2018 has been a remarkable year for sustainable real estate and the global and local forces that drive demand for energy efficient, healthy, resilient, Sustainable buildings.
Continued climate disasters showed us a glimpse of what is to come if we do not act quickly and decisively. International and domestic experts laid out in scientific detail the grave social and financial impacts of climate change if we continue on the current path.
Not surprisingly, real estate continues to be one of the most cost-effective sectors to combat climate change. Energy efficient, healthy and resilient buildings have lower utility costs, higher occupancy and higher values. Each dollar spent to improve sustainability creates value for all stakeholders: building owners, operators, investors and occupants.
And the financial sector has discovered the serious risks of ignoring climate science, and the reputational and financial benefits of embracing it. More than 85% of the S&P500 now report ESG (Environmental, Social, Governance) performance and over 61% of major listed real estate funds report sustainability performance through GRESB.
Twenty cities and 3 states are driving energy efficiency with policies covering over 10 billion square feet of property, and two cities, Washington DC and New York City have proposed mandatory energy performance requirements for existing buildings, the first in our country.
Leading real estate organizations are pushing for deeper carbon reductions, coupling energy efficiency improvements with creative renewable energy purchases to set aggressive science-based targets. And a US real estate firm became the first in the country to announce a carbon neutral pledge.
And of course, the demand for green buildings continues to grow. Millennials, the majority of whom value sustainability over salary, will be 75% of the workforce by 2025, further expanding the demand for sustainable buildings in which to work, live, and play.
We are excited, but not surprised, to see this rapid growth in the value of sustainable buildings. This momentum will only accelerate as investors, policy-makers and tenants continue to demand more energy efficient, healthy and resilient buildings.
We are proud to be part of this exciting and important industry, working with some of the most impressive and passionate clients, peers and policy makers to improve the built environment for this generation and generations to come.
Happy Holidays and here's to an exciting 2019!
So the long-awaited Energy Star changes have finally arrived.
The commercial real estate industry was quite surprised when they woke up Aug 27th to see what had happened to their coveted Energy Star Scores. Here’s what you need to know and what you can do to try to get your scores back up.
On August 27th EPA completed their planned updates to the Energy Star scoring methodology and all scores within Energy Star Portfolio Manager (current and historic) now reflect the updated methodology. EPA said the average drop in office building scores would be 12 points, but the average drop we have seen for our large office building clients is closer to 16 and sometimes even higher.
The score changes are the result of EPA updating the data set that all buildings are compared to from 2003 data to 2012 data, and the average building has gotten more energy efficient over that time. They have also lowered the site-to-source ratio used to calculate the environmental impact of electricity used by buildings (this shift actually helped large electricity users). These updates typically occur every 5 years, but this time there was a much longer gap between updates making the impact of the change much more drastic. The updated scores now reflect a more accurate assessment of building performance across the country reflecting more modern and efficient building stock.
I’m sure this is disheartening to building owners across the country, but this is not a reflection of any changes in the operations of your buildings. And remember that this change has affected all building types (each to a different degree) across the country so the entire industry is going through the same thing.
What to do next
The next logical step is to ask how to get the scores back up again. Of course, the most direct way to increase your Energy Star Score is to reduce the amount of energy your building consumes, including landlord and tenant equipment, lighting, HVAC and plugloads.
In addition to reducing energy use, the best way to optimize your score is to make sure every aspect of a building’s Energy Star Portfolio Manager profile is accurate and up-to-date including space uses, occupant and computer counts, and operating schedules.
How CodeGreen can help
Our team of benchmarking experts and engineers will work with you to determine the best approach to help you save energy and improve your Energy Star Score. We have helped over 350 million square feet of property optimize Energy Star Scores through profile updates and energy saving ideas.
Our team of benchmarking experts get the most accurate information from your building to optimize the profile and score as much as possible.
Our engineers work with your building operations team to identify energy savings opportunities through energy audits, commissioning, smart building solutions, occupant education and more.
And if your building is no longer eligible for an Energy Star Label, we can help you achieve recognition for your energy and sustainability performance through programs such as LEED, BREEAM, WELL or Fitwel certification.
