In this episode of the REIT Report special series “Building to Zero,” Elena Alschuler, Head of Sustainability, Americas, LaSalle Investment Management (LaSalle), shares how the US real estate industry has advanced the discussion on future planning for energy investments and reducing building-related carbon emissions.
Joining this final episode of the REIT Report special series focused on building on the real estate industry's journey to reduce emissions from the built-in environment to zero, is Elena Alschuler, who recently served as the working group chair for the CRREM North America project. She shares her experience in engaging the US real estate community in a deep and thoughtful discussion around the CRREM Framework’s approach and methodology for measuring transition risk to institutional real estate portfolios.
Alschuler shares how “A couple of years ago, a lot of investors were starting to look at these CRREM curves, and we liked the idea of having forward-looking targets to benchmark against in terms of planning energy and carbon performance. But when we started looking at portfolios against this particular set of curves, many of us were getting crazy results. So, twelve [US and Canadian real estate companies], including LaSalle, decided to co-fund a ULI working group, which was supported by the CRREM team in Europe, to do industry engagement and Lawrence Berkely National Laboratory (LBNL) to do the technical work.”
She discusses the project's scope, and how the project team expanded the geographic and property sector coverage and incorporated high-quality data about building energy use and the carbon intensity of the grid where the building is located.
“The idea of having pathways by asset class, grid region, and climate zone is great, so you have a benchmark against which to compare. Not every building will perform exactly on that line, but it gives you a reference point. I think people find that concept potentially useful for informing investment decisions,” says Alschuler.
She goes on to discuss the aspects of the CRREM methodology that were outside the scope of the project and the ongoing efforts in the US to utilize data and guidelines from the US Department of Energy, such as the Zero Emissions Building Definition released in early 2024 and the EPA’s ENERGY STAR programs, including the new NextGen Certification recognizing low-carbon buildings on the path to reducing emissions.
“We're trying to make decisions based on our investment timeline or capital cycle. To do this, we need better forward-looking data, as we have in many other areas of investment, where there's projections and reference points of where market indicators are expected to go. So, if we can get a sense of how an energy-efficient or decarbonized building should perform in 10 years, then we can plan for that.”
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Other podcasts in the Building to Zero series
- CRE Provides Lessons Learned on Building Performance Standard Regulations
- USGBC’s Journey to Support Decarbonization of the Built Environment
- Unlocking Clean Energy Supply Through Utility Grid Expansion and Improvement
- DOE Better Buildings Initiative’s Support for Building Sector Decarbonization
- BXP’s Ben Myers on Electrifying the Built Environment
- Real Estate Roundtable says CRE Playing Key Role in Success of Federal Climate Programs
- Empire State Realty Trust Makes the Business Case for Decarbonization Strategy
- Norges Bank Says Real Estate Facing “Tremendous Pressure” to Decarbonize