Last November, The Fifth Estate published a piece with a rather blunt headline: “Aussies are not fans of this European sustainability rating tool.”
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I was four months into my new role as chief executive officer of the CRREM Foundation, so of course this caught my attention. I needed to listen.
A few months later, I travelled to Sydney to be part of the Green Building Council of Australia’s Transform conference and to host a roundtable with industry leaders to better understand: “Why isn’t CRREM resonating here, and what would it take for the pathways to be genuinely useful in a sophisticated market like Australia?”
To start from a common base, what is CRREM?
CRREM is a non-profit organisation that develops decarbonisation and energy transition pathways for real estate. Our pathways are openly accessible and exist for all major property types and regions. In Australia, the CRREM Pathways are built at the property type and climate zone level. Across the world, the CRREM Pathways are used by institutional investors such as pension and sovereign wealth funds to assess transition risk in their real estate portfolios – I actively used them in my previous role at PGGM.
When I got to Australia, what I found was not hostility to the mission or the idea. Far from it. Australia has been a global leader in real estate sustainability for decades, with some of the world’s most experienced and highly skilled practitioners. The ambitions we have are aligned. What wasn’t landing was the “how.”
Applying a global framework to a market before it had done the work to understand local nuance, calibrate appropriately, and earn credibility simply didn’t work. There was a strong feeling that CRREM had been imposed on Australia rather than developed in partnership with it, and that important technical feedback from the market wasn’t finding its way into the framework. I would be frustrated too.
The same message came through consistently across Australia – and elsewhere. CRREM needs to do a better job of reflecting local market realities, and it highlighted a major opportunity: connecting global consistency with local applicability in a way that ultimately makes CRREM stronger.
That challenge has inspired a completely new model for CRREM’s future.
As Jorge Chapa, chief impact officer at the GBCA and member of CRREM’s Technical Council put it: “CRREM’s ambition was always right. What Australia added was a clear picture of how our buildings behave. That input is now shaping the methodology itself, from decoupling energy from carbon to testing pathways against real world energy use. Those insights aren’t only useful here; they’ll help the framework match its ambition globally.”
A highly efficient, fully electrified building with no onsite fossil fuel combustion can still carry high carbon intensity if powered by a fossil-fuel-heavy grid.
Earlier this year, we announced that CRREM would be moving to an “open-contribution model.” This invites data platforms, governments, building owners and occupiers, associations, and research institutions from around the world to contribute data and intel into the CRREM Pathway development.
This builds on a much strengthened governance with the launch of three regional advisory committees and advances our ambition to combine global scientific rigor with grounded market input. In short, we know we will never know your market better than you do, and the open-contribution model is how we capture best-in-class local input and meaningfully integrate it into a global framework.
“CRREM’s more inclusive governance model is an important step forward. Global pathways need scientific rigour, but they also need to be grounded in market insight,” says Rick Walters of Aware Super and member of the CRREM Foundation Board.
“Giving investors and local experts a clearer voice in how the framework evolves will help make CRREM a more credible, practical and useful tool for managing real estate transition risk in markets like Australia.”
The most tangible expression of this is happening right now in our ongoing energy use intensity (EUI) pathway methodology revision, which is the most significant technical undertaking since CRREM was founded, and one directly shaped by what we heard in Australia.
Until now, CRREM’s energy and carbon pathways have been coupled: the carbon pathway was the primary lens, with energy intensity limits essentially derived from their using grid carbon intensity.
In markets where electricity grids are still heavily fossil-fuel dependent, a building can appear to be on a low-carbon trajectory simply because the grid is cleaning up, not because the building itself is becoming more energy efficient. And vice versa – a highly efficient, fully electrified building with no onsite fossil fuel combustion can still carry high carbon intensity if powered by a fossil-fuel-heavy grid.
The EUI pathway methodology revision, which is in development with our technical council, breaks that dependency. In the new methodology, we expect the energy pathways will be derived directly from the International Energy Agency’s net zero by 2050 global energy budget for buildings, independent of CRREM’s carbon pathways, giving EUI its own scientific footing.
The revised methodology will also incorporate a technical feasibility test, checking that downscaled targets are achievable in real buildings.
Further, and enormously important for a market with multiple climate zones like Australia, the cooling factor is expected to evolve to account for hot, humid climates more accurately by incorporating wet-bulb temperature and shifting the cooling onset threshold.
In these developments, Australian expertise isn’t just being consulted. It has a seat at the table where the methodology decisions are made.
Jorge Chapa and Sven Teske of University of Technology Sydney are invaluable members of our independent technical council, which has formal ownership of how the CRREM pathways are generated.
Additionally, Rick Walters serves on the CRREM Foundation Board, having direct fiduciary and strategic oversight of the organisation at large.
Chris Nunn from The Living Company and Magali Wardle from NABERS both sit on our APAC regional advisory committee, providing strategic advice for our board and technical council.
Magali is also a member of our building performance measurement task force – addressing global comparability of building energy use intensity measurements.
Reading that article back in November was tough. But it was the warning shot that defined my visit down under, and Australia sent me back home with a clearer sense of what CRREM needed to become.
The criticism wasn’t resistance for the sake of resistance. Australia was right to push back, and I am grateful for it. Because this call to action helped us rethink our approach entirely and turn it into a roadmap that we’re executing on. In short, CRREM is better because of it.