Due to the dramatic drop in scores and the response from building owners, EPA is performing an additional review of the new scoring methodology. More information on their review process can be found on their website HERE.
Call us to find out how to optimize your building’s energy performance, reduce your energy costs, and lift your Energy Star Score!
New York City has been a leader in sustainability for many years and has already passed numerous laws related to energy efficiency in existing buildings dating back to the 2009 Greener, Greater Buildings Laws. The “GGBP” included LL84 Benchmarking, LL87 Energy Audits and Retro-Commissioning and LL88 Lighting and Submetering requirements. Since these laws were passed, buildings over 50,000 square feet across the city have collectively reduced energy use by over 5% since 2010. But these laws have not moved the needle as much as the city hoped towards the ambitious 80% carbon reduction target set for 2050. So to accelerate carbon reductions in buildings, the City has decided to move beyond the prescriptive approaches of the GGBP towards absolute energy use caps for buildings.
In November 2017 the Mayor’s Office proposed a law (Intro 1745) to limit fossil fuels in buildings by 2030 based on square footage and to develop whole building targets by 2020. (See our previous blog about intro 1745 HERE). This bill proposed an overly simplified model for assigning energy use caps that the real estate and environmental industries agreed was not going to be successful, cost effective or fair for numerous reasons.
Soon after Intro 1745 was introduced, Urban Green Council convened a group of over 80 stakeholders across real estate, engineering, labor unions and environmental advocates to improve and/or replace the bill. The findings of this group have been consolidated into a formal report, the “80x50 Blueprint for Efficiency” that was published today.
The report outlines 21 recommendations on how Intro 1745 should be revised to be more effective, fair and equitable for building owners across the city while still targeting ambitious climate goals. There is more work to be done to fill in the details of how this legislation will mandate efficiency, but this is a thorough report that outlines the major areas that need to be addressed. CodeGreen is proud to have been involved with the development of these recommendations and we look forward to collaborating with the NYC real estate industry and the NYC government to push successful legislation forward.
Highlights of the report include:
- Requiring each building sector to save 20 percent in source energy use from 2020 to 2030
- Creating a metric based on Energy Star calibrated to NYC building data
- Regulating all energy sources together, with smaller reductions required of more efficient buildings
- Including flexible compliance pathways, such as green power purchase and efficiency credit trading
- Dramatically expanding support and financing options to help owners comply, with particular focus on sectors that need more help
See the press release HERE
See the full report HERE
In 2016 as part of the Los Angeles City plan to reduce citywide energy use by 30% by 2035, the city passed the Existing Buildings Energy and Water Efficiency Ordinance (EBEWE) to encourage buildings to reduce energy and water use. EBEWE requires buildings over 20,000sf in the City of Los Angeles to submit ENERGY STAR Benchmarking annually and beginning in 2020 buildings will be required to meet specific energy and water performance targets or perform audits to identify savings measures. Below is an outline of what is required to comply. Contact CodeGreen to create a successful compliance plan for this new ordinance that will improve the energy, water and financial performance of your property.
What buildings are impacted by EBEWE:
All privately owned buildings in the City of Los Angeles over 20,000sf
Includes residential, commercial, and industrial buildings (including structured parking and condominiums)
What is required:
Energy and Water Benchmarking (annually)
Applies to: All buildings over 20,000sf
Deadline: June 1 every year
How to Comply:
Submit the building’s ENERGY STAR Benchmark Score to LADBS annually.
The ENERGY STAR Benchmark uses the EPA’s online Portfolio Manager Tool to calculate a building’s relative energy performance compared to buildings of similar size and function across the country.
