Decarbonizing-Commercial Real Estate CBRE

Decarbonizing
Commercial
Real Estate
A guide to making your carbon-reduction
strategy a reality
DECARBONIZING COMMERCIAL REAL ESTATE
Introduction
Reducing environmental impact is a priority for companies across the

world. Commercial real estate owners, occupiers and businesses will likely
need to develop plans to decarbonize portfolios quickly, and at scale.
The pressure is on
The effects of climate change are becoming clear, and people are demanding that businesses
play an active role in reducing their carbon footprint.
Consumers are now prioritizing environmentally conscious brands. Employees seem more likely to accept jobs
from sustainably-aware employers. Many governments are making carbon-reduction commitments and
regulators are stating their intent to introduce legislative changes. Investors are seeking evidence that
companies are prioritizing decarbonization.
As part of the November 2021 Conference of Parties (COP26) in Glasgow, governments across the world
agreed that 90% of global emissions should be reduced to zero. The Global Carbon Budget report released at
COP27 revealed that carbon emissions are on track to rise nearly 1% in 2022, exposing the large gap between
promised targets and actual, rising emissions. The quality of these targets varies—and more will need to be
done to reduce emissions in line with the 1.5°C Paris Agreement.1 However, these commitments are now
shaping policy.
37%
Worldwide, buildings are responsible for 37% of global carbon emissions and 34%
of energy demand. Other environmental impacts of buildings include resource
depletion, air, water and land pollution and biodiversity loss.2
Decarbonizing will require clear strategies, targets and roadmaps.
1. The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196 parties at COP 21 in Paris, on December 12, 2015 and
entered into force on November 4, 2016. Its goal is to limit global warming to well below 2, preferably to 1.5°C, compared to pre-industrial levels.
2. UN Environment Programme: 2022 Global Status report for Buildings and Construction (unep.org)
Confidential & Proprietary | © 2023 CBRE, Inc. 2

What is
decarbonization?
Decarbonization is the permanent removal
of carbon emissions from an organization’s
value chain by implementing sustainable,
clean energy systems and a low-tolerance
approach to residual emissions.
IMAGE

The time is now

Over the coming decade, companies are preparing for significant changes. More than 450 firms
have committed $130 trillion to achieving net zero, through the Glasgow Financial Alliance for Net
Zero (GFANZ). These commitments include decarbonizing global assets over the next 30 years.
However, the issue’s scale cannot be underestimated. According to the Carbon Risk Real Estate
Monitor (CRREM) and the Global Real Estate Sustainability Benchmark (GRESB), only 15% of
global assets currently align with the Paris Agreement’s 1.5°C target. This means 37% of global
buildings will need to be decarbonized by 2030, which presents a significant challenge for the
real estate sector.1
Every company needs an actionable decarbonization strategy

Failure to drive decarbonization could soon become a business liability—and contribute to global
socio-economic and environmental risk.
It's critical for every company to have a proactive decarbonization plan, made up of clear
strategies and roadmaps that span operations, leasing and capital expenditure (Capex) —and
that have performance targets. Having a plan is the only way to manage up-front costs and
regulation.
38% 13% 36%

Of CBRE GWS enterprise Have carbon neutrality goals Have strategies in place to meet
clients have made net-zero their carbon reduction goals
commitments
1. Building Performance Standards aim to reduce carbon emissions across the U.S. CBRE Econometric Advisors | Viewpoint

What is the difference between

net zero and carbon neutral?
Net zero is a strategy to reduce carbon emissions through
efficiency, electrification and use of renewable energy. A
company reaches net zero when the amount of greenhouse
gas they produce is no more than the amount they remove.
To achieve net zero, a company must decarbonize its entire
value chain as outlined by the Science Based Targets
Initiative’s Net Zero Standard.
Carbon neutrality is where a company commits to not

increasing its carbon emissions—and offsets the carbon it
already emits. This strategy does not address a company's
value chain. Instead, it compensates for the carbon it
produces by purchasing credits outside of the organization.

