Issue link: https://resources.tangoanalytics.com/i/1508313
WHY PRIORITIZE SUSTAINABILITY Building owners must navigate the complexity of various regulatory environments at the local level but may also need to adhere to regional or national legislation as well. Ensuring compliance with reporting and benchmarking requirements, green building codes and minimum building performance standards, and city emissions mitigation laws are necessary to avoid fines. More cities and states are implementing carbon reduction mandates, such as New York's Local Law 97, which requires buildings over 25,000 square feet to reduce their greenhouse gas emissions starting in 2024. Similar initiatives are happening in Boston, Seattle, and other cities across the U.S., and globally. T E N A N T D E M A N D & T H E " G R E E N P R E M I U M " : R E G U L A T O R Y C H A N G E : E N E R G Y M A R K E T T R E N D S : Many commercial tenants now have ESG goals and report to sustainability frameworks. In order to meet or advance these published goals that may be related to the energy efficiency, water usage, and carbon intensity of the spaces they occupy, tenants are increasingly willing to pay a premium to rent or buy buildings with certified sustainability credentials. For example, a study by the Global Real Estate Sustainability Benchmark (GRESB) found that sustainable real estate assets outperformed their peers in terms of rental growth and occupancy rates. Renewable costs have dropped significantly in the past decade and frequently outcompete fossil fuel generation when it comes to the levelized cost of producing that energy. Even without carbon taxes and penalties, fossil fuels are getting more costly and volatile as evidenced by geopolitical conflicts like the Russia-Ukraine war exposing the risk of stranded carbon assets, and investment opportunities in renewables and energy efficiency becoming more appealing in terms of price stability and energy security. The World Energy Outlook predicts that fossil fuel emissions will peak by 2025. In the U.S. solar is now 33% cheaper than natural gas. Additionally, trends in 2022 carbon trading markets indicate that the global price of carbon is expected to see a rise, which may translate into higher energy costs and increased operating expenses for real assets. I M P R O V E T E N A N T H E A L T H & P R O D U C T I V I T Y : Transitioning buildings to low-carbon, green alternatives often results in meaningful improvements to air quality and the comfort of living and working spaces, reducing chronic disease and improving the health of tenants and those living within the range of commercial developments. Sustainability & Energy Management Simplified