ESG SDDS Wiring-Guide

Weighted average of the stranded/misaligned year is based on energy intensity of all assets in the portfolio (e.g. using CRREM pathways).
 

"This indicator aims to calculate the average year in which assets in the portfolio are expected to exceed relevant decarbonisation pathway thresholds for energy intensity, weighted by their relative share in the portfolio.

Investment managers may reference pathways such as CRREM or national sectoral targets, and apply weighting factors such as market value, net lettable area, or other relevant metrics. The approach typically involves determining each asset’s projected 'stranded/misaligned year' based on its energy performance against the chosen pathway and combining these figures into a portfolio-level average.

This indicator is one of the six environmental factors considered most relevant for underwriting (see INREV (2025) Integrating environmental considerations in real estate underwriting paper).

Note 1: This indicator does not include financial data. It refers exclusively to energy performance against decarbonisation pathways (e.g. CRREM).
Note 2: Later stranded years (e.g. beyond 2035/2040) are generally positive, as they show portfolio alignment with long-term decarbonisation goals. Earlier stranded years (e.g. before 2030) are concerning, as they indicate urgent retrofit needs and heightened transition risk.
Note 3: In line with ARESI KPI 10 and CRREM pathways, stranded year calculations should be based on EUI (kWh/m²/year) using GIA/IPMS 2 as denominator, and adjusted for coverage gaps. Disclose assumptions, data sources, and methodology applied.

Note that in market practice, the term 'Misaligned year' is increasingly used instead of 'Stranded year' to describe the first year an asset no longer aligns with the relevant decarbonisation pathway. For consistency with CRREM, the terms may be considered equivalent. CRREM initiatives refers to the term ‘Stranded asset’ or ‘Stranding year’ with regard to the non-compliance of assets related to the respective decarbonization pathway. ‘Stranding’ does not mean a property gets worthless."