Of CBRE Global Workplace Solutions’ 150 enterprise clients, fewer than half have published strategies in place
to meet their carbon-reduction goals. This isn't surprising. Creating a real estate decarbonization strategy that
includes management, finance, operations and decision-making can feel overwhelming.
Yet delaying action can lead to significant business risk. And of course, the threat to global economies,
societies and the environment looms.
That’s why we’ve created this guide: to give you a robust framework to plan your decarbonization strategy.
1 metric ton (mT) of carbon dioxide (CO2) is equal to:
1,106
Source: EPA Greenhouse Gas Emissions 2.3 121,643 40.8
pounds of coal barrels of oil smartphones propane cylinders
burned consumed charged used for home
barbeques

Phase
Establish your
01 decarbonization
strategy
To start, you must understand how much carbon you're

emitting—and from where. Only when you have this information
can you set goals, identify opportunities and develop a strategy.
Start planning with these steps:
01 02 03 04
Build a team Understand your Set Develop strategy
carbon footprint and targets and tactics
associated risks
05 06 07
Publish targets Report Provide
and strategy and monitor internal incentives

01
Build a team and engage stakeholders
Decarbonization affects every area of the business—so bringing stakeholders together
is a must. Climate affects every job, and siloed approaches won’t work. All stakeholders in
corporate real estate and the C-suite should be engaged and aligned in an approach that’s
both top-down and bottom-up.
02
Understand your carbon footprint and associated risks
Identify the type and source of data needed to establish a baseline inventory for greenhouse gas
(GHG) emissions.
– Review your carbon emissions data and boundaries for GHG emissions: Are there any gaps?
– Carry out decarbonization audits at your sites and evaluate space utilization within the portfolio. Data from
these audits and assessments will provide meaningful insights into how you prioritize decarbonization
decisions, site by site. It will also help you to verify data you collate from across the business.
– Make sure your technology architecture is robust enough to produce financial-grade, auditable data.
This will be vital for compliance, reporting and keeping your organization on track. Ideally, you will be
able to produce data visualizations to help stakeholders understand the progress you're making towards
your goals.
– Carry out risk vs. return analysis. Start in the early stages of planning and continue on a regular basis.
Carbon removal must be seen as equal to all other financial-model risk factors. So think about the financial,
operational and reputational risks of not achieving your decarbonization targets. Then decide the financial
investment needed to mitigate them.
– Review your portfolio strategy and its alignment with climate goals. Are you in the right markets? Do you
occupy the right square footage?
03
Set targets
You can't change what you don't track. So set objectives that are aligned to your company's
ambitions, as well as external, standard frameworks. We recommend aligning or certifying your
targets to The Science Based Targets initiative (SBTi). Then use your goals to inform
activities—and measure what you achieve.
Absolute and intensity targets are both ways to measure a company's progress towards reducing
GHG emissions. An absolute target is one that aims to reduce GHG emissions by a set amount in
relation to the total being emitted. For example, to reduce emissions by 45% by 2030.
An intensity target is a normalized metric that sets an emissions target relative to an economic or
operational variable. For example, revenue or number of employees. This allows for a business to
set emissions reduction targets while taking into consideration economic growth.
While an absolute reduction is the ultimate end goal, businesses should also consider intensity
targets as they balance energy demands associated with growth and cutting overall emissions.

What are Scopes 1, 2 and 3?

Greenhouse gas emissions scopes organize and measure
carbon emissions according to how they are created.
Scope 1 Scope 2 Scope 3

Carbon is emitted Carbon emitted This is the largest
directly from a indirectly through category, with 15
company's building electricity or fuel sub-categories.
systems and vehicle consumption for Carbon is emitted
fleets heating and/or indirectly via the
cooling buildings value chain, through
the products and
carbon produced by
their suppliers.
Read more about Scope 1, 2 and 3 emissions

04
Develop strategy and tactics
With a clear understanding of your GHG inventory and high impact opportunity areas, you can
begin your decarbonization roadmap. Our approach is based on the carbon-management
hierarchy, often described as “reduce what you can, offset what you can’t." The following tactics
should be implemented across your operations an value chain to achieve deep emissions
reductions:
Tactic 1 Tactic 2
Continuously improve energy Electrify your portfolio
efficiency
Tactic 3 Tactic 4
Transition to renewable sources Credibly offset the remaining
of energy and alternative fuels carbon balance
Deploy tactics across own operations and your whole supply chain
05
Publish your targets and strategy
Companies can participate in sustainability regimes by voluntarily disclosing their targets. Each
regime gives corporations an opportunity to set out their sustainability ambitions. The table
below gives examples of disclosure regimes our clients use—often reporting in more than one.
Real estate
Disclosure Region- Industry occupier?
Regime Description specific? segment Investor?
CDP Global CDP is a not-for-profit that runs a global environmental disclosure Global All Both
system. It supports thousands of companies, cities, states and regions
to measure and manage risks and opportunities on climate change,
water security and deforestation.
According to a 2020 report, investors and large purchasers with more
than $110 trillion in assets and spending power asked companies to
use CDP to disclose their environmental data.
Continue

