2°C) and supports global property investors in identifying, assessing, and managing carbon misalignment risks.

Over the last few years it has become de facto the global standard to align real estate with climate goals and manage transition risk.

What does the industry mean with “CRREM tool”?

It’s a term that real estate asset managers refer to for asset-level and portfolio-level benchmarking against region- and property-specific decarbonisation pathways. The tool tracks both carbon intensity and energy intensity, as it factors in renewable energy, retrofitting and embodied carbon, helping identify properties misaligned with climate targets and allowing integration of GHG emissions, including refrigerants (F-gases).

Misalignment Year (formerly known as “Stranding Year”)

Previously referred to as the “Stranding Year,” the CRREM Misalignment Year is the primary indicator used to assess transition risk. It represents the first year in which a building’s performance exceeds its allocated 1.5°C carbon or energy intensity budget.

It should be noted that CRREM:

• is not a prediction of financial loss or guaranteed stranding;
• helps investors understand when a property begins to deviate from a science-based climate pathway;
• supports early risk detection, guiding strategic decarbonisation decisions.

Misalignment does not automatically mean financial impairment, which depends on market responses, tenant demand, and local regulation.