Building Decarbonization: Regulations as a Driver of Change

Building decarbonization has become a hot topic in real estate globally and for good cause. “Approximately 26 percent of all GHG emissions and 37 percent of combustion-related emissions come from the construction and operation of the built environment.” As business continues in a time of crisis it is important to start reshaping business as usual to bring environmental risks and issues to the forefront.

Regulations have been enacted around the globe to deal with these challenges. In the United States specifically, laws and regulations regarding building emissions can be seen in many states and cities. Check out this environmental legislation tracker for the latest bills and information by filtering for building decarbonization bills. From Seattle to New York, each piece of legislation varies in specifics but has the same overall goal – to drive building decarbonization.

Investigating Building Decarbonization Regulations: New York Local Law 97

Although compliance looks different in each case, understanding the general steps for compliance can allow you to better understand, prepare, and start taking the same steps even if not regulated. Why would businesses do this voluntarily? We will get into that later!

Take the example of New York Local Law 97. Under the law, many of the buildings over 25,000 gross square feet will face emissions caps starting this year. A full list of covered buildings can be found here.

There are four pathways to compliance:

  • Standard Pathway
  • Prescriptive Pathway – Article 321 for certain categories of affordable housing and houses of worship
  • 2026 Rent Regulated Properties
  • 2035 Income Restricted Properties

For the standard pathway, building owners or operators must start by understanding their 2024 – 2029 emissions limits based on Energy Star Portfolio Manager Property Types – see here. Next, they must begin tracking their properties’ greenhouse gas emissions to report on May 1, 2025, and every year after. As well, each report needs to be certified by a registered design professional. Emissions limits will change depending on the year and steps must be taken to ensure emissions do not exceed those limits.

It is estimated that “20 – 25% of buildings will exceed their emissions limits in 2024 if they take no action to improve their building’s performance“. That percentage increases to 75 – 80% in 2030 if no action is taken. Those who do not comply will face both penalties and fines which will be determined in better detail at a later date. Going against building decarbonization could prove costly.

Challenges With Compliance

For compliance with these regulations, organizations often face a few challenges when it comes time to report. The first, and often the largest, is data challenges. If you are just starting on your building decarbonization journey the initial tracking and reporting could prove difficult. From data collection and normalization to conversions and final reporting. When done manually this process is error-prone and time-consuming for employees.

If you own a portfolio of companies, complying becomes trickier. You may need to comply with many different regulations if your properties are not located in the same cities or states. As well, there may be more than one regulation in a location. For example, in New York, you may need to report emissions for NY LL97 as well as energy usage to Energy Star Portfolio Manager to meet benchmarking requirements. This complicates the process and ensures more time spent reporting, especially if done manually.

Building Decarbonization? Don’t Comply, Pay the Fine?

Why should you comply when it seems complicated and time-consuming, and you could just forfeit a fine and/or penalty instead? No company likes losing money. Especially when it can be avoided and in turn, could end up saving you money in the long run.

How is that?

Let’s think of these sorts of regulations as the start of a race towards a better tomorrow. Not just for the environment, but your business too. If you aren’t already tracking energy usage and emissions, this is the push to start and unlock potential savings.

See, when you have the data in front of you it is easy to analyze that data to find areas in which you can improve. From the perspective of the regulators, this will be lowering your emissions to stay under set limits. From the perspective of the business, however, this will be seen as making decisions that will lower your emissions AND save you money.

Let’s look into building decarbonization a bit more. To decarbonize, you need to lower your emissions and eventually switch to clean energy sources. If we focus just on lowering emissions, without those switches, it often comes down to increasing your energy efficiency (or doing more with less). If your building is more energy efficient and therefore needs less energy to operate, you will see monetary savings year after year. Not to mention the other financial benefits of becoming more sustainable and future-proofing your business.

Building Decarbonization May Not be as Costly as you Think

The most common rebuttal to this is that although you will see cost savings, making the changes will cost money now. This is true, partially. There is a cost associated with making changes, but as governments back the effort to decarbonize buildings incentives are available to aid you in the transition.

In the United States, the Inflation Reduction Act is the largest climate investment in history, put into place to reduce the costs of transitioning. Check out our past blog on green incentives for businesses to get a better idea of what is available. If you are in an area that has regulations surrounding building decarbonization you should also stay on top of the latest incentives that may be available to those reporting.

The ScriptString Advantage

Even with the pros of starting on your decarbonization journey, getting the data not just for reporting but analyzing and tracking the financial impact of retrofits and initiatives can be time-consuming.

With ScriptString.AI you can automate the data management process, leaving you with high-quality data for reporting and decision-making. Plus our AI assistant will be there every step of the way, helping you find fixes that make sense financially and manage climate-related risks.

Check the compliance boxes with ease and say goodbye to spreadsheets, manual processes, and the headache of data challenges altogether. Request a demo today to see ScriptString in action. Making your business more sustainable and future-proofed, while increasing profits has never been easier than with the power of AI.


Related Posts


Sign up to recieve monthly news, insights and updates from ScriptString.AI

AI-driven Software for Sustainability Reporting


Follow Us

© 2024 ScriptString Ltd.