Real estate
Task Force on The Financial Stability Board (FSB) created the TCFD. It did so to Global All Both
Climate- develop recommendations on the types of information companies
Related should disclose to support investors, lenders, and insurance
Financial underwriters in assessing risks related to climate change.
Disclosures The TCFD framework allows investors to understand the financial
(TCFD) impacts of climate on organizations - and how it influences their
business decision-making.
TCFD draws from the Global Reporting Initiative (GRI)
described below.
Global GRI is an independent, international body that helps businesses and Global All Both
Reporting organizations to use a common language for sustainability reporting.
Initiative (GRI) GRI standards are developed by the Global Sustainability Standards
Board (GSSB).
The organization provides specific, measurable goal setting and
accountability for organizations. Reporting is voluntary.
Science Based The SBTi is a partnership between the CDP, the United Nations Global Global All Both
Targets Compact, World Resources Institute (WRI) and the World Wide Fund
initiative for Nature (WWF).
(SBTi) Targets are considered science-based if they align with what
climate science has established is necessary to meet the goals of the
Paris Agreement.
Science-based targets provide a clear pathway for companies
and financial institutions to reduce GHG emissions. This helps to
prevent the worst impacts of climate change and future-proof
business growth.
The STBi sets robust standards for reducing emissions and reaching
net-zero targets, with a direct focus on transitioning to zero carbon
and tackling climate change. Reporting decarbonization efforts using
this disclosure regime can boost investor confidence.
Global Real GRESB provides validated ESG performance data and peer Global All Both
Estate benchmarks of real assets for investors, occupiers and managers. This
Sustainability improves business intelligence, industry engagement and decision-
Benchmark making. It also allows organizations to compare their ESG performance
(GRESB) score against peers within sectors and geographic regions. It provides
transparency and consistency for related ESG reporting.
European One of the most widely used and recognized indices of listed Europe All Both
Public Real real estate is the FTSE EPRA Nareit Global Real Estate Index. It
Estate comprises almost 500 real estate companies, with a combined value of
Association €1.4 trillion.
(EPRA) EPRA’s mission is to represent, promote, and develop the European
listed real estate sector through activities and services for the wider
real estate investment community.
Task Force on TFND develops and delivers a risk management and disclosure Global All Occupiers
Nature- framework for organizations to report and act on evolving nature-
Related related risks.
Financial
Disclosures
(TNFD)
Continue

Real estate
Net Zero The Net Zero Banking Alliance is a U.N.-convened group of global Global Financial Occupiers
Banking banks that represent about 40% of global banking assets. They Services
Alliance reinforce, accelerate and support the implementation of
decarbonization strategies by providing a framework and guidelines to
operate within. This is supported by peer-learning.
The organization provides a platform for financial institutions to
publicly commit to net zero ambitions.
Sustainable The SBER is a strategic advisory and support service for ESG Global All Both
Business & programs. It helps management teams set goals, drive progress and
Enterprise report results as they lead their organizations to more sustainable
Roundtable high performance globally.
(SBER)
06
Report and monitor
Companies are already required to comply with local, regional and national legislation such as New York
City’s LL97, Boston’s BERDO, Singapore’s CPA and the EU’s EED. These are all are current examples of
laws that require companies to demonstrate compliance. In our view, environmental compliance is likely
to become increasingly demanding and complex.
07
Provide internal incentives
Outline Key Performance Indicators and be clear about monitoring responsibilities so that internal
stakeholders can drive results toward your goals. Set internal milestones and make sure all processes
are transparent.
Learn more about our Sustainability Strategy & Planning Services here >

