• Maximize resource efficiency
• Increase renewable energy
• Electrify operations for building systems and vehicles
• Decarbonize the supply chain

It has already taken steps to monitor emissions and to implement solutions. These include implementing financial-grade GHG emissions accounting. It also invested in strategic partnerships with Deepki, a sustainability data intelligence platform for real estate, Emitwise, a carbon accounting software provider, and Climate X, a risk analysis platform. And in October it acquired NRG Energy’s brokerage and advisory group focused on renewable energy transactions.

As defined by the EPA, “A climate transition plan is an action plan where an organization describes its strategy to transition all its processes, operations, and business modes to meet its public commitments within a specified timeframe.”

Its essential components include near-term and long-term GHG emission reduction targets; strategies to achieve those targets in a given time frame; a plan to engage with its value chain and other stakeholders to outline the next steps; and a scenario analysis that identifies climate risks and opportunities. Accountability mechanisms and quantifiable performance indicators are also required.

In addition, the transition plan must describe the supporting financial plans to implement the strategy. Moreover, companies must report how climate considerations are integrated into capital allocation and financing decisions, among other factors.

According to the EPA, the first step in developing the transition plan is to develop a complete Scope 1,2 and 3 inventory. Scope 1 is direct GHG emissions that occur from sources that are controlled or owned by an organization, such as those from fuel combustion. Scope 2 is indirect GHG emissions associated with the purchase of electricity, steam, heat or cooling.

Using a 2019 baseline, CBRE has set a target for 2030 of reducing Scope 1 and 2 emissions from its own operations by 50%, and emissions per square foot from client-owned properties and facilities that it manages by 55%. It claims to have already reduced all three categories of emissions by 18%.

Scope 3 (value chain) is the result of activities from assets not owned or controlled by a company, but that indirectly affect either its upstream or downstream activities. “The organization may be able to influence its suppliers or choose which vendors to contract with based on their practices,” the EPA website states.

“We know that progress will not be linear and sustained progress will become increasingly complex,” CBRE acknowledged.

In October, Intercontinental Exchange (ICE) initiated a new climate transition risk solution to meet the needs of underserved segments of fixed income, including municipals, securitized mortgage-backed securities and real estate. The solution aims to provide emissions estimates and portfolio analytics across various fixed-income asset classes for Scope 1, 2 and 3 emissions.

“We have applied physics-based simulations with building energy models and ICE’s data to provide emissions insights for RMBS and CMBS,” said Larry Lawrence, Head of ICE Climate. “Mortgages and mortgage securities can represent more than 20 percent of bank balance sheets, leading to a growing need for data to help meet regulatory disclosure and support stress testing to inform decision-making.”

Even if a company is not driven to implement a transition plan because it cares about the climate, those that operate globally may be forced to by international sustainability reporting requirements. According to the June 2024 report of CDP, a global non-profit that operates the world’s environmental disclosure system, more than one in four companies that report to it has a plan in place and 36% intend to develop one in the next two years. However, only 2% of companies that reported having a plan are meeting all the disclosure requirements, with the fossil fuel industry performing worst.