ESG SDDS Wiring-Guide

"Estimated operational energy consumption for the proportion of portfolio that is in landlord’s control. In the absence of actual data, energy use can be estimated based on building characteristics and publicly available data using commercial databases - see PCAF, and/or linear extrapolation could be applied - see CRREM (ref: GRESB)."
 

"Estimation should only be applied where actual consumption data cannot be obtained. Report the estimated operational energy consumption within landlord-controlled areas (see ESG3.1 for control type classification), expressed in kilowatt hours (kWh).

Recognised estimation methods include those consistent with the PCAF and CRREM frameworks:

PCAF-Based Estimation
The Partnership for Carbon Accounting Financials (PCAF) provides a tiered framework for estimating operational energy consumption and associated emissions, based on data availability. In practice, scores 3, 4 and 5 are most relevant for real estate estimation:
    •  Energy label and floor area - If the building has a certified energy label, estimated consumption is calculated as:
Energy consumption (kWh) = Energy Use Intensity (kWh/m²/year) × Floor Area (m²)
    •  Statistical benchmarks per m² - Where no energy label is available but building type, location, and floor area are known:
Energy consumption (kWh) = Benchmark Use Intensity (kWh/m²/year) × Floor Area (m²)
    •  Statistical benchmarks per building - If floor area data is unavailable, but building type and location are known:
Energy consumption (kWh) = Benchmark per Building (kWh/building/year) × Number of Buildings"

CRREM-Based Estimation
The Carbon Risk Real Estate Monitor (CRREM) methodology supports estimation via linear extrapolation, particularly useful when partial-year actual consumption data is available. It assumes a constant rate of energy use over time, and a linear relationship between consumption and floor area. The CRREM tool projects the observed energy use across a 12-month period, aligning estimated values with decarbonisation pathways.

Illustrative example: A retail building has 9 months of actual energy data (450 MWh). Using linear extrapolation, the annual estimated consumption is calculated as: Annual consumption = (450 MWh ÷ 9 months) × 12 months = 600 MWh (600,000 kWh).

Note 1: In line with GRESB, estimated data should not exceed 20% of the portfolio’s total reported energy consumption coverage.
Note 2: The ESG SDDS does not prescribe a fixed reporting frequency. Data may be collected and reported annually or quarterly, depending on manager and investor practices. Quarterly data provides faster insight (e.g. for SFDR or interim steering) but may face challenges such as incomplete invoices, tenant privacy restrictions, or the need for interim estimations.
Note 3: Clearly document the estimation method, data sources, and assumptions to ensure transparency and comparability over time.