The monthly update of the Institute for Market Transformation

July 2017

Chicago Ranks First Nationwide for Green Office Buildings 

The Chicago River may turn green each year for St. Patrick's Day, but a new report asserts that the city's office buildings are green year-round, naming the Windy City as the top city for certified green office space in the United States. Sixty-six percent of Chicago's office space is certified green or efficient, making it an increasingly competitive market compared to other U.S. cities in the race to save energy and reduce pollution from buildings. 

CBRE's annual Green Building Adoption Index (GBAI) measures the growth of green building throughout the 30 largest office markets in the country, and its latest report shows that tenants, investors, and landlords alike find value in energy-efficient buildings. This year, IMT experts were invited to contribute research and commentary on green building policies to the report—find their insight in the Executive Summary here

Green building has become the norm in Chicago largely because of community demand and the City's dedication to reducing its climate emissions. As a partner of IMT and the Natural Resources Defense Council's (NRDC) City Energy Project, Chicago is one of multiple cities on the list that have implemented energy benchmarking and transparency policies. According to the city's 2016 Benchmarking Report, Chicago properties that benchmarked their energy use for three years reduced their total energy use by 4 percent during that time, saving an estimated $11.6 million on their cumulative energy bills. 

The GBAI report suggested that this impact could be repeated throughout the country—nine of the top 10 cities have implemented benchmarking laws, and the report highlighted a possible link between the policies and measurable increases in green certifications. Cities with benchmarking had 9 percent more ENERGY STAR and LEED-certified buildings as well as 21 percent higher certified square footage. 

To develop the list, CBRE classified a green office building as one that holds either an EPA ENERGY STAR label, USGBC LEED certification, or both. Chicago was closely followed by San Francisco with 61.8 percent green-certified office space in 2016; Atlanta (55%); Houston (53%); and Minneapolis/St. Paul (50%) rounded out the top five. Across the top 30 office markets in the U.S., a cumulative 38 percent of commercial office space is certified green or efficient.

IMT works with many of the leading cities in this report to develop green real estate opportunities in partnership with private markets. We continue to expand our efforts as industry recognizes the increasing economic and environmental value of efficient space. Find the study's full results here.

Photo courtesy of the City of Chicago Benchmarking Report 2016 

Spotlight: City Energy Efficiency Rankings 

CBRE's 2017 Green Building Adoption Index (GBAI), published with commentary from IMT, is one of several recent rankings showcasing city action on energy efficiency. So, how do the rankings compare to one another? IMT's Senior Program Associate Amberli Young highlighted major takeaways and leading cities in her recent blog post. 

The GBAI report, for example, notes that 12 of the top 25 transactions in the Chicago market during 2016 were in LEED-certified buildings. In addition, the city's overall green-certified square footage increased by 6.5 percent since 2015, which is an exciting development that may have some relation to the City of Chicago’s energy benchmarking and transparency law, which has been in place since 2013.

Cities across the country lead on energy efficiency action. Here are the top five metro areas highlighted in recent studies. 

The GBAI report is complemented by the release of ENERGY STAR’s 2017 Top Cities list, which ranks metropolitan areas by their number of ENERGY STAR-certified buildings in order to show the magnitude of ENERGY STAR adoption. The Washington D.C. area topped this year’s overall rankings with 790 buildings certified for 2016, representing 174 million square feet. The District's top finish was likely driven by strong demand from local tenants for energy-efficient space; the largest tenant in the area is the federal government, which will generally only lease space in buildings that are ENERGY STAR-certified. 

Finally, the American Council for an Energy-Efficient Economy (ACEEE) also released its 2017 City Energy Efficiency Scorecards. In this report, Boston—one of IMT's City Energy Project partners—took the top ranking this year, largely due to strong utility programs in Massachusetts and energy efficiency policies for municipal and private buildings.

For more insights on local energy efficiency action, read Amberli's full blog here. 

Upcoming Webinar: Examining the Effectiveness of Benchmarking and Transparency Programs

The building sector is the single largest user of energy in the United States, accounting for nearly 40 percent of total energy consumption. Recognizing that you can’t manage what you don’t measure, a growing number of U.S. cities, states, and counties are creating benchmarking and transparency programs to track and share buildings' energy use data. These policies now affect over 10 billion square feet of floor space in major real estate markets. Are they working to drive greater attention to—and action on—building energy and water use? An upcoming webinar hosted and moderated by IMT will feature new research into the effectiveness of existing benchmarking and transparency programs.

