3 Things To Watch For With CRE Carbon Reduction

The promised SEC’s climate exposure regulations are on temporary hold as the agency has extended the comment period amid concerns from companies about the cost of reporting. 

But climate issues aren’t going away, especially in commercial real estate, where many eyes are on the impact of buildings’ carbon footprints. There’s also the spiraling cost of energy that makes conservation a fiscal imperative.

Existing solutions can work, but, as with any use of technology, eyes wide open is the best way to approach them. Climate tech startup Cortex Sustainability Intelligence recently released a white paper on how to evaluate office building decarbonization methods (that would presumably apply to other CRE property types).

The paper covers four topics, with the last really being a sales pitch on its own technology, but there were some more generally applicable points on three other common strategies.

The company’s largest point is that—again, as with any attempt to solve a problem with a range of technologies—prioritization is important. Find the easiest and biggest bang for the buck and a business can make better headway.

The first strategy Cortex addressed was HVAC equipment upgrades. Given that systems are typically in place for 20 years, the investment is long term, but the biggest savings come in the first year. “Although you will see a near immediate reduction of operating costs, it’s important to note that this is often known to be one of the most costly methods of decarbonization,” the report says. The payback period can vary greatly by size of the building. AC upgrades can take five to ten years while space heating paybacks are in the five-year range and HVAC controls, less than three. Cortex also says that a concentration on HVAC upgrades can cause building owners and operators to miss other quicker tactics, like optimizing existing systems.

LED lighting is popular for good reasons. It’s easy enough to adopt, the cost is relatively low, and the track record is already proven. However, they “provide minimal savings on emissions” and the efficiency doesn’t increase over time, so what you see early on is what you early on is what you’re likely to get, and that typically would drop annual energy costs by only a few percent. “In fact, improving tenant lighting controls—such as timed lighting, motion sensors, or dimming light switches — and reducing watts per square foot was proven to decrease carbon emissions from lighting in greater stride,” the company wrote.

Third, window replacement. “While your windows may not be actively producing carbon emissions, your energy savings are going out the window if they are not energy efficient,” the firm points out. However, while solar heat gain through windows, like a greenhouse, can affect HVAC cooling systems, there is “little statistical evidence on how much window upgrades can save in large buildings … making this a riskier choice if you’re trying to make significant strides in the immediate future.”

In short, when it comes to improving energy use, do a thorough analysis and recognize that what may seem like a natural measure may not be.