Phase
Continuously
02 improve energy
efficiency
Once you have your strategy in place, the next step is to permanently
remove carbon from your portfolio’s assets. But where to start?
Energy efficiency is one of the most important short-term steps. The more energy use is
reduced, the less burden on other decarbonization tactics. Energy efficiency creates a
practical and immediate reduction in emissions, making it the low-hanging fruit to pick.
Continue to strategically invest in new ways to improve energy efficiency. It goes without
saying, the cheapest and greenest energy is the energy we don’t use.
Useful steps to follow:
01 02 03
Collect Prioritize Allocate capital
comprehensive activities to scale your
data efficiency projects

What is the difference between

carbon reduction, carbon offsetting
and carbon sequestration?
Carbon reduction: reducing the amount of carbon a company
produces in its value chain.
Carbon offsetting: when a company continues to produce

carbon in its value chain, but compensates for it through
buying carbon offsets that fund projects like reforestation.
Carbon sequestration: when emitted carbon is removed from

the atmosphere and held in solid or liquid form.

01
Collect comprehensive data
Without accurate asset data, understanding and reducing energy consumption and carbon emissions is
very difficult. Data can be pulled from your company’s facilities management work order system (CMMS)
or smart sensors, where applicable. You need such information as the useful life of your assets, their
condition and where your portfolio emits the majority of its carbon.
Here is what this kind of data looks like on our own dashboards:
Source: Asset data collected across 131 CBRE enterprise account portfolios.
Learn more about CBRE’s Sustainability Reporting and Insights services here >
02
Prioritize activities
With accurate data, you can assess and prioritize which
assets will need to be replaced, upgraded or retrofitted to
achieve carbon-emission reductions. Knowing the age and
criticality of your assets allows you to identify which assets
need to be replaced immediately, as well as those that are
approaching end of life. Then you can plan to replace these
assets with energy-efficient systems.

03
Allocate capital to scale your efficiency projects
Urgency is key with decarbonization. But what if you don’t have the up-front capital to rapidly
scale efficiency projects? The answer may be to work with a partner who can fund your projects
up front and can be repaid with the savings generated.
These are examples of how CBRE and Redaptive partnered to fund accelerated decarbonization
projects across three client journeys:
Digital Financial Technology

services company services institution company
– Replaced 139K lighting fixtures – Replaced 5.4K high-risk – Retrofit and replacement
with LEDs across five countries HVAC assets across 1.3K program for portfolio
and 174 locations locations and 26M sq. ft. system chillers
– Achieved 410M kWh reduction – Reduced C02 emissions by – Avoided 2.7K mT of carbon
over 10 years 259 tons dioxide annually
– Avoided 290K mT of C02 – Removed the harmful – Gained $1.15M in
emissions. This is equivalent to GHG R22 utility incentives
the emissions generated by – Achieved gross savings of – Two-year simple payback
33K homes in a year, or the $8M over 10 years
carbon that 4.8M trees
could offset
– $55M in gross
energy savings over the
10-year term
mT Metric ton
kWh Kilowatt hour
mWh Megawatt hour

Phase
Electrify real estate
03 and transportation
The future of buildings and transportation is electric.
In buildings, electrification has the potential to reduce emissions,

improve an asset’s bottom line and attract quality tenants. The
electrification of fleet vehicles also offers many benefits including
lower maintenance costs, improved fleet efficiency and reduced
fuel costs.
01 02 03
Implement building Electrify fleet Deploy EV charging
electrification technologies vehicles infrastructure

What is the business case for

building electrification?
Financial: All-electric buildings unlock significant cost saving

opportunities. When combined with renewable energy
generation, companies can protect themselves against
natural gas market volatility and equipment replacements
leading to lower operating costs over the long-term.
Environmental: Achieving net zero goals is not possible until

buildings are entirely powered by renewable energy. With this
in mind, electrification of assets must become a priority if
owners and occupiers are to achieve their commitments.
Regulation: Governments both local and national are

increasingly passing legislation to incentivize building
electrification and restricting the use of fossil fuels. Getting
ahead of these changes provides organization with an
opportunity to build a sustainable competitive advantage.

Have aggressive decarbonization goals? Electrification is a must.

