CBRE grapples with emissions data headache

CBRE is on a path to net zero, but one glance at its progress suggests something has gone wrong. Reported emissions last year did not fall; they rose sixfold.

Between updates on initiatives that have cut greenhouse gas emissions at CBRE, there was one extraordinary – even baffling – figure in the company’s 2020 Corporate Responsibility Report: Scope 3 emissions had apparently risen from 58m MT CO₂e in 2019 to 361m MT CO₂e in 2020.

But rather than imply a huge increase in actual emissions, those numbers reveal the challenge of collecting data consistently in global property portfolios and translating that to practical targets. This is a challenge others in the industry will also face.

What’s the background to these figures?

CBRE, the world’s largest manager of commercial buildings, set emissions reductions targets in December 2020. The targets, approved by the Science Based Targets initiative, include the following commitments:

• Cut Scope 1 (vehicle and machinery fuel) and Scope 2 (electricity and purchased heating) emissions by 68% by 2035 from the 2019 base year
• Cut emissions from the facilities and properties CBRE manages for occupiers by 79% per sq ft by 2035. For spaces it manages for investors, it aims to cut emissions by two-thirds over that same timeframe. These account for the bulk of CBRE’s Scope 3 emissions (indirect emissions from a company’s supply chain)
• Achieve 100% renewable electricity by 2025
• Transition fleet to electric vehicles

In short, CBRE pledged to cut its emissions based on the greenhouse gases it emitted in 2019.

“As the world’s largest manager of commercial properties, CBRE can play an outsized role in helping to limit the rise in global temperatures, while improving the efficiency and sustainability of building operations.

“Building on our momentum, in late 2020, we committed to science-based greenhouse gas reduction targets with a goal of cutting our operational emissions by more than two-thirds by 2035. We also pledged to make similarly ambitious reductions in the properties and facilities we manage for clients.” – Bob Sulentic, CEO, CBRE

What’s the problem?

Emissions from buildings CBRE manages make up the vast majority, 99.8%, of the company’s emissions. Those emissions rose dramatically – by 519% – in 2020, making it seem as if the company was moving in the wrong direction.

CBRE said this was partly due to better data availability, coverage and quality. For example, the collection of more actual data and granular usage (based on regional factors rather than country averages) resulted in more data from energy-intensive facilities such as data centres and healthcare. Those sectors proved to be more energy-intensive than CBRE had previously estimated.

The end result was better information that replaced estimates with evidence. But it also caused a jaw-dropping increase in emissions on paper where an increase might not actually have happened (or at least been as stark).

Were there other reasons for the rise?

The report also said: “Additionally, we believe that increased ventilation requirements due to the pandemic influenced our energy use from HVAC equipment across the portfolio.” By how much is unclear.

Scope 1 emissions also rose 3% in 2020 due to an increase in the number of fleet vehicles and a rise in fuel consumption.

What will CBRE do now?

The company might need to scrap or reset its baseline emissions. Since its targets are based on 2019 figures that now appear to significantly underestimate actual emissions that year, reductions could look increasingly unrepresentative of actual progress – especially if data collection improves over time.

Already, CBRE’s progress report on Scope 3 emissions reductions looks unrealistic – or even nonsensical. While Scope 1 and 2 emissions have reasonably fallen 5% on the 2019 baseline, emissions (per sq ft) from managed offices for occupiers have risen 639% in one year. In that context, hitting a 79% reduction by 2035 looks much more difficult.

The report said: “CBRE will monitor these year-over-year trends as data collection is improved and assumptions are replaced by actual data to determine if a baseline reset is necessary.”

Were there other challenges in collecting emissions data?

Part of the reason Scope 3 emissions have caused such a headache is because they’re based on CBRE’s calculations of how much other companies – its clients – are emitting in spaces they manage.

But CBRE also highlighted a challenge with recording its own emissions: it leases all the space it occupies (more than 500 offices globally), often in multi-tenant office buildings, many of which have full-building utility meters that measure total resource consumption.

In order to “measure, manage and mitigate” its own consumption, CBRE has to install separate utility meters in its spaces. As of 2020, less than half – 45.5% – of CBRE’s occupied floor area was directly metered.

What has CBRE done to cut emissions so far?

Complications with gathering data aside, CBRE is tackling sustainability in a number of ways:

• Cutting its own office footprint by more than 650,000 sq ft by adopting paperless, hot-desking workspaces at 40% of its locations globally (with more planned)
• Adopting a policy where any building larger than 10,000 sq ft that it refurbishes or relocates to has to be a certified green building. About 3.3m sq ft – 47% of CBRE’s global occupied space – is in certified green buildings
• Sourcing 100% renewable energy in “several” offices in Europe and the UK
• Setting regional goals, such as achieving carbon neutrality in the UK and continental Europe by 2025 for Scope 1 and 2 emissions and by 2030 for Scope 3 emissions
• Partnering with – or acquiring – other organisations such as Romonet, which developed a modelling and analytics software to help users reduce their energy consumption of servers and data centre equipment. Another recipient of CBRE investment, Redaptive, provides “integrated energy efficiency solutions and energy financing for building owners and occupiers”

What effect did the pandemic have on CBRE’s emissions?

CBRE made progress with emissions in 2020: Scope 2 emissions fell 20% and business travel decreased significantly, as did emissions from commuting, investments and purchased goods and services.

However, CBRE did not estimate emissions from employees working from home, powering their computers or heating and cooling their homes during working hours.

If working remotely continues to play a substantial role in people’s jobs, companies will have to start calculating associated emissions. Lloyds, NatWest and energy provider Bulb proposed a methodology to do that in a white paper last year.

• CBRE Corporate Responsibility Report 2020