Understanding Commercial Real Estate (Equity and Debt) asset type and how to use it

Learn about the methodology used to calculate financed emissions for the Commercial Real Estate (CRE) asset type used on Pathzero Navigator.

Covered in this article:

How does Pathzero define the Commercial Real Estate asset type? 
How to choose the correct building type
Calculating financed emissions from CRE
Limitations and workarounds 

How does Pathzero define the Commercial Real Estate asset type? 

Pathzero follows the Partnership for Carbon Accounting Financials (PCAF) definition of the Commercial Real Estate (CRE) asset type. This applies to loans or equity investments in a building, or group of buildings, allocated to commercial purposes and generating income for the investor. 

The building(s) may be fully or partially owned by the asset owner, or it may be that the building is a joint venture, joint operation, or under joint ownership. 

Note that CRE investments listed on the stock market and loans intended for general corporate purposes should be included in corresponding asset classes (i.e. listed equity or private debt). 

How to choose the correct building type

Please consult the detailed descriptions below of building types included in Pathzero Navigator as a guide. When selecting the building type, use the building type that is most relevant to the asset. 

When the building type is considered ‘mixed-use’, select a building type listed below that represents the greatest proportion of the building area. Or, split the building floor area into different building types as if it was a group of buildings instead of a single building.

If the building type is not available in the list below, choose the building type that is likely to best represent the building's overall energy usage profile – recognising that this may be an approximation.  


Building type 


Retail - High street 


Retail properties located on the high street, such as terraced properties located in the city centre or other high-traffic pedestrian zones. 

Retail - Shopping centre 


Enclosed centre for retail purposes consisting of multiple retail stores connected with internal walkways. 

Retail - Strip mall 


Unenclosed retail space, such as strip centre or strip mall, where buildings are usually stand-alone and situated side-by-side with their entrance facing a main street or carpark. 



Office properties including free-standing offices, office terraces, unattributed office buildings and office parks. 

Industrial distribution warehouse 


Unenclosed industrial properties, such as large halls in the outskirts, used for the purpose of storing, processing, and distribution of goods. 


Accommodation properties including hotels, motels, youth hostels, lodging, and resorts. 



Properties used for primary healthcare, such as hospitals, clinics, physical therapy centres, mental health centres, rehabilitation or restorative care centres. 

Leisure and sport facilities 


Properties used for leisure and sports, such as sports club houses, gyms, sports stadia, indoor sports arenas, halls, swimming pools, theatre and auditoria. 

Multi-family rentals 


Residential properties that house multiple families in a single building or complex. Properties include apartment buildings, townhouses and co-ops. 

If you require assistance in choosing the correct building type, please send us the building information of your assets at support@pathzero.com and Pathzero’s sustainability consultants will recommend a building type for you.

Calculating financed emissions from CRE

Limited data on actual building energy use is the main challenge in calculating financed emissions from CRE assets.  

However, data limitations should not deter financial institutions from starting their greenhouse gas accounting journeys for this asset type. 

There are two key steps in calculating financed emissions from CRE: 

  1. Calculate or estimate the annual emissions from the building’s energy use and refrigerants, including tenancies. 
  2. Attribute the building's annual emissions to the financial instrument based on the ratio between (a) outstanding loan or investment amount and (b) the property value at the time of loan or equity origination. 

PCAF provides guidance on the data required to calculate annual emissions from the building, scored from 1-5 based on data quality.  

PCAF data quality scores 1 and 2, following the Greenhouse Gas Protocol, calculate the emissions through actual building energy consumption reported.  

To calculate these emissions, please contact Pathzero for a subscription to Pathzero Clarity, Pathzero’s solution for detailed emissions calculation. Emissions associated with building construction or scope 3 associated with non-energy sources (e.g., waste) are not required to be included. 

PCAF data quality score 3 estimates building energy use using building energy labels, and the floor area of the building. Pathzero is continually working to expand the scope of the energy labels available. Energy Performance Certificates in Europe and NABERs star ratings in Australia will be made available shortly. 

PCAF data quality score 4 estimates building energy consumption using average energy consumption intensity values for the building types in their specific country / region, and the floor area of the building. 

PCAF data quality score 5 estimates building energy use using average energy use intensity values for the building types in their specific country / region, and the number of buildings. 

Beginning with emissions reporting in line with PCAF 3, 4 or 5 data quality scores is the best first step for financial institutions to identify emission-intensive hotspots in their CRE portfolios. 

Note that PCAF only requires consideration of building energy use and refrigerants. Building embodied energy or scope 3 associated with non-energy sources (e.g., wastewater, maintenance) are not included. This is different from other asset classes. Tenants’ energy use is included. 

Limitations and workarounds 

There may be limitations in calculating emissions in line with PCAF scores 3, 4 and 5 due to requirements of using regional or global average energy use intensity estimates, where country-specific estimates do not exist. 

With regards to financial data, property value at loan or equity origination may not always be readily available. When financial institutions do not have the property value at origination, they should use the latest property value available and fix this value for the following years of greenhouse gas accounting.  

If you need more help, please contact us at support@pathzero.com.