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Is this the evolution of operational emissions benchmarking, or do we ask too much of the carbon benchmarking tool?

CRREM has announced the end of the tool era and the beginning of a new, pathways-only age. It claims that market maturity has put its Risk Assessment Tool out of a job, but can any benchmark truly account for the complexities of the global energy market?

In some cases, the CRREM benchmarking tool may have been doing more damage than good. With its one-size-fits-all approach, it risks ignoring the many and very important nuances present across energy markets and the real estate industry at large. 

Its retirement announcement has coincided with renewed conflict in the Middle East, serving only to make starker the challenges such tools face. This latest energy crisis has forced a global re-evaluation of procurement strategies – the sort of market shock that static tools will always struggle to navigate.

Find out more, including our suggestions for the benchmark of the future, in our full report: 

CRREM: Chapter II 

For years, an EPC certificate or BREEAM rating was enough to badge a building as sustainable. But expectations have shifted. Investors and regulators are no longer just asking how a building was designed. They want to know how it’s actually being used.

As pressure builds across the value chain, energy consumption data is emerging as a new priority. It’s not just about carbon reporting, it’s about risk management, deal liquidity, and future-proofing portfolios. And in a tightening regulatory and investment environment, the absence of this data is fast becoming a red flag.

A strong EPC rating once gave investors and developers a green tick. But performance ratings don’t reflect how a tenant operates the space. A net-zero-ready warehouse is still a carbon liability if it’s used inefficiently.

Frameworks like the Global Real Estate Sustainability Benchmark (GRESB) factor tenant use into scoring, and tools such as the Carbon Risk Real Estate Monitor (CRREM) provide benchmarks for carbon intensity - including the recently rebranded “CRREM Misalignment Year.” Yet implementation is still uneven, particularly for multi-let assets, manufacturing and data-heavy buildings, where reliable consumption data is hard to collect.

One of the key challenges is the lack of a centralised or standardised system for accessing energy data. In most of Europe, including the UK, landlords need tenant consent to collect usage data, making the process fragmented and highly manual. Without consistent access to data, carbon accounting is unreliable, and landlords and investors risk falling short of their net-zero commitments. If we want to align as a country with the Paris Agreement, a national solution for data access and sharing will be essential.

This shift to prioritising consumption data raises difficult questions especially for landlords operating under existing Full Repairing and Insuring (FRI) leases. If tenants upgrade equipment, alter HVAC systems or over-spec lighting, those changes can quietly degrade the building’s energy performance. And under current MEES regulations, lease renewals - not just lease starts or sales - can now trigger EPC obligations. The result is that some landlords may be on the hook for costly upgrades to buildings they haven’t directly altered.

So far, enforcement has been light. No fines have yet been issued for non-compliant EPCs, and the process for registering exemptions remains slow. But regulatory change rarely happens overnight, it often comes gradually, then all at once.

DTRE are already seeing signs of consumption data influencing deal flow.

EPC ratings have been subtly influencing transactions, particularly in the leasing market, where energy efficiency directly impacts annual operating costs. There is some evidence of their impact on the investment market, contributing to variations in net effective rents through shorter void periods, longer lease terms, and reduced tenant incentives.

In capital markets, investors are increasingly re-certifying assets during transaction due diligence to account for changing regulations, tenant use/fit-outs, outdated EPC assumptions, or older certificates. Any change in the EPC rating can lead to price adjustments - often significant ones. 

But the conversation is evolving. Driven by growing ESG reporting requirements, consumption data is starting to feature in investment committee discussions. Increasingly, investors and developers are questioning whether housing a high-energy user, without a clear decarbonisation strategy, could undermine their investment value.

This shift could have broader implications. If regulations continue to tighten and energy prices remain volatile, will we see energy-intensive users begin to relocate outside the UK? The feasibility of electrifying UK manufacturing is still under debate, and with the national grid already strained, there are concerns around capacity and resilience.

In practice, this isn’t always feasible. Covenant strength and location often outweigh ESG considerations, particularly in more challenging markets. But there may be other ways to manage the risk. One option is to price it in, charging a rental premium for high-energy users to reflect that risk.

This may already be happening in some sub-sectors and how they navigate the environmental impact of their building. Data centres, for example, are increasingly locating near renewable power sources, co-locating with greenhouses, or building in microgrids and SMRs (small modular reactors) to offset their load.

