In order to compare the greenhouse gas emissions of issuers and properties, differences between the issuers and the properties must be taken into account. This means that greenhouse gas emissions must 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:
Carbon intensity government
Nominal GDP [USD million]
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.
Carbon intensity corporate
Sales [USD million]
The definition of carbon intensity for real estate applied by Swiss Life comprises greenhouse gas emissions resulting from the energy consumption to operate the properties. In principle, greenhouse gas emissions are based on consumption values and emission factors that correspond to the methodological principles of the GHG Protocol Corporate Standard.
Fluctuations in consumption values can arise based on the characteristics of properties, for example due to temporary vacancies (e.g. as a result of renovation or repurposing). The manual entry of consumption values for properties in Switzerland results in a time shift. For the directly held PAM real estate portfolio, consumption values are read off by automatic meter systems or obtained from ancillary cost statements.
For some properties the data (excluding tenant electricity) is lacking or incomplete. The data for these properties is complemented by estimates. This approach ensures that the overall performance of the portfolio is presented more appropriately. The properties in Germany had to be excluded owing to insufficient data quality and are therefore not taken into account by the calculation of the carbon intensity of the directly held PAM real estate portfolio. In addition, Swiss Life estimates the greenhouse gas emissions resulting from tenant electricity for a large proportion of its properties. 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 properties 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. The definition of gross floor area is as specified in the Carbon Risk Real Estate Monitor (CRREM) and the Global Real Estate Sustainability Benchmark (GRESB).
Carbon intensity real estate
Floor area [m2]