Companies making aggressive net zero pledges for 2040 or earlier will likely need to purchase offsets
in order to meet those goals. However, if their targets are aligned or certified with Science Based
Target’s Net Zero Standard, offsetting combustible fuels is not compliant. Therefore, time is of the
essence for electrification.
01
Implement building electrification technologies
Buildings account for 40% of global carbon emissions. Seventy-five percent of these emissions
can be attributed to heating, cooling and lighting.1 Buildings of the future need to find ways to
cut down on their energy consumption. Fortunately, advances in technology means electricity
can be used much more efficiently.
Due to the efficiency of electric technologies compared to fossil fuel-based alternatives,
building electrification can significantly reduce energy demand and CO2 emissions. Here are
two interconnected technologies you can implement across your portfolio for maximum impact:
Heating and Smart building platforms

cooling systems (IoT)
Heat pumps are a key technology utilized by Smart systems have a critical role to play in
building owners seeking Net-Zero Energy helping buildings to achieve greater efficiencies.
Certifications. With accurate responsive energy management
They work by transferring thermal energy from software, you can:
outside (from air or the ground) and feeding it - Pull exact amounts from the grid and no more
directly into your building. This cycle is also - Monitor consumption to switch on and off
reversible meaning they can transfer warm loads to limit usage and lower emissions
indoor air to outside.
Armed with this data, owners and operators can
Installing a heat pump system may provide proactively pinpoint opportunities to reduce
significant savings through reducing fuel bills as energy usage, create safer and more productive
they are three to five times more efficient than working environments and lower costs.
electric resistant systems.
1. How smart buildings will pave the way to a decarbonised building sector – Smart Buildings Magazine

02
Electrify fleet vehicles
What you should know about how EVs reduce emissions and help you achieve your
climate/net-zero commitments:
Lower Total Cost of Ownership: EVs have fewer moving parts and cost considerably less to maintain.
Provide a Green Solution to Your Clients: Customers increasingly demand sustainable products and
services from their vendors. An electric fleet contributes materially to this in a highly visible manner.
Safety: EVs are generally considered safer than ICE vehicles due to additional testing requirements, lower
center of gravity preventing rollover and lack of engine components allowing for additional crumple zone
space in the event of a collision.
03
Deploy EV charging infrastructure
Workplaces & Multi-family Retail: Destination &

Real Estate Fast-charging
In addition to reducing emissions and achieving At retail locations ranging from shopping malls to
climate goals/net-zero commitments, there are restaurants to service providers, EV charging
key benefits for implementing EV charging stations deliver multiple benefits:
infrastructure at corporate offices and multi- Increase Traffic & Dwell Time: customers
family locations: prefer retail outlets with EV charging, to charge up
Attract & Retain: employees and tenants while they’re at your establishment. Studies have
increasingly switch to EVs, and expect to be able shown increased dwell times, which typically
to charge their vehicles at home and at the translates into higher revenues. Even if offering
workplace. Offering EV charging (for free or at a EV charging for free, the return on investment can
fee) is an opportunity to differentiate your be very significant.
property from others, and will become the norm Incremental Revenue From On-the-Go Fast
in the near future. Charging: installing DC fast chargers at your retail
Comply with Building Codes: even if today property can generate revenue in two ways: 1) fast
installing EV charging is not required, it is charging networks lease unused parking spaces
highly likely that this will be the case in the from you; 2) EV drivers take advantage of their
future. Get ahead of the curve, and benefit from charging stop to visit your retail establishment.
available incentives. Strong Branding Opportunity: consumers
Provide Charging for Your Community: outside increasingly prefer brands with sustainability
of office hours, you can elect to open up your EV values. EV charging provides a highly visible way to
charging stations to the general public, providing communicate your brand values to consumers.
a valuable service and earning additional revenue.

Where to start?
Find a partner who can assist you throughout the entire electrification journey, including:
– Assess EV charging requirements (quantity and type) and available power at each location
– Engage with landlords to secure charging sites and/or negotiate lease adjustments to accommodate EV charging
– Identify and secure available incentives at Federal, State, Municipal and Utility level
– Engage with utilities to secure additional power, and/or deploy on-site solar and battery storage as required
– Design, engineering, procurement and construction of EV charging infrastructure
– Manage charging infrastructure to minimize electricity cost, through smart charging, load management
– Maintain charging infrastructure to ensure maximum uptime
– If required, provide financing solutions, to avoid an upfront capital outlay
Learn more about our Electric Vehicle Infrastructure services here >

