Building owners and municipalities are emphasizing sustainability measures more than ever as the commercial real estate industry assesses its environmental impacts against grim climate change projections.
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In Boston, buildings are the source of nearly two-thirds of the city’s carbon emissions, according to a report by the Boston Green Ribbon Commission. City officials are devising initiatives to push Boston to be carbon neutral by 2050.
The push comes amid a global climate crisis that reached a grave new phase Monday, when a United Nations panel released a damning report that found it is too late to prevent extreme heat in the next 30 years — but not significantly reducing emissions could make the climate even more extreme.
Boston’s environmental data gathering and reporting requirements are among the nation’s best, experts said last week during Bisnow’s Boston Construction & Development event. But until more places follow suit, they will be merely a drop in the bucket.
“We pick tools here and there that allow us to market the benefits that we’re doing, it’s not getting us into a better place as a country,” Arc Skoru founder and CEO Scot Horst said at the event. “Standardization, what we see Boston doing, is great. I think we need to do that on a better level.”
Boston gathers buildings’ greenhouse gas emissions data through the Boston Planning and Development Agency’s Building Energy Reporting and Disclosure Ordinance, or BERDO. The rule requires building owners to submit their emission-reduction efforts every five years and for emissions data to be made public. The city is also midway through finalizing a zero net carbon zoning initiative through a series of public meetings.
“If you look at BERDO, that’s groundbreaking,” RENU Communities Chief Technology Officer Christopher Gray said. “It serves as an example that other large cities can use across the country. There are about 28 cities across the country that have reporting guidelines, but Boston’s one of the best.”
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Panelists expressed cautious optimism, but acknowledged the uphill battle to deliver carbon-efficient upgrades and promote similar efforts across the industry.
“Electrification is going to be a big part of that,” The HYM Investment Group partner Doug Manz said. “That’s the one we’re concerned about more long-term: The grid is not ready for that.”
HYM is developing the 161-acre Suffolk Downs development in East Boston and Revere, a site vulnerable to climate change-fueled rising sea levels and intensifying storms. The developer is building two residential buildings that will produce more energy than they consume, Manz said. At the megaproject, his firm is mulling a microgrid, an independent power supply for the buildings, and is securing street rights for construction.
HYM is also mulling solar panels and battery storage for the buildings, he said. But ambitious sustainability plans are not without their own form of anti-development pushback.
“I think it has to be a comprehensive approach,” Manz said. “If neighborhoods don’t like height and density, they definitely don’t like substations.”
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More than half of greenhouse gas emissions from Boston’s buildings come from natural gas and oil use, used to produce space heat and hot water, according to the BGRC. Electricity accounts for the other 47% of emissions, the Green Ribbon Commission report found.
Eighty-five percent of the city's projected building inventory in 2050 is already built today, and the existing structures will require replacement of heating and hot water systems currently relying on gas and oil with electrical heat pumps, according to the Boston Green Ribbon Commission. Heat pumps can reduce greenhouse gas emissions of buildings by 44%, according to the American Council for an Energy-Efficient Economy.
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Companies are increasingly placing the principles of ESG, which stands for environmental, social and governance, into their investment approach, and rating agencies and data firms are recording ESG metrics, which are now factoring into commercial transactions. The Securities and Exchange Commission is also stepping up ESG enforcement, creating a task force to analyze disclosure and compliance issues.
As companies focus on energy efficiency, they must remain wary of their actual carbon footprint, Horst said. The energy-efficient measures implemented in buildings in Atlanta, for example, will produce more carbon than Boston because of Atlanta’s coal-powered energy grid, he said.
Understanding the whole scope of a buildings' carbon footprint is vital for organizations overhauling their environmental footprint, said Mark Erba, senior director of global market development in the Americas for the International Well Building Institute.
“Not far back, an organization or company would create a PDF and say, ‘We’re doing this for environmental, we’re doing this for social,' but there was no substantiation of the information,” Erba said. “I feel as though it’s going to drive the market to the individual buildings and to the smaller real estate holders.”
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