Energy and Water Performance (every 5 years)
Applies to: All buildings over 20,000sf (occupied for at least 5 years)
Deadline: First Compliance Deadlines as follows based on last digit of AIN and every 5 years thereafter: 0, 1 = 2020 | 2, 3 = 2021 |4, 5 = 2022 | 6, 7 = 2023 | 8, 9 = 2024
How to Comply:
Energy Performance Compliance
Achieve one of the following:
- Achieve ENERGY STAR Labels (2 out of 3 years preceding deadline year)
- Energy performance is 25% better than median performance of similar buildings
- Weather normalized energy use intensity reduced by 15% compared to 5 years prior
- If no central cooling system, meet prescriptive requirements
Perform an ASHRAE Level II Energy Efficiency Audit and Retro-commissioning Study of base building energy-consuming systems
Water Performance Compliance
Achieve one of the following:
- Water use intensity reduced by 20% compared to 5 years prior
- If no central cooling system, meet prescriptive water fixtures requirements
- Meet Los Angeles Municipal Code in effect during 5-year compliance cycle
Perform Water Audit and Retro-commissioning of base building systems per ASHRAE Guidelines
CodeGreen is excited to announce that we are have been awarded the ENERGY STAR Charter Tenant Space recognition by the US EPA for our New York City headquarters. We are proud to add this recognition to our recent ENERGY STAR Partner of the Year award.
On June 12th the US EPA awarded the ENERGY STAR Charter Tenant Space recognition to the first group of tenants across the country who successfully completed this new 10-month pilot program aimed at improving energy efficiency in commercial office spaces. CodeGreen is proud to be among these industry leaders and supporting the development of this groundbreaking program.
Commercial tenants can consume 40-60% or more of the energy used by office buildings and a similar portion of the carbon footprint. In the US buildings represent 40% of the nation’s carbon footprint, and in New York City buildings represent 70% of citywide emissions. In order to meaningfully reduce carbon emissions in large cities around the world, buildings must be a part of the solution, and commercial tenants must also get involved.
To support and recognize energy efficiency within commercial tenant spaces and leverage the EPA ENERGY STAR brand, the EPA launched the ENERGY STAR for Tenant Spaces pilot program in September of 2017. The objective of the pilot was to evaluate the program with a small group of tenants and refine the program structure before launching it to the public. A group of almost 50 tenants across the country volunteered to participate in the pilot, which included joining webinars and feedback sessions, and providing data to the program’s administrators. Feedback and quantitative data from the pilot program participants will be used to inform the further development of the program before it is made available to the general public. On June 12th, participants who completed the pilot program were officially recognized by the EPA.
“Congratulations to all the ENERGY STAR Charter Tenants for their hard work improving energy efficiency in tenant spaces,” said EPA Assistant Administrator for Air and Radiation Bill Wehrum. “These organizations demonstrate how tenants and landlords can work together to cut energy costs and reduce waste, while creating a healthier environment.”
As participants in the program, CodeGreen evaluated our operating procedures, surveyed our office equipment and lighting to ensure alignment with the program guidelines, and tracked our monthly sub-metered electricity consumption using the EPA ENERGY STAR Portfolio Manager tool. The program helped us identify areas of high performance and areas with opportunity for improvement. As a result of the program we are reevaluating our lighting needs and researching the latest technologies in lighting and controls.
CodeGreen Associate Director Josh Berengut, who managed CodeGreen’s participation in the pilot and oversaw the documentation of our energy efficiency practices added, “this pilot program was really great to be a part of. Having watched the program since the concept was proposed several years ago, we were glad to be a part of the group shaping its structure for future use. Now tenants, in addition to landlords, can earn recognition for their dedication to energy efficiency.”
Read more about commercial tenant energy efficiency programs in our recent blog post.
Join IFMA NYC for a discussion on energy efficiency best practices, case studies and resources for tenants to kick start their energy efficiency initiatives in their own office space.
The event will feature presentations from representatives of NYSERDA & ConEdison on the latest energy efficiency rebates and incentives; The Mayor’s Office of Sustainability on the NYC Carbon Challenge; and tenants / landlords from BlackRock, Rudin, Bloomberg and Vornado who have collaborated to collectively save energy through coordinated energy upgrades and improved communication.
Wednesday, June 13th, 5:30pm-8:30pm at BlackRock, 40 East 52nd Street.
Click HERE for more information and to register.
Since 2015, CodeGreen has been working with California's Department of General Services (DGS) to improve sustainability performance across their portfolio by improving energy and water efficiency, reducing waste, improving recycling rates and indoor air quality. And over the past two years, they have achieved LEED certification for 25 buildings through the LEED Volume program, totaling over 8 million square feet.