Measuring energy use is no longer optional - it’s essential for regulatory compliance and for achieving certifications, especially as BREEAM Version 7 has introduced an energy section. Fund managers must monitor energy intensity to comply with regulations such as the Corporate Sustainability Reporting Directive (CSRD) - despite a slight delay introduced by the 2025 Omnibus Directive - and the Sustainable Finance Disclosure Regulation (SFDR), particularly for Article 8 and 9 funds.

For those pursuing net zero through frameworks like the Science Based Targets initiative (SBTi), accurate consumption data is equally critical. Without it, emissions cannot be quantified, nor can progress toward climate goals be demonstrated. For investors, reliable energy data is now a baseline expectation during due diligence. Fund managers depend on this data to calculate fund-level metrics, such as financed energy intensity, aligned with the EU Taxonomy.

DTRE has observed that lenders and institutions are already starting to reward strong energy performance. In some cases, preferential loan terms are being offered for assets with sustainable credentials or clearly defined brown-to-green strategies. Meanwhile, consumption data is beginning to feature in red book valuations, signalling its growing importance in how assets are assessed, though the precise impact on valuations is still emerging. 

The good news is that the market is moving. According to government data on industrial EPCs, the amount of A and A+ rated buildings has increased significantly in just five years, from 7% in 2019 to 72% in 2024. It shows that the sector is responding, even without a firm deadline in place.

Net zero isn't a label, it's a lived reality. Buildings must prove their performance, not just promise it. That means tracking, managing, and reducing real-world energy use in partnership with tenants. 

Consumption data is a board-level issue that is central to regulatory compliance, investment strategy and long-term asset value. 

Particularly as capital gets more selective, the message is clear: operational performance is the new sustainability benchmark. The era of design-stage box ticking is over. Those who fail to adapt won't just fall behind; they risk being left out of the market entirely. 

EPCs to Emissions: 
Will carbon benchmarks 
drive high consumers offshore?

EPCs to Emissions: Will carbon benchmarks drive high consumers offshore?

DTRE’s roundtable brought together sustainability leaders from across the industrial, logistics, and life sciences sectors – including occupiers, investors, developers, and advisers – representing a strong cross-section of the industry.

The conversation centred on one critical theme: power — who has it, who needs it and what comes next. Below, we share the latest, headline thinking from that group of industry thought leaders on a topic that is increasingly coming to define the future of the sector.

The electrification of logistics is accelerating and adequate power is considered fundamental for best-in-class developments. While solutions are starting to emerge, participants voiced a shared unease about the UK’s long-term energy outlook and existing infrastructure provision.

Some occupiers we heard from now require a minimum of 40% PV provision and options to expand. Yet the limitations of rooftop PV and battery systems, especially for occupiers operating 24/7 or managing large fleet, were barriers that were widely acknowledged. 

The manufacturing of PV panels is also highly toxic, and 80% of the world’s panels are produced in China. Using European manufacturers could significantly reduce embodied carbon emissions due to lower transport requirements and more environmentally conscious production methods.

Flexibility to upgrade power infrastructure is what makes buildings best-in-class, as some urgently seek enhanced power supply options even if their current needs don’t require it. This highlights the importance of future-proofing developments and early planning.

Attendees pointed to several innovations with the potential to solve the challenges set out above and to meet the industry’s broader sustainability ambitions.

Microgrids are increasingly recognised for their ability to provide resilient backup power. As questions continue to arise about the grid’s reliability, demand will rise. However, high costs and liability issues remain a barrier to adoption.

Nuclear and new renewable energy sources could also soon offer a stable solution to the UK’s energy crisis. SMR technology is expected to be operational in the UK before 2030, while Xlinks, a wind and solar farm in Morocco, will one day supply 11.5GW of clean energy to the UK. 

In the nearer-term, battery swapping for vans offers significant potential to eliminate long downtimes – a critical concern in today’s industry. Similarly, advanced EV charging infrastructure, including cooled-cable systems, promise faster charging to meet the needs of heavy logistics.

Finally, there is a growing push for a multi-fuel model, with improved understanding of battery-electric, hydrogen and other options seen as key to unlocking decarbonisation in transport and logistics.

