Managing Compliance and CRREM: How To Balance Two Big Challenges In Real Estate Sustainability

Staying compliant with ever-evolving regulations and understanding complicated frameworks like CRREM, can feel like enough to manage for real estate sustainability professionals. These are important areas to be on top of, so below, our team at MapMortar have outlined three practical strategies to help you transform these challenges into opportunities.

How to Navigate Regulatory Compliance

Achieving compliance goes beyond mere box-checking—it demands substantial investment in building improvements, data handling, and more. The cost of staying compliant can rise quickly, but the risks of falling behind are even more significant. These include:

• High costs from detailed reporting obligations

• Legal risks due to climate litigation or accusations of greenwashing

• Fines or tax penalties for not meeting emissions targets or building codes

• Reduction in subsidies for high-carbon technologies

• Risks related to inadequate disclosure practices

• Additional costs required to align your portfolio with national regulations

However, compliance isn’t just about avoiding penalties—it can also enhance your property’s overall value, draw in high-quality tenants, and streamline operations. Compliance is a strong indicator of trust and transparency, which resonates well with stakeholders.

Here are 3 ways you can manage this effectively:  

1. Identify inefficiencies and measure your performance against the most recent standards through conducting regular energy audits.  

2. Retrofit your properties with energy-saving technologies like LED lighting, smart HVAC systems, and renewable energy sources.

3. Use a Building Management System (BMS) to track energy use and ensure compliance. While the initial investment can be substantial, the long-term benefits make it a worthwhile endeavor.

Make The CRREM Framework Work For you

The Carbon Risk Real Estate Monitor (CRREM) focuses on reducing carbon emissions in the real estate sector. It’s a valuable tool for investors and lenders, allowing them to assess their portfolios in various ways, from aligning with Paris Agreement targets to identifying assets at risk of becoming stranded.

That said, mastering CRREM can be challenging. Data collection, ensuring data accuracy, and the upfront costs of retrofitting can seem overwhelming.

Nonetheless, CRREM can be a game-changer.  

It offers protection against future regulatory shifts, increases market competitiveness, and provides long-term cost savings.

Here are 3 steps to managing CRREM:  

1. Invest in systems that can collect precise, real-time data to help you manage sustainability performance effectively.

2. Explore financing alternatives, such as green bonds, energy performance contracts, or government incentives to distribute the costs of improvements.

3. Stay informed on regulatory updates through collaborating with sustainability consultants to ensure your strategies remain aligned with current regulations.

Additionally, engaging tenants in sustainability initiatives, such as green leases, can foster a cooperative approach to energy efficiency, aligning their goals with yours.

Opportunity Awaits For Your Real Estate

While the journey toward sustainability can be daunting, with the right approach, it can also lead to significant benefits. These include enhancing property value, attracting top-tier tenants, optimizing operations, and laying a strong foundation for the long-term success of both your portfolio and business.

By staying proactive, investing in cutting-edge technologies, and keeping up with regulatory changes, your real estate portfolio won’t just survive the shifting market—it will thrive.