CodeGreen's process included performing energy audits, on-site inspections and training and education sessions with building operators and occupants to help improve the overall efficiency of these buildings, which include a wide variety of building types and ages, ranging in age from 10 to 93 years including the iconic Caltrans District 7 Headquarters and the historic Stanley Mosk Library and Courts Buildings above.
The LEED Volume program allows DGS to take advantage of efficiencies gained by managing the portfolio as a whole, while reviewing each building's performance against standard operating protocols. These LEED certifications also provide third party verification of DGS' rigorous green building program and focuses building management on contributing to the state's broader goals around greenhouse gas reductions, waste management and sustainable purchasing. CodeGreen will continue to support DGS’ ongoing sustainability program through engagement, ongoing data management and LEED certification for eligible buildings.
One of the buildings to achieve LEED Gold certification was the California Energy Commission (CEC) building in Sacramento. Collaboration with the CEC team led by Executive Director Drew Bohan was an essential part of the successful certification. “Achieving LEED Gold certification is a testament to the good work our team provided and the seasoned guidance supplied by our partners.” said Executive Director Bohan. “The Department of General Services helped improve the efficiency, sustainability and health of our building, while CodeGreen provided the expertise and hands-on support needed to manage the certification process.”
CodeGreen worked with the operations and management teams of each building individually to understand operational and procurement practices, measure baseline performance and identify opportunities for improvement. Building improvements included HVAC, lighting system and controls upgrades, operational and procurement improvements and water efficiency measures. They also worked with the team at each building to reduce waste production and increase recycling. Throughout the process, CodeGreen tracked monthly building performance across dozens of metrics using their online ProAct tool.
Patricia Lee, Principal at CodeGreen, added, "We have been thrilled to work with the State of California and the Department of General Services as they lead by example on achieving sustainability goals for their buildings. We look forward to supporting the DGS team and their dedicated Facility Management staff as they continue their efforts to achieve aggressive sustainability targets."
On Thursday April 19th, Adam Fisher, Senior Project Manager at CodeGreen Solutions, participated in Cushman & Wakefield’s Earth Month Speaker Series, “The New Frontier in LEED Certification.” This panel, which was simul-cast to the Cushman & Wakefield Tri-State Region, detailed the certification process for LEED 2009 for Existing Buildings: Operations and Maintenance through the lens of the recent LEED Gold Certification at Heron Tower (70 East 55th Street, New York, NY 10022). CodeGreen Solutions managed the LEED process for this Cushman & Wakefield property from initial feasibility through final certification by the USGBC.CodeGreen was joined on the panel by the Heron Tower property management team as well as Cushman & Wakefield managing directors in asset services. Adam served as the LEED subject matter expert, explaining to the audience of brokers and asset services professionals the steps of establishing sustainability policies, executing sustainability assessments, and measuring sustainability performance, all in the context of a LEED certification. Given his background as a Certified Energy Manager, Adam also detailed opportunities as a part of the LEED certification process to achieve points while identifying energy and operational efficiency opportunities through ASHRAE Energy Audits or Existing Building Commissioning studies. CodeGreen is proud to work with the team at Cushman & Wakefield to support this great achievement. CodeGreen has managed the LEED certification of over 55 million square feet of property across the country and provided energy benchmarking and analysis to over 330 million square feet of property.
On March 26, 2018, the U.S. Green Building Council (USGBC) released the first beta for LEED v4.1 for Existing Buildings and Spaces. The new version of the LEED EB:O+M has a simplified scorecard and aims to streamline the LEED certification process, while switching to an annual recertification cycle. Previous iterations of the LEED for Existing Buildings rating systems have been on a 5-year recertification cycle. LEED v4.1 builds on the momentum from the LEED Performance Score alternative compliance path in LEED v4, which focuses on the real-time performance of buildings, as opposed to meeting a series of prescriptive measures of previous versions. Below are some high-level takeaways from the newly released version. Building owners still have the choice to pursue the traditional LEED EB:O+M v4 certification pathway, but this will not utilize the Arc platform.
One Certification Path
LEED v4.1 has shifted to an entirely performance-based path. In the previous version of LEED EB:O+M (v4), project teams were able to choose to either follow a prescriptive path, one that teams may be most familiar with, or follow the performance path. Many of the previously available credits from LEED v4 have been included as Base Points in LEED v4.1, which can contribute to a project’s score over its lifespan.