More than technological innovation will be required to overcome the challenges discussed above. Even as sustainability ambitions rise, attendees pointed to significant internal and external challenges to meeting them.

Occupiers’ sustainability motivations vary. Sustainability has become a more contentious topic in recent months, leading to significant variation in approaches within the industry. Bringing everyone along on the journey will require solutions that can also stand on their economic merits, not just their sustainability credentials.

Tenant-landlord collaboration is therefore a key component in decarbonisation efforts, particularly with regard to heat pump installation or BMS integration. As levels of occupier engagement vary, it will remain critically important to demonstrate how such changes stand to benefit all involved.

For all parties, willingness to innovate must define the coming years. With such an array of exciting and disruptive new technologies coming over the horizon, we must all be prepared to embrace them at speed and at scale.

DTRE’s Sustainability
Roundtable

DTRE’s Sustainability Roundtable

2024 was a transformative year for sustainability.

The introduction of Biodiversity Net Gain, the launch of the first agreed methodology for net zero buildings under the UK Net Zero Carbon Buildings Standard, and the pre-release of BREEAM New Construction Version 7, slated for formal launch in Q1 2025. 

There were also significant revisions to the Energy Performance of Buildings Directive, together with potentially transformative elections in the UK, US and elsewhere.

Our full report explores the key sustainability trends that shaped industrial and logistics transactions in 2024 and offers predictions for what lies ahead in 2025. A full copy is available on request but you can find our headlines below.

Sustainability within real estate begins with addressing effective operational 

 emerges from improved asset quality, and our data analysis demonstrates a strong correlation between 

 and rent achieved. When these elements align successfully, they contribute to a favourable 

DTRE’s 5Cs of Sustainability

This report provides a comprehensive analysis of the relationship between sustainability credentials, rental growth, and investment value within the industrial and logistics market. By examining data from 133 million sq. ft. of leasing transactions, conducting a solar survey with 20 companies, and engaging 125 participants across 80 firms in a sustainability survey, we uncover key insights into how sustainable practices impact asset performance. 

The findings reveal that properties with strong sustainability credentials not only attract higher rents but also deliver greater investment value and resilience in the market. This report serves as an essential guide for investors and developers, offering practical tips and insights into ways investors and developers can capitalise on the evolving landscape.

Investors are becoming sustainable investment intelligent, with 74% considering ESG in every transaction and 56% costing decarbonisation pathways during acquisitions. 

Despite no legislative pressure, the market is targeting Green+ refurbishments driven by perceived rent and yield premiums.

The rental premium between EPC A and B is widening, but there is no premium for EPC A+.

The rise of green capital is not only targeting prime assets, offering a yield improvement of 10-25 bps but also paying a premium for assets that have a clear decarbonisation strategy.

Net zero pressures have redefined the transaction process, 70% of purchasers are requesting consumption data during transaction due diligence. 

Power is the biggest challenge to the industry, 59% of developers have abandoned an acquisition due to power concerns.

Flood has been identified by 83% as the greatest physical risk but climate-related risks are not considered a priority.

The Industrial & Logistics Sustainability Handbook

The election was certainly one to remember. The Tories achieved the fewest number of seats in their recent history and Labour’s vote share was the lowest ever to have secured a majority. Backed by just a third of the electorate, but labelled a landslide nonetheless.

’ manifesto to see what this all means for the real estate sector and the sustainability agenda at large. Starmer has vowed to change Britain, but are his promises achievable? 

The manifesto pledged the introduction of an Energy Independence Act, aiming to achieve a zero carbon electricity system by 2030. This week, the King’s Speech referred to the ‘Global Climate Challenge’ and our government’s desire to achieve this energy independence. 

During Q1 2024, renewable energy accounted for over 50% of total generation, contributing more than gas for the second consecutive quarter. However, to reach Labour’s ambitious target, there is a long way to go. Installed renewable energy capacity was 49 GW in Q1 2024 and Labour are looking to grow this to 150 GW by 2030. 

To achieve these targets, renewable capacity in the UK will need to grow by 21% annually to 2030 – far higher than in recent years. If Labour do accomplish this, it will be a remarkable achievement: the fastest growing grid decarbonisation in Europe.