Phase
Transition to
04 renewable energy
and carbon-free fuels
Electrification and renewable energy integration are intrinsically linked
as dependent decarbonization strategies. To achieve deep GHG
emission reductions, continued integration of renewable energy and
carbon-free fuels into the electric power grid is required.
01 02 03 04
Which type of Renewable Alternative Further
renewable energy energy markets fuel options renewable energy
will meet goals? considerations

01
Which type of renewable energy will meet your goals?
A good rule of thumb in energy transition is that carbon reduction is more achievable when
renewable energy is generated close to where it will be consumed.
The following types of clean energy can be generated close to where they are used, unlike
types such as hydropower and nuclear.
Impact on Realistic for a

Up-front reducing carbon commercial
investment emissions property?
Solar $$ High Yes
Harnesses the energy produced by the sun,
even in cloudy weather
Solar thermal $$$ Medium Yes
The energy harnessed from the sun is converted
to heat instead of electricity
Wind $$$$ Medium No,
Large turbines harness the kinetic energy of the wind Rarely applicable
and convert it to electricity for an individual
site
Geothermal $$$ Medium No,
Extracts heat from the Earth's interior using technology Only ground
including wells and heat pump technology source heat pumps
Biofuels $$$$ High Yes

Organic materials including wood, charcoal, algae and
manures produce heat and power. They create GHG emissions,
but at lower levels than fossil fuels.
Currently, one type of renewable energy is

practical and commercially viable for real
estate owners and occupiers: on-site solar
photovoltaics (PV). Energy from the sun is
the single most abundant of all energy
resources that can be harnessed; it's
captured during the day when emissions
from the grid are at their highest. Solar PVs
are now more affordable, as the cost has
decreased dramatically in the last decade.
According to the International Renewable
Energy Agency (IRENA) the cost of Solar PV
module prices have fallen by 90% since the
end of 2009.1
1. Power Generation Costs – International Renewable Energy Agency

02
Renewable energy markets
What are renewable energy markets? How do they work? And what is the best way to procure
from them? There are two options:
Physical Power Purchase Virtual Power Purchase

Agreements (PPAs) Agreements (vPPAs)
If you don't want to invest in generating your own A vPPA is a form of hedging with an agreed baseline
renewable energy, you can buy it from a specialist price per kWh. The renewable energy provider sells
company using PPAs. Under these agreements, the power into the local wholesale market. If they sell it for
energy vendor sets up and maintains the renewable more than the baseline price, they pay you the
energy technology—for example, a wind farm or solar difference. If they sell it for below the baseline price,
energy array—and the energy purchaser agrees to buy you pay them the difference. This means that it's vitally
the power on a per kWh basis. These agreements important that you understand your downside risk—
typically run for 10-20 years and can include an and that you work with finance colleagues to align your
"escalator" that increases the unit price of electricity company’s accounting.
over time.
Support from a specialist consultant can help you to
If you enter into a PPA to reduce carbon, you must understand your risk profile and demand capacity. They
retain the Renewable Energy Certificate (REC) to verify can also identify credible projects—for example, those
the amount. An REC is a tradable certificate that acts as close to load centers.
proof that one MWh of electricity has been produced
from a recognized renewable energy source. When you
negotiate a PPA, you should also decide if you want to
include escalators.
Getting started with PPAs and vPPAs

A good first step is to talk to an intermediary, rather than engaging directly with a project developer. This
allows you to enter into negotiations with a clear understanding of your risk profile and demand. An
intermediary should also be able to recommend developers, based on your profile.
03
Alternative fuel options
Renewable natural gases (RNGs) and biofuels are captured from decomposing organic materials. RNGs
are processed and cleaned in agricultural, landfill, food waste, wastewater treatment and anaerobic
digestion (AD) facilities before they're injected into the natural gas pipeline.
– Left alone, these organic materials can produce methane, which has a global warming potential 25 times greater than
carbon dioxide. Methane also has a relatively short atmospheric life, which means its impact is felt most locally.
– Using RNGs prevents methane’s release into the atmosphere, thus achieving short-term reductions in GHGs. They are
also useful to companies that need to offset methane emissions.
– RNGs can be used for electricity generation, heating and cooking, bioplastics and vehicle fuel. Another bonus: they're
distributed using existing infrastructure, such as pipelines and heavy-duty vehicles.

