Seven Steps to Climate-Aligned Pathways
The CRREM Pathways are based on a globally standardized methodology that starts from a carbon budget aligned with a 1.5°C scenario and allocates it across real estate globally.
Science-Based Carbon Budgets
The methodology begins by allocating global or regional carbon budgets derived from IPCC climate scenarios (e.g., for limiting global warming to 1.5°C or 2°C). These budgets represent the maximum allowable greenhouse gas emissions to remain within specific temperature thresholds.
Sectoral Allocation
CRREM allocates a portion of the global carbon budget to the real estate sector. This allocation is further divided by country, building type (e.g., residential, office, retail), and climate zone using parameters such as:
- Existing building stock and floor area
- Historical energy demand
- Local climate data and heating/cooling degree days
Carbon Intensity Pathways
The result of the allocation is a carbon intensity pathway, expressed as kgCO₂e/m²/year — carbon emissions per square meter over time. These pathways decline annually to reflect necessary emission reductions to stay within the allocated carbon budget. They serve as benchmarks for evaluating individual assets or portfolios.
Energy Intensity Pathways
In addition to carbon intensity, the methodology also defines energy intensity pathways expressed as kWh/m²/year — total energy demand per square meter. This reflects improvements in building energy efficiency and shifts in energy supply (electrification or district heating).
Emissions Factors & Grid Decarbonization
CRREM accounts for changes in national or regional emission factors (e.g., grid carbon intensity) over time. As electricity grids decarbonize, buildings using electricity will emit less CO₂ — this is incorporated into future projections.
Pathway Divergence Analysis
The core application of the methodology is to identify the year of misalignment of an asset — defined as the first year in which the building's carbon intensity exceeds the CRREM pathway. This marks when an asset's trajectory diverges from science-based climate targets, signaling the onset of material transition risk across regulatory, financial, and/or reputational impacts.
Dynamic & Scenario-Based
The methodology allows for dynamic modeling and can be adapted to different policy and market scenarios. It uses time-series data to simulate building emissions trajectories and assess compliance under changing conditions.
The CRREM Pathway Methodology underpins tools and decision frameworks that support climate transition risk assessment, retrofit planning, and ESG reporting in the real estate sector.
Have a question about the methodology?
Ask Clem about how the CRREM Pathways are calculated, what data sources are used, or how the methodology applies to your buildings.
Resources & Tools
Download the full methodology document or explore the CRREM Pathways and Risk Assessment Tool.