UK renewable growth in the past six years and projected for the next six years:

The UK has a huge solar opportunity yet is falling behind neighbours like the Netherlands and Germany where financial benefits for installing PV is encouraging major growth. Unchecked, this gap is likely to grow as the European Energy Performance of Buildings Directive (EPBD) continues to boost solar capacity across EU Member States. 

The UK has the second largest offshore wind capacity in the world, representing 40% of the European total, with offshore wind output of 49TWh saving the equivalent of 18.5m tonnes of CO2 emissions last year alone.

The new government has promised to improve the planning process for infrastructure projects to progress pipeline projects. Greener energy means greener real estate, and businesses in the sector would welcome a helping hand in achieving their own net zero ambitions.

Ed Miliband has returned to Cabinet as energy secretary having held a similar role from 2008 - 2010. Sources claim he ordered an immediate ban on new North Sea drilling licences but, rest assured, these are merely rumours. The government will only halt new licences for new fields. 

Restricting fossil fuel growth in the North Sea is a welcome policy from a sustainability perspective but, given the UK’s low coal supplies, this may leave us vulnerable in cold winters. To accompany this policy, the government has also agreed to extend the Energy Profits Levy which will help with much needed energy rebalancing. 

The UK is the first major economy to more than half their output: reducing CO2 by 53% between 1990 and 2023. At a reduction of 428 MtCO2e, it’s more than the emissions reductions of the US, Canada, France, Italy and Japan combined.

However, the UK is only halfway to achieving its 2050 net-zero target. Just yesterday, the UK’s Climate Change Committee 

 that the UK’s targets were at risk, urging the new government to rollback Conservative green energy reversals “as a matter of urgency”. With policy pending, what will future forecasts really look like?

The manifesto also refers to the UK becoming ‘the green finance capital of the world’, naming institutional investors and encouraging FTSE 100 businesses to implement net zero plans. We’ve already seen the emergence of Impact Funds in the UK real estate market, aiming to make beneficial social or environmental change alongside returns. 

We expect this ESG-related pool of capital to grow significantly and the market to become increasingly sustainable investment intelligent. Costed decarbonisation strategies are already creeping into transactions, in part to safeguard assets from evolving EU legislation. We expect the UK regulation horizon to align with European (CSRD) or international regulations (ISSB).

For the logistics sector, the National Grid is the single biggest 

. Labour dedicated a section of its manifesto to address this and the King’s Speech reinforced its importance by referring to the creation of Great British Energy (GBE): a new, publicly-owned clean energy generation company that will co-invest alongside private capital. 

GBE will partner with energy companies, local authorities and cooperatives to develop up to 8GWs of cheaper, cleaner power by 2030, and upgrade infrastructure. While we commend Labour for being the only party brave enough to mention the grid, their methodology so far is unclear. 

It’s surprising that we have no further clarity on EPC deadlines. Labour has reversed the decision to waiver MEES for privately rented residential properties but seem to have forgotten commercial assets. For commercial property, this makes long-term planning and budgeting challenging and could lead to a retrofit rush when (or if) MEES deadlines become legislative. 

Labour has committed to restoring the 2030 ICE phase-out for cars, increasing the number of charging points, standardising battery condition information and allocating £1.5bn to new gigafactories. However, it feels like they’ve missed an opportunity in not mentioning logistics fleets, and by focusing their attention on cars rather than vans or HGVs. 

Overall, we are excited to see what the future brings. The Labour government’s sustainability targets are easily the most ambitious in Europe and would certainly bring about ‘Change’. Only time will tell whether the new government’s ambitions will come to fruition. 

Labour & Sustainability: Positive ‘Change’ for real estate, or more empty promises?

Earlier this year, the World Economic Forum released its 19th Edition of The Global Risks Report. It showed that 5 out of 10 global risks in the next 10 years are expected to be climate related (up from 2 in the next 2 years) and illustrated that it is now more important than ever to safeguard assets against climate change. 

Technological advancements and policy updates mean that sustainable solutions are constantly being developed. With this in mind, I have included our top tips to futureproof logistics assets and maximise long-term value. 

The commercial real estate market is feeling the full effects of the energy crisis, primarily with challenges connecting to the grid and the impacts of increased energy costs for consumers. Considering renewable energy sources as an alternative to gas will reduce carbon emissions and safeguard assets against energy and legislative challenges. 

