Unfit for stranding assessment: a panel-scale multimodal-LLM audit of building-decarbonisation disclosure (BeDA)

2026-07-24

AI Summary

This study addresses the lack of large-scale empirical evidence on whether current building decarbonization disclosures are sufficient to support asset stranding risk assessments aligned with science-based climate targets. To this end, we propose BeDA, a multimodal large language model tool that enables automated, scalable auditing of building-related carbon disclosures across a global panel of 2,246 firms from 2003 to 2023. BeDA evaluates whether firms report operational carbon intensity on a per-square-meter basis and constructs a standardized compliance scoring framework. Our findings reveal that only 21.5% of building-related firms and 45.5% of real estate companies disclose area-normalized carbon intensity, with European disclosure rates approximately double those in the United States. Notably, 39% of real estate firms for which intensity metrics could be computed already exceed the carbon intensity thresholds consistent with a 1.5°C pathway, highlighting significant regional disparities and climate risk exposure.

Abstract

Buildings account for roughly 34% of global final energy use and 37% of energy- and process-related CO$_2$ emissions. Stranding regulation now being enacted (New York City Local Law 97, the EU Energy Performance of Buildings Directive recast) presupposes that a building portfolio's carbon intensity can be measured per square metre and compared against a science-based pathway. Whether corporate disclosure is actually fit for that comparison has not, to our knowledge, been measured at scale. We introduce BeDA (the Built-environment Decarbonisation-disclosure Auditor), a multimodal large-language-model instrument, and apply it to a global firm panel (2,246 firms, 2003-2023). Its standards-compliance score is reliable across models and model families and convergent with three independent external criteria. Most disclosure is unfit: only about one built-environment firm-report in five discloses operational carbon intensity per $m^2$ (21.5% in a region-stratified sample of 200 firm-reports, Wilson 95% CI [16.4%, 27.7%], inter-extractor $κ$=0.95; 45.5% across 519 real-estate firm-reports, $κ$=0.97). The rate is roughly twice as high in Europe as in the United States (64-74% versus 37% for listed real estate). Among the 215 real-estate firm-reports for which an intensity can be constructed, 39% already exceed the Carbon Risk Real Estate Monitor (CRREM) 1.5 °C pathway's intensity limit. Credibility does not predict stranding readiness once portfolio size is controlled; this is a screening tool, not a forecast. The main obstacle to enforceable building-stranding regulation is therefore a measurable, jurisdiction-specific reporting gap, one that a targeted disclosure mandate can close and that BeDA can monitor.

Problem

• building decarbonisation
• stranding risk
• carbon disclosure
• reporting gap
• climate regulation

Innovation

• multimodal LLM
• building decarbonisation
• disclosure audit
• carbon intensity
• stranded assets