Chapter 9

Question 1

What vision is there for net zero in the real estate sector?

Answer 1

World Green Building Council’s “Advancing Net Zero” sets out vision for total decarbonisation by 2050 (whole life emissions).

Useful benchmark for energy efficiency is CCREM.

Question 2

Which benchmark is most commonly used to assess operational energy use?

Answer 2

Global Real Estate Sustainability Benchmark (GRESB) has driven standardisation

The Carbon Risk Real Estate Monitor ;CCREM can then be used to assess financial transition risk. Tool provides 1.5C and 2C pathways for real estate on an asset intensity level. Also shows risk of stranding

Question 3

How to measure embodied carbon?

Answer 3

Currently no globally consistent standard

PCAF European Building Emissions Factor Database can helo

Question 4

The IFC (world bank) produced what to support emerging market real estate efficiency investments?

Answer 4

The Design for Greater Efficiencies green building certification.

Question 5

What inputs are required to assess a real estate asset’s physical risk exposure?

Answer 5

1. Address
2. Asset type
3. Value
4. Reinstatement value

Question 6

GRESB benchmarks what characteristics?

Answer 6

1. Climate change risk strategy and policy
2. Energy and carbon performance
3. Energy and carbon targets
4. Performance achieved on new developments and major refurbishments
5. Green building certifications and energy performance certificates

GRESB participants can also then assess against CRREM pathways in EU and UK

Question 7

Real estate was identified as crucial for?

Answer 7

The EU Taxonomy

DNSH criteria is challenging to demonstrate given data issues

Question 8

SFDR has which DNSH criteria for real estate?

Answer 8

1. Fossil fuels: exposure to fossil fuels through real estate (involves involved in extraction, storage, transport, or manufacture)
2. Energy efficiency: exposure to energy inefficient real estate assets

Question 9

How can green bond issuers proceed in real estate?

Answer 9

CBI has criteria under CBS for certification (which applies Climate Bonds Taxonomy - now in line with EU taxonomy). Ineligibility from:
1. Not meeting certification standards
2. Properties with EPC of B or below
3. Airport terminal buildings

Question 10

Which REITs are particularly exposed to physical risks?

Answer 10

US east coast and California
China
Singapore

Question 11

Which reports have been influential on the value of NbS and the systemic changes needed?

Answer 11

1. WWF’s Climate, Nature, and our 1.5C future
2. IPCC and Intergovernmental… Platform on Biodiversiry and Ecosystem services reports

Question 12

How does ClimateWise’s transition risk framework suggest assessing transition risks?

Answer 12

1. Portfolio risk and opportunity exposure
2. Asset impact identification
3. Financial modelling analysis

Provides guidance on how transition risks can impact infra assets, e.g. gas network utilisation rates and carbon pricing

Question 13

What does it mean to take a managed adaptive approach?

Answer 13

Designing infrastructure for efficient upgrading in the future in case of greater need to adapt

Question 14

Grey versus blue versus green infrastructure?

Answer 14

Grey is human engineered
Blue and green bring in additional natural capital to provide complementary ecosystem services (integrated grey and NbS)

Question 15

Which benchmarking tool is available with good coverage for infrastructure?

Answer 15

GRESB Infrastructure - benchmarks infra funds and infra assets.

Question 16

Are Sustainability-linked debt instruments commonplace in infrastructure?

Answer 16

Not yet and margin ratchet not yet notable

Standardisation and comparability remains a challenge