04
Further renewable energy considerations
As you begin your transition to clean energy, you are likely to see these terms:
Energy Attribute Certificate (EAC)

This certificate shows that electricity has been generated from renewable sources. Having EACs
allows companies to credibly report that they’re either:
Using Reducing the environmental Reducing lower

renewables impact of their electricity use Scope 2 emissions
EACs are available as:

– Renewable Energy Certificates (RECs) in North America
– Guarantees of Origin (GOs) in Europe
– International RECs (I-RECs) across the rest of the world
However, it's important to remember that if you're aligning and certifying your targets with SBTi, EACs are not
allowed for offsetting combustible fuel emissions. This is why electrification should remain a key component of
your decarbonization strategy.
Green energy tariffs

Utility companies offer these programs in regulated electricity markets. The tariffs allow large
commercial and industrial customers to buy bundled renewable electricity from specific projects,
at a special rate.
Some programs allow companies to choose a market-based rate. In others, the company engages
directly with the renewable generation project. Alternatively, the utility company can facilitate the
purchase of green electricity through a power purchase agreement.
Learn more about our Renewable Energy Services here >

Phase
Decarbonizing
05 your supply chain
To decarbonize, it is important to plan to reduce and offset emissions

in your supply chain.
However, supply chains are complex systems including suppliers, manufacturers and
distributors, each contributing differently to GHG emissions.
To reduce carbon emissions in your supply chains, you need to understand how each
moving part within it contributes to climate impact.
01 02 03 04
Remember – Measure the carbon Source Build
supply chain in your supply chain sustainably alliances
emissions are
Scope 3 emissions

How does an organization’s

value chain differ from its
carbon footprint boundary?
A value chain includes all the processes and activities a
company needs to deliver their product or service.
A carbon footprint boundary describes where an

organization’s responsibility for carbon emissions starts and
stops. To calculate its carbon footprint, an organization has to
understand how each activity and process along its value
chain creates emissions—and what percentage of these
emissions it has the power to influence.
Find out more about carbon footprint boundaries in the value chain

01
Remember – supply chain emissions are Scope 3 emissions
Usually the largest category for companies, Scope 3 emissions are produced throughout their
value chain and can include emissions produced making their suppliers’ products or created when
customers use their products and services.
Some ways to reduce Scope 3 emissions include:
Reduce the amount of Buy fewer Buy from companies Make products that
goods and services you buy carbon-packed products that have decarbonized make less carbon
02
Measure the carbon emissions in your supply chain
Measuring emissions in upstream supply chains is a complex data challenge that many companies
are only beginning to tackle. Companies may use one or a combination of these methods below to
measure emissions in their supply chains depending on their emissions accounting maturity::
Proportional spend Custom carbon factors

Organizations calculate their approximate emissions, Companies calculate the carbon emissions for every
based on their location and categories with an individual product purchased or service used. This
emissions factor data set. Companies using these tools method produces more accurate Scope 3 calculations.
are essentially best-guessing their Scope 3 emissions.
03
Source sustainably
To source sustainably, companies can use a supplier sustainability
assessment rating service like EcoVadis. Services like these can rate,
benchmark and score across the supply chain so that you can
purchase from sustainable companies. Setting these standards for
your business will incentivize procurement to set criteria and give
preference to companies adopting sustainable business practices.
04
Build alliances
Strengthen your supply chain by forming alliances with companies
who are also decarbonizing, which creates a lower emitting
ecosystem and more transparent suppliers.
Learn more about CBRE’s Sustainable Supply Chain Consulting

Services here >

Phase
Offsetting your
06 carbon balance
After fully implementing other tactics, the last step is to explore

credible, high quality carbon offset opportunities.
Key considerations:
01 02 03 04
Understanding How to use Example of Risks associated
carbon offsets carbon offsets offsets at work with offsetting

