Gaining With Net Zero

Climate change is among the top concerns ranked in both the public and private sectors as we enter the new year.

The U.S. Department of Energy just recently committed to achieving net zero carbon emissions by 2050 to mitigate costly natural disasters and create healthy, safe, and thriving communities via a clean energy infrastructure. The private sector largely agrees that climate risk is investment risk and the number of corporations committed to net zero emissions doubled between 2019 and 2020.

ESD Energy+Eco is helping our clients understand how they can be more sustainable through net zero commitments within real estate portfolios. Here are some answers to common questions from clients:

What does “net zero” mean?

In 2021, the U.S. Environmental Protection Agency (EPA) is expected to release a specific definition of what it means to be “net-zero.” When applied to building systems, the term generally applies as follows:

What net zero goal does ESD recommend for buildings?

If financially feasible based on building type, size, and location, reaching net zero carbon by 2050 is advised. Carbon positive would have an even greater environmental impact, especially in states without specific clean energy goals.

While it is a recommendation now, net zero may be a requirement in the future. Limiting global warming to two degrees Celsius (identified as the climate change tipping point) has become the de facto target for global climate policy. New regulations may be adopted to force compliance in meeting this goal. Our net zero recommendation also recognizes the power grid challenges (ex. storage, legislation, land entitlements) likely to result in trying to meet the 100% clean energy goal by 2050.

How can my organization get to net zero?

Pick the right solution: Regardless of the net zero path you choose, the first step should be understanding your organization’s largest contributor to global warming. This is not necessarily limited to CO2 and could be other greenhouse gases such as methane or refrigerants. If your company has a sustainability director, they should be able to share this information and help you pick the best implementation strategy. A clear understanding of the quantifiable impact your business is currently having on the environment can pave the way for quicker approval and action.

Identify the winners: You should also consider who specifically benefits from these decisions. A net zero goal supporting the need for an energy-efficient building, as measured by energy use intensity (EUI), can pave the way to lower utility bills for tenants. (EUI is an indicator of the energy efficiency of a building’s design and/or operations and can be thought of as a “miles per gallon” rating for the building industry.) It can also make a better return on investment (ROI) argument for on-site renewable energy, which in turn can reduce a tenant’s carbon footprint.

Look for financial help: There are often financial incentives to make doing the right thing for the environment easier. Seek out federal, state, and local incentives to promote energy efficiency and renewables. ESD regularly presents on available incentives for net zero buildings.

Finally, if purchasing carbon offsets, be selective on who you choose. Focus on carbon offsets that support equity and other qualitative measures that can help with your organization’s environmental, social, and governance (ESG) reporting.

What net zero building certifications are recommended?

There are many to consider— PHIUS 2021, Zero Code, LEED Zero, and many more. ESD has offered an overview on some of the choices, but the options are constantly updating to reflect the current grid mix and technologies. A qualified professional can help you determine the best certification that overlaps current carbon offset investments, provides a prescriptive climate-based path to a lower EUI, and paves the way for on-site renewable energy. For example, the Passive House Institute of the U.S. (PHIUS) touches on all of these aspects, and ESD has an in-house Certified Passive House Consultant (CPHC).

What does all the net zero jargon mean?

There is a lot out there, but here are some of the more common terms relating to the built environment:

Decarbonization: Removal of carbon from energy consumption.

Electrification: Focus on equipment (buildings, transportation) that is powered by electricity that supports the need for a clean (and reliable) grid. (ESD is always reviewing climate-based electrification solutions that are cost feasible.)

Carbon Taxes: Taxes implemented through legislation. An example is NYC Local Law 97 which will tax buildings failing to meet the city’s performance-based standard.

Supply Chain Emissions: Scope 3 emissions that the purchaser absorbs following a transaction that represents the emissions generated to create the product. In the architecture industry, this is known as embodied carbon. ESD has the life cycle analysis software to calculate a project’s material’s embodied carbon and has presented on its growing traction.

Global Warming Potential (GWP): A measure developed to compare the global warming impacts of various greenhouse gases (CO2 is 1, methane is 28, and common refrigerants like HFC-134a is 4,800). ESD is actively reviewing lower GWP refrigerants while electrification’s goal is to remove methane as a fossil fuel used by buildings.

Carbon Capture: Technologies currently in production that capture and store carbon.

Conclusion

There are currently relatively few regulations in place to cap global warming to two degrees Celsius. With limited government oversight and guidance, it is up to individuals to act—and they have. Every day we are witnessing multiple and new solutions.

Driving investment in the built environment at scale in the near term will largely be from tenant demand and any new incentives from the federal government. To date, over 9,600 companies disclose carbon footprint data annually and that number is growing exponentially. Once more of these companies make a net zero commitment to attract investors and talent, we will likely see more tenants searching for leases that do not significantly add to their carbon emissions.

Do you want to know more about how you can implement net zero measures and incentives into your project? Reach out to Tim Zelazny.