Certification Now Available for Existing Interiors
Marking a major shift for the LEED EB:O+M program, interior spaces are now eligible to seek LEED certification for an existing space. This LEED EB:O+M v4.1 certification is treated as a first-time certification, and is separate from any LEED for Commercials Interiors certifications. Following the same criteria as existing buildings, interior spaces can track and report their performance in energy, water, waste, transportation and human experience. To determine consumption values, interior space projects can either install submeters on all energy and water sources, or prorate the building’s total consumption for the project space based on occupancy.
The updated scoring system within LEED v4.1 measures, monitors, and reports real-time performance scores for buildings and interior spaces, allowing occupants to visually understand the building’s overall performance. Individual scores are produced for each of the following six metrics:
The previous twelve months of consecutive energy use is entered into the LEED Performance Score portal. Energy use includes all utility types, including data from electric, steam, natural gas, and more.
The previous twelve months of water consumption data is entered into the Performance Score portal.
The tonnage of diverted and landfilled waste is entered monthly into the LEED Performance Score portal, and points are awarded to the building based on the building’s annual waste division rate and total tons of waste generation.
A transportation survey will need to be conducted at the building to confirm the percentage of tenants that use alternative transportation. A minimum number of each building’s occupants must take the survey to earn any points. The average carbon footprint of the commuting behavior is compared against the USGBC data set, determining the points awarded.
Human experience is rated on two factors: occupant comfort, and indoor air quality. Air quality testing will need to be performed on an annual basis to assess the air quality in CO2 and Total Volatile Organic Compounds. Additionally, an occupant comfort survey must be conducted each year in order to determine the exact number of points earned in this category.
The project teams can also pursue various base points to add to the total project score. Base points may be earned by achieving a select group of the credits listed below. Once base points are awarded, they continue to contribute to the project’s overall score and are not subject to variation year-over-year like the above credit categories.
Next Steps for LEED V4.1
It's important to note that this rating system is currently in beta and is now open for proposals on recommended changes before it becomes finalized. Additional details on LEED V4.1 and beta guidance can be found here. Please also reach out to CodeGreen for more information on this new this new LEED Certification option.
Earth Day 2018
Today is a chance for us to pause and take stock of what we as a society are doing to preserve and rebuild our natural environment. On this day we at CodeGreen celebrate the leaders in the private and public sectors who have recognized environmental sustainability as core to the long-term health and success of their organizations. From city and state governments to private and public investors and real estate managers of all sizes, organizations have made bold public commitments in the past year to reduce energy and resource use, prioritize renewable energy and use their influence to ensure their stakeholders do the same.
In 2018, CodeGreen joined over 2,700 business and government leaders representing over 127 million Americans in signing the "We Are Still In" pledge to support the carbon reduction targets outlined in the Paris Climate Agreement. This is the largest consortium of leaders in the US dedicated to climate action and we are proud to be a part of this historic initiative.
We are also proud to receive the US EPA's Energy Star Partner of the Year Award this year - the second year in a row - for our dedication to supporting energy efficiency throughout the real estate sector and working in partnership with policymakers across the country. This award is a great honor and recognizes the hard work of our dedicated team of energy and sustainability professionals.
In the past year more than 100 global companies have joined the RE100 and committed to use 100% renewable energy. The collective energy use of these organizations totals over 146 terawatt-hours per year, the equivalent of taking the entire state of New York off the grid.
In the real estate sector, investors, managers and developers have made impressive strides to build more efficient buildings and, even more importantly, to improve the efficiency of the existing building stock, which represents 40% of the country’s carbon footprint and 72% of its electricity consumption. Institutional real estate investors with long-term capital are at the forefront of this effort and are driving asset and property managers to prioritize sustainability. GRESB, the Global Real Estate Sustainability Benchmark, which ranks real estate firms for environmental, social and governance performance, has seen rapid growth since 2010 and now represents over 850 funds totaling over $2 trillion in gross asset value across the globe. And this global portfolio of properties recently reported a 2.2% annual reduction in carbon emissions, on track for reductions of over 20% over 10 years.