01
Understanding carbon offsets
Carbon offsets are investments in projects that either take carbon out of the air or prevent new
carbon emissions. Examples of offset projects include forestation, where trees take carbon out of
the air, and sequestration, where technology removes carbon from the air.
02
How to use carbon offsets
You have a net-zero target to meet, and you've identified and attempted to reduce every possible
source of carbon emissions. So how do you decarbonize? Enter carbon offsets. They allow you to
invest in ways to remove from the environment the carbon you can't help emitting.
Ways to incorporate carbon offsets into your decarbonization approach:
– As part of a defined strategy with a set scope and percentage of emissions you will offset
– With a short, medium and long-term plan for purchasing offsets
– With ongoing monitoring and reporting on the performance of any offsets you purchase
03
Example of offsets at work
This is a straightforward example of how offsets work:
Company X takes all Company X closes the This investment These projects reduce
necessary steps to gap by purchasing provides funding for carbon dioxide and
permanently remove offsets equal to the certified projects that other GHGs by
carbon emissions from shortfall in their carbon conserve and restore removing existing
their operations and reduction efforts. forests, generate clean gases from the
portfolio, including: and renewable energy, atmosphere or
or increase energy preventing new
– Fuel switching and efficiency. emissions.
electrification
– Producing their own
renewable energy
But they still
haven't quite
reached their emission
reduction targets.

04
Risks associated with offsetting
Purchasing offsets is not necessarily straightforward, and you need to do your research.
Key considerations:
– Durability
How long will the projects capture and hold carbon for? Be sure that the project has longevity.
– Transparency
Many organizations offering carbon offset projects lack transparency. If you cannot access key
information about the project, it will be impossible to decide if it aligns with your goals. For this
reason, look for certified schemes.
– Accountability
Many carbon offset providers fail to provide enough information about the environmental impacts of
their projects. So unless you want to guesstimate environmental impact, look for a provider that
shares complete information.
– Cost of offsetting is likely to rise
As demand for offsetting increases, costs are likely to increase as lower cost projects are used up.
05
Who issues carbon offsets?
Numerous carbon offset providers are available. However, the industry lacks governance and
transparency. An intermediary can help you navigate the sector and purchase credible carbon offsets.
Remember, purchasing carbon offsets should be a final action after all other tactics—efficiency, fuel
switching, electrification and renewable energy technologies—have been exhausted.
When you're looking to offset, we recommend pursuing:
Providers who focus High quality No conflicts of

on carbon removal Clear accounting of standards interest
carbon removed,
rather than reduced
Third-party scientific or other mixed Providers who have No hidden
verification or approaches a mitigation plan environmental or
accreditations in place social harms
Innovation with Providers with the

Durability
substantiation potential to scale
Ability to set
benchmarks for
future investment
Short, medium and long-term offsets that build a
Alignment with SBTi
portfolio for investment over time

Realize your commitment to a low-carbon future with

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Transformation is needed across every sector of the global economy to

limit global warming to no more than 1.5°C. And commercial real estate has
a critical role to play.
With Zero from CBRE, you can take the right steps towards a low-carbon future. Our global knowledge, sector-
leading data and expert support empower you to navigate the complexities of decarbonization. Auditing,
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Decarbonizing

Reducing environmental impact is a priority for companies across the

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Confidential & Proprietary | © 2023 CBRE, Inc. 3

The time is now

Every company needs an actionable decarbonization strategy

38% 13% 36%

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What is the difference between

Carbon neutrality is where a company commits to not

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1 metric ton (mT) of carbon dioxide (CO2) is equal to:

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To start, you must understand how much carbon you're

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What are Scopes 1, 2 and 3?

Scope 1 Scope 2 Scope 3

Read more about Scope 1, 2 and 3 emissions

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What is the difference between

Carbon offsetting: when a company continues to produce

Carbon sequestration: when emitted carbon is removed from

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Digital Financial Technology

kWh Kilowatt hour

mWh Megawatt hour

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The future of buildings and transportation is electric.

In buildings, electrification has the potential to reduce emissions,

Useful steps to follow:

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What is the business case for

Financial: All-electric buildings unlock significant cost saving

Environmental: Achieving net zero goals is not possible until

Regulation: Governments both local and national are

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Have aggressive decarbonization goals? Electrification is a must.

Heating and Smart building platforms

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Workplaces & Multi-family Retail: Destination &

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Useful steps to follow:

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Impact on Realistic for a

Biofuels $$$$ High Yes

Currently, one type of renewable energy is

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Physical Power Purchase Virtual Power Purchase

Getting started with PPAs and vPPAs

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Energy Attribute Certificate (EAC)