News and views
15-12-2021
Net Zero Carbon
With COP26 just finished and the world firmly focusing on the need to reduce CO2 emissions immediately and aim for carbon neutrality by 2050, we know that now is the time to help you achieve that with the funds and assets you’re responsible for. To help you do this, we created a new Net Zero Carbon feature in SIERA.
What does it do?
The Net Zero Carbon feature in SIERA allows you to see the CO2 emissions of a fund, group of assets, or a single asset. It enables you to use a list of yearly targets to plot a pathway to reducing emissions for each to zero by 2050.
It also enables you to compare the reductions of CO2 usage against science-based targets and market benchmarks and see the effect grid carbonisation and renewable energy sources have on the data.
This means you can use the data to input into graphs in the feature to plot a course of action that will lead the fund or asset to a carbon neutral 2050. In addition to this, the data graphs will also give you other key information, such as at what point an asset becomes stranded due to its carbon emissions. This helps to identify outliers in the portfolio and inform financial and investment decisions to reduce potential stranding risks as part of asset business planning and ensures appropriate ESG decisions are made within the investment lifecycle to preserve asset value.
Grid decarbonisation and renewables
SIERA focuses on differentiating between energy types and so allows you to split out onsite renewable energy, from green tariffs or from grid energy. This means you can also see how grid decarbonisation will affect your carbon reductions. And what impacts renewable energies are having on the asset’s performance. SIERA uses data from the Carbon Risk Real Estate Monitor, aka CRREM tool, to show how forecasted changes to the energy sources of a national grid will affect assets’ ability to decarbonise.
CRREM of the crop for decarbonisation
The EU’s Carbon Risk Real Estate Monitor project has designed the CRREM Risk Assessment Tool. As CRREM’s website states, “CRREM will provide the industry with appropriate science-based carbon reduction pathways at building, portfolio and company level and with financial risk assessment tools to cost-effectively manage carbon mitigation strategies.” SIERA uses CRREM data to allow us to see the science-based targets alongside real asset data, and include the effect of grid decarbonisation on assets.
How will it help me?
Even if you’re not currently working with an asset or fund that’s tracking carbon emissions in the near future, you will be. There’s been a significant shift towards achieving a reduction in carbon emissions by 2030 and carbon neutrality by 2050. To meet these targets and to achieve the zero-carbon goal, significantly more incentives, and legislative and governmental attention will be paid to businesses of all types over the coming years. And that will include any businesses that own, manage, or administer buildings that release carbon and use energy due to the need to improve carbon efficiency in standing building stock.
Investor pressure and regulatory changes mean there’ll be an increasing responsibility to manage all this. It’s important to have an understanding of asset performance, date and timeline for when improvements will be done to the asset.
The Net Zero Carbon feature in SIERA will also help by giving you the knowledge and ability to cut and target specific data and forecasts with the confidence of quality data and across individual as well as fund assets.
Using SIERA’s Net Zero Carbon feature
The more data held within SIERA for an asset or fund, the better to get the most reliable and accurate forecasts, there’d be consistent data for the complete year to date, but we know that’s not always possible. So if an asset has six months of consumption, we make up the rest of the data by estimating it. This is still enough data to give you a helpful and working data set to base the findings and results on.
New features in a nutshell
The new Net Zero Carbon feature is jam-packed with tools, graphs, and data breakdowns that give you clear visuals set against timelines to know where you are, where you need to get to, and the pace of change an asset has to achieve that.
The New Target Scope helps you to know which assets have enough consumption data to be included by showing you a summary of the data availability. Twelve months is ideal but six months’ worth of data can work because SIERA can estimate the missing six.
Using the Target Pathway gives you the ability to add in various yearly targets from now to 2050 and converts these targets into a graph that shows you just what you need to do by when to prevent an asset from being ‘stranded’ and to reach net-zero by 2050.
At the ready! Asset Readiness, The UK government’s new targets for Net Zero Carbon and SIERA’s feature of Asset Readiness, helps you to quickly see why an asset is ready for net-zero or not, and crucially, if not, why that is.
Other features include hazard and physical climate risk, benchmarking against consumption data, and much more.
Wrapping up to 2050
Information is key. And knowledge is power. We know that the industry faces a considerable challenge to decarbonise for 2050. And that timeline is tight. Because everything takes time. SIERA’s Net Zero Carbon feature has been designed by industry experts who understand the challenges you’re facing. In order to make strategic choices, maintain the asset and fund’s performance and be ready to meet government legislation and requirements is a balancing act. But with SIERA you have the power to get ahead and know exactly what you need to do and when in order to decarbonise.
For more information contact us today.