Commercial tenants have also recognized the value of sustainability for their organizations and in their office spaces, which is driving demand for green buildings and for sustainable and energy efficient fit-outs. Numerous programs around the country have been developed to support this growing market. In addition, many large tenants purchase their own energy and have joined the RE100 renewable energy initiative.
And on the legislative front, more cities and states are developing and expanding codes that require responsible management of energy, water and waste. Over 25 cities and jurisdictions now require annual energy use disclosures, which are the first step toward widespread improvements in efficiency and reducing our impact on the environment.
And closer to home, we are proud of our amazing clients, totaling over 330 million square feet of property across the country, that have undertaken energy saving initiatives ranging from education and training, operational improvements all the way to onsite renewable energy and major building retrofits.
We are encouraged by the impressive progress we have seen recently, but know there is still much work to be done. We look forward to partnering with our clients, partners and legislators to continue to improve the sustainability performance of the built environment and demonstrate the value this brings to all stakeholders.
Wishing you an inspiring Earth Day.
-The CodeGreen Team
In August 2018, the EPA will be updating the underlying data set and other calculation methodology that determine building ENERGY STAR Scores. These changes will most likely cause dramatic drops in the ENERGY STAR Scores of most buildings. Take action now to certify your eligible 2018 ENERGY STAR Labels and prepare for the upcoming changes.
The ENERGY STAR Score is calculated by comparing a building’s energy use to a group of similar buildings based on factors such as occupancy type, building size, operating schedule and climate zone. The building’s resulting score represents how the building’s energy use compares to the data set. If the building uses less energy than the median of the comparison set, the building will score better than 50, if it uses more than the median it will score below 50. Buildings that receive a score of 75 or higher, reflecting the top 25th percentile of performers, are eligible for the Energy Star Label.
For the last decade, the ENERGY STAR Score has used a data set of buildings from 2003. Since 2003 the average building has become more energy efficient, but the data set has not been updated. That is all about to change.
In August 2018 EPA will replace the 2003 data with data from 2012 and simultaneously update other aspects of the scoring methodology. Since buildings will now be compared to the more efficient set of 2012 buildings their resulting ENERGY STAR Scores will likely be lower. On average, the EPA estimates that “office” buildings will see a 12-point decrease, while other space types will see similar changes.
Be Prepared: New Energy Star Scores go into Effect August 27th, 2018
On this date, all scores (both forward looking and historic) will change and there will be no way to view prior scores
Apply now for your 2018 ENERGY STAR Label (DEADLINE HAS PASSED)
The EPA is allowing all eligible buildings to apply for ENERGY STAR labels between April 1, 2018 and July 26, 2018 even if it is less than 12 months from the prior label date. This is a one-time courtesy that is being granted given the significance of the changes.
Given that these changes may lead to your buildings’ scores dropping below 75 in August, we highly recommend taking advantage of this allowance and apply for ENERGY STAR Labels for all eligible buildings between before July 26th.
Call or email us to ensure you get the ENERGY STAR recognition you deserve before scores change in August.
For more info on the upcoming changes, see the EPA website HERE.
As part of California's ambitious environmental program, the state has set a goal of reducing waste from public facilities by 75% by 2020. To help state facilities identify waste stream issues and create a successful waste program, CodeGreen led a training on proper waste audit techniques. You can download our brief guide on waste audit best practices from the event HERE.
California AB802, passed back in 2015, requires owner of all "covered buildings" over 50,000sf across the state to benchmark their energy use annually using EPA's ENERGY STAR Portfolio Manager Tool. This is the largest benchmarking ordinance of its kind, covering over 36,000 buildings across the state.The first deadline for submission is June 1, 2018. The definition of a "covered building" is more nuanced than other benchmark requirements. You can see detailed definitions and the text of the law HERE.
July 1 Los Angeles Energy Star Benchmarking Deadline Approaching for Buildings over 50,000sfMake sure you have started the process to collect your 2017 energy, water and occupancy data so you don't miss the submission deadline. Buildings over 20,000sf will have to submit July 1, 2019.