One solution is installing PV panels. With a roof that is ready for solar, there are four options: rent the roof to a third-party solar provider, feed the kilowatts into the grid, use the power to supply the asset, or store the power onsite. Pairing PV panels with battery storage will ensure round the clock power and offers a solution to potential grid connectivity problems. 

Battery technology is constantly improving and, as many occupiers are looking to electrify fleets and increase automation, power is becoming a key consideration that developers will need to address.

Perhaps one of the most significant changes to warehouse building design in recent years is how the local environment is considered. The new norm suggests that buildings make a minimal impact on their surroundings and biodiversity, yet it is increasingly a concern to local planning authorities and policymakers. 

No two local environments are the same. The Environmental Impact Assessment (EIA) is a useful tool for helping to navigate environmental needs and to assess the impact of a development project. By improving local biodiversity, there is an opportunity to accelerate planning processes and improve your license to operate.

Data is king! Any landlords, tenants, asset managers or developers reading this will have experienced the headache of data collection, particularly when it comes to resource consumption. It’s not an easy process. 

As it stands, occupiers are not incentivised to provide consumption data and, in some cases, it simply isn’t available. With the technological advancements of smart meters and the growing popularity of green leases, data management is improving. However, many are still sceptical about the accuracy of the data and often the information received is highly technical and challenging to interpret. 

Consumption data is fundamental for understanding the energy performance of an asset and managing portfolio risks. A reputable collection system, providing accurate data, will help comply with regulations, influence asset management decisions and reduce a building’s carbon footprint.

Asset electrification is necessary not only to achieve Net Zero and decarbonise assets, but also to comply with imminent UK and EU regulations. The Energy Performance of Buildings Directive (EPBD) aims to phase out all fossil fuel heating by 2040, and for new buildings by 2030 (2028 in Germany). We expect clearer guidance from the UK Green Building Council's forthcoming 

, which is due to be published later this year, but both will provide asset-level performance requirements covering embodied carbon, operational energy, and several other Net Zero Carbon related metrics. 

Installing zero-emissions electric heat pumps instead of natural gas-powered climate control systems in warehouse units will not only ensure the building is compliant, but it is necessary for achieving prime rents, EPC accreditations and maximal long-term asset value.

To achieve Net Zero emissions and decarbonise the sector by 2050, embodied carbon needs to be reduced by 40% before 2030. The 

 suggests ‘buildings are currently responsible for 39% of global energy related carbon emissions: 28% from operational emissions… and the remaining 11% from materials and construction’. It is, therefore, no surprise that companies are endeavouring to find more sustainable alternatives to traditional build design and materials. 

The use of modern materials and construction techniques is expected to increase the life of a logistics asset from circa 25 years to 50+ years and dramatically reduce carbon emitted into the atmosphere. This can be achieved by using easily separable structures which can be replaced, materials that have a longer technical service life, reused or recycled materials, or materials that naturally absorb CO2. Modern technology makes new construction simple. 

There are many sustainable building certifications which provide a useful foundation for measuring sustainability. However, questions have been raised about their relevance for warehouse assets, with growing dissatisfaction around cost and the lack of correlation between certification and a building’s energy performance. These concerns are driving a shift away from current certifications in the wider real estate market, but they will no doubt be replaced by something else.

There is growing evidence, particularly in the UK, that higher EPC ratings achieve higher rents, shorter void periods and attract superior tenants. Today, MEES regulations require all non-domestic buildings within the UK to achieve an EPC rating of at least an ‘E’. Proposed legislation suggests that, from April 2027, all non-domestic buildings must achieve an EPC rating of at least a ‘C’, and a ‘B’ rating from April 2030. 

EU regulations are a little more ambiguous. The EPBD requires renovation of the 16% worst performing assets to be renovated by 2030 and the worst 26% by 2033. Member states will impose country specific legislation, and we will know more by the end of 2025 when we expect to see the same rental premium evidence emerge for assets with high EPC ratings across Europe.

The extent of the ‘green premium’ within real estate is a debate that rumbles on, with few brave enough to quantify it. However, as the 

 aims to limit global warming to 1.5°, time is running out. Legislation within the UK and EU represents this urgency and assets are at risk of stranding – sustainability considerations have become a necessity. 

Not only does a greener building potentially present a rent and yield premium maximising investor returns, but it will extend the asset life by reducing stranding and compliance risk, therefore futureproofing the investment.