With concerns about climate change, investor responses, and regulation of how commercial real estate properties handle carbon emissions, JLL suggests the CRE industry take building performance standards, or BPS, seriously.

These are standards that state and local governments globally are using to address climate change. A BPS governs building energy use and emissions reductions. According to the U.N., buildings account for almost 40% of carbon emissions, with the number typically approaching 60% in cities. That includes the energy used to create the materials that go into building construction, although JLL notes that operational, not construction, activities represent a greater proportion of whole life-cycle emissions.

Currently, such standards cover 25% of all buildings in the U.S. Some other parts of the world are more advanced in their efforts. Many cities are aiming to achieve net-zero carbon goals by 2050. Local governments are using building performance standards to better control operational emissions by setting emission or energy usage limits, typically by property type.