SF Environment has extended the 2018 deadline for submission of 2017 Energy Benchmarking data Revised Compliance Calendar is as follows:March 15, 2018: New Confirmation of Energy Audit Reporting Template will become active - See: Recording of CEA Reporting Template webinar March 28, 2018: Release Annual Energy Benchmark (AEB) reporting template - SF Environment to email 2017 AEB template link to all parties that have previously submitted a benchmark March 26-30, 2018: SFE to send ECBO Notification Letters April 1, 2018: 2018 Confirmation of Energy Audits Due (Audit deadlines have not changed) May 1, 2018: 2017 Annual Energy Benchmark Due
Buildings are responsible for nearly half (46%) of the country’s carbon footprint and consume 75% of the country’s electricity. Since the 1970’s environmental and energy efficiency industries and groups like NRDC, EDF, IMT, DOE, EPA and ACEEE have worked tirelessly with the real estate sector to reduce energy use, save money and improve the environment. And it has worked. Since 2000, commercial buildings nationwide have reduced energy intensity by over 20% and buildings in New York City have lowered energy intensity by 5% since 2010. The bulk of these reductions, however, come from investments made by landlords and owner-occupied buildings who have in-house operations teams dedicated to reducing energy and saving their organizations money. Most commercial tenants, however, have largely been absent from this energy efficiency renaissance. That is finally changing, and landlords are beginning to engage with tenants to reduce energy use with mutually beneficial results.
Commercial tenants consume on average 40-60% of the total energy used in large office buildings. Tenant equipment, operations, and behavioral patterns have a significant impact on the overall performance, energy use and carbon footprint of the buildings they occupy. As a result, they represent a significant opportunity to reduce building-wide energy use, prolong equipment life and improve a building’s overall performance in rankings like EPA’s Energy Star Score that is published in many cities across the country. And these energy reductions translate into substantial carbon footprint reductions that align with an organization's broader corporate sustainability goals.
Over the past 25 years, with the rapid expansion of technology, the amount of energy-consuming devices in commercial tenant spaces has ballooned with powerful PCs, impressive AV equipment, and even data centers within their offices that require 24x7 cooling. Many tenants have also installed dedicated HVAC systems to heat and cool their spaces without having to rely on landlord systems. As a result, tenants now consume a substantial portion of whole-building energy, and some even operate like a “building within a building”. In addition, recent advances in energy metering technology and the simultaneous drop in the cost of sensors have shed more light on this issue as more tenants are able to accurately measure the energy that they consume separately from the energy consumed by their landlords.
For many tenants, energy efficiency is a relatively new topic, and there are number of reasons for this, most stemming from a mere lack of information. For most organizations that lease their office space, operations and energy management are not a priority. They are focused, understandably, on running their primary business. As a result, most tenants do not have specialized in-house energy and operations staff to measure, manage and improve the efficiency of systems like lighting, HVAC and plug loads. Organizations typically have someone responsible for paying the utility bill if there is one, but they may not know or have time to evaluate it or to know if they are using more or less energy than they could be. In addition, many tenants, even large ones, do not have a meter that measures the energy used by their space or receive their energy usage in a clear format on a regular basis.
Once clear data on energy use is collected, there is huge potential to find and eliminate energy waste. Some metering systems can measure not just monthly energy use, but energy use down to every minute and separate the energy used by lighting, cooling and plug loads to further identify savings opportunities. By comparing this data to historical trends or industry standards, or even other tenants in the same building, tenants can benchmark their performance and implement savings measures to equipment, controls and even staff behavior that can reduce energy use, save money and improve the environment.
For tenants who focus on energy efficiency, there are huge savings to be found. The financial leader BlackRock, working with CodeGreen, was able to reduce energy consumption by over 35% in just 4 years, saving over $300,000 per year at their New York City headquarters through upgrades to lighting, controls, motors, PC settings and data center upgrades. CodeGreen continues to identify energy saving opportunities by reviewing their monthly and 15-minute energy use. For more details on BlackRock’s energy reductions, see the case study HERE.
In the past 12-18 months numerous programs at the local and national levels have been developed to facilitate a market transformation in tenant energy efficiency and to support collaboration between tenants and landlords to improve the energy efficiency of new and existing tenant spaces. These programs include voluntary resources as well as mandatory requirements in some areas. Below are a few of key programs helping to drive this effort.
