Carbon intensity

In order to compare greenhouse gas emissions among issuers and real estate, differences between issuers and real estate assets have to be taken into account, i.e. greenhouse gas emissions have to be normalised. For countries, companies and real estate, one approach is to consider greenhouse gas emissions in relation to a country’s nominal GDP, a company’s sales and a real estate asset’s floor area, respectively. The resulting metric is called carbon intensity.

MSCI ESG Research LLC defines the carbon intensity for countries regarding production-based greenhouse gas emissions as follows. These include greenhouse gases as defined by the GHG Protocol Corporate Standard.

MSCI ESG Research LLC defines the carbon intensity for companies regarding Scope 1 and 2 emissions as follows. These include greenhouse gases as defined by the GHG Protocol Corporate Standard.

The definition of the carbon intensity for real estate applied by Swiss Life comprises greenhouse gas emissions resulting from the energy consumption to operate the real estate assets. In principle, greenhouse gas emissions are based on consumption data and emission factors that correspond with the methodological principles of the GHG Protocol Corporate Standard.

Fluctuations in consumption data can arise based on real estate characteristics, for example due to temporary vacancies (e.g. renovations or conversions). The manual entry of consumption data for real estate in Switzerland results in a time lag. In order to take due account of these interrelated factors, Swiss Life considers consumption data for real estate in Switzerland for the past three years and calculates the annual average values on that basis. For the remaining directly owned PAM real estate portfolio, consumption data is read via automatic metering systems, so that calculation of an average value is dispensed with or the real estate assets are excluded from the analysis.

There is no or only incomplete data (excluding tenant electricity) for some real estate assets. These assets are excluded from the calculation. As a result, the real estate in Germany, for example, is not included. In addition, Swiss Life estimates the greenhouse gas emissions resulting from tenant electricity for a large proportion of its real estate assets. Swiss Life in Switzerland bases its assessment on estimates provided by the Swiss Society of Engineers and Architects (SIA). For the remaining directly owned PAM real estate portfolio, tenant electricity data is available or the real estate assets are excluded from the analysis.

Swiss Life aligns the normalisation of the greenhouse gas emissions (calculation of carbon intensity) of real estate with the scenario assumptions of the Carbon Risk Real Estate Monitor (CRREM) tool and uses the floor area for this purpose.