ENERGY STAR, the federal program that manages the free online tool Portfolio Manager, that buildings in dozens of cities across the country use to track and submit their energy use data for local law compliance, has created a new pilot program called “ENERGY STAR Tenant Space” to increase awareness of energy use in tenant spaces with the eventual goal of giving tenants an ENERGY STAR score much like total buildings receive. The scores are still a few years away, but tenants are able to use the current Portfolio Manager tool to record energy use, set goals and track progress over time. Contact us to learn more about using Portfolio Manager for tenant spaces.
Many of you are familiar with the term “split incentive” which refers to the scenario in many buildings where the entity who must pay for an energy upgrade may not be the entity that will save as a result, if the tenant pays and landlord saves, or vice versa. This obstacle is typically a result of old boilerplate language in most commercial leases. To overcome this issue, industry groups led by the US Department of Energy developed what is called a “Green Lease” or “Energy Aligned Lease” which allows a landlord to recover portions of the cost of energy upgrades from the tenants, who will ultimately save as a result. The DOE has created a program around this initiative called the Green Lease Leaders, that supports landlords and tenants with sample lease language and highlights organizations that are implementing these leases as well as other collaboration with tenants around energy efficiency.
Urban Land Institute has developed a step-by step program to help tenants successfully incorporate sustainability and energy efficiency into the planning, development and design of new office spaces. CodeGreen worked with program participant Global Brands on their new office space in the Empire State Building, managing the energy efficiency financial incentives. See the case study HERE.
IFMA, the International Facility Managers Association supports facility managers with resources that span the entire industry, but one of their greatest resources for managers at all levels who are interested in operating sustainable facilities is their How-To Guides. These in-depth guides across a number of sustainability topics from recycling to energy reduction provide insight into the benefits of sustainability in the workplace and nuts and bolts steps to implement a successful program. IFMA's ESUS (Environmental Stewardship Utilities and Sustainability) Committee is further expanding its role to become the "voice of the tenant" with regards to sustainability and energy efficiency. CodeGreen is a member of this great committee.
In early 2017 the New York City Mayor’s Office of Sustainability launched the NYC Carbon Challenge for Commercial Owners and Tenants that challenged participants to reduce the carbon footprint of tenant and landlord spaces by 30% in 10 years. Over 58 million square feet of landlords and tenants signed up for the challenge. The group meets quarterly to discuss current barriers to tenant/landlord collaboration on energy efficiency and best practices for accelerating energy efficiency improvements in tenant and landlord spaces. CodeGreen is proud to support the City on this program and to be working with many of the participating landlords and tenants to identify opportunities to work together to save energy.
In New York City, in order to increase transparency and accelerate the discussion of tenant energy use in commercial buildings, the City passed a law in 2009 that goes into effect in 2025 that requires owners of buildings over 25,000sf to install electric sub-meters for all tenants over 5,000sf. The law also requires building owners to issue monthly statements to these tenants showing them monthly energy consumption. This law should dramatically increase tenants’ awareness of energy use. Some specifics of the law are still in development and we are hopeful that the final details will encourage energy efficiency collaboration between landlords and tenants. But putting energy use information into the hands of tenants is only the first piece of the puzzle. Helping tenants to decipher the information and use it to take action to improve efficiency is critical to reducing the impact that buildings have on our environment. Monthly energy statements will allow tenants to see large changes in usage from month to month and season to season. The statements will also help tenants evaluate the effectiveness of energy saving initiatives like replacing lighting, controlling PC sleep modes, etc.
Congratulations to the team at JFK Terminal 4 for becoming the first airport terminal in the country to achieve LEED-EB Gold! CodeGreen is proud to be part of the team that made this happen! Click here to read this article
Patricia Lee is a featured Master Speaker at LA's Existing Building Energy and Water Efficiency Ordinance Workshop taking place at La Kretz Innovation Campus, Los Angeles on January 26th, 11am. Click this link to register for the workshop Speakers will be available for one hour following the free workshop to provide one-on-one support - please join the workshop and bring your questions! For more information on the Existing Buildings Energy & Water Efficiency Program, click link.