Lawrence Berkeley National Laboratory will present on its April 2017 review of benchmarking programs. The review describes the design and implementation of mandatory benchmarking programs across the U.S., identifies best practices, and summarizes the current understanding of energy impacts from benchmarking.

Patrick Hughes from the National Electrical Manufacturers Association (NEMA) will discuss NEMA’s survey of facility managers subject to Local Law 84, New York City’s benchmarking program. The survey found that 82 percent of respondents who benchmarked their buildings’ energy use went on to make energy efficiency improvements.

David Hsu of the Massachusetts Institute of Technology will speak on his recent publication, “Estimating Energy Savings from Benchmarking Policies in New York City.” In the paper, Hsu and his co-authors estimated that public reporting of a building’s benchmarking data was responsible for a 6-9 percent reduction in building energy use intensity three years later and a 13-14 percent reduction after four years.

This webinar will be moderated by Zachary Hart, IMT's Manager of Building Performance Policy. Register to attend the webinar "Benchmarking Progress: Examining the Effectiveness of Benchmarking and Transparency Programs" on July 31 (2 p.m. EDT) here.


2017 National Leadership in Sustainability and Energy Efficiency Award  

IMT and the International Code Council (ICC) are pleased to present the 2017 National Leadership in Sustainability and Energy Efficiency Award to the U.S. Department of Energy's Pacific Northwest National Laboratory (DOE PNNL). 

Bing Liu, manager of PNNL's award-winning building energy codes team. 

PNNL is being honored for bringing "national attention to the cause of energy conservation and sustainability in the built environment," explained awards committee chair Brian Bishop in a letter. Over the past 20 years, PNNL has worked with industry and policy leaders to implement more effective building energy codes—PNNL analysis estimates that implementing better building energy codes has the potential to save the U.S. $126 billion between 2010 and 2040. 

The award will be officially presented at the ICC's annual conference in September. Congratulations to all PNNL staff involved! 

Catalyzing Market Transformation: IMT's Audi Banny  

IMT is laser-focused on unleashing the potential of energy-efficient buildings to improve bottom lines and property value, drive economic growth and job creation, and reduce harmful pollution to create healthier, resilient communities. By collaborating throughout the building efficiency arena, IMT’s expert staff strive to catalyze collective and permanent market change. So, who is IMT? Get to know our subject matter experts in a new blog series.

Audi Banny, IMT Associate Director for Market Engagement, brings expertise in corporate sustainability to IMT's Landlord-Tenant Energy Partnership. Previously at Aveda Corporation, Audi scaled efficiency throughout a global real estate portfolio by developing sustainable design guidelines. Most recently, as the director of corporate sustainability initiatives at Estee Lauder Companies, she led the way to a 22 percent reduction in the Fortune 500 company's energy consumption.

Now at IMT, Audi is helping companies access the benefits of sustainability and efficiency through the Energy Partnership, which capitalizes on Audi's understanding of common roadblocks facing corporate efficiency programs as well as up-and-coming solutions. To learn more about Audi and the Energy Partnership, click here.

IMT Resource of the Month

Energy benchmarking continues to transform markets by informing smart investment decisions and rewarding efficiency. Learn more from IMT's resource Energy Benchmarking and Transparency Benefits.

Connect With IMT Next Month 
Beyond Benchmarking: Capture Savings and Reduce Impact with Advanced Sustainability Management

August 2
USGBC National Capital Region (Washington DC)

Central Florida Buildings Compete on Efficiency 

The Central Florida Battle of the Buildings kicked off earlier this month, featuring commercial and multifamily buildings across the region vying for recognition of energy and water efficiency. 

The competition will run through December 2017 and encourages participants to implement proven efficiency strategies such as continuous benchmarking, operational changes, and lighting upgrades. The competition is open to buildings across the region including in Orlando, an IMT City Energy Project partner.

All participants will gain a renewed understanding of how their buildings consume resources, but the winners—tracked in ENERGY STAR Portfolio Manager—will be recognized in early 2018. Battle sign-up ends July 31.

IEA: Investment in Efficiency Continues to Grow

In July, the International Energy Agency (IEA) released its World Energy Investment 2017 report. According to the report, overall energy investment was down due to a drop in upstream oil and gas investment, although spending in energy efficiency increased by 9 percent—reaching a total $231 billion in 2016.

According to the IEA's analysis, governments continue to lead the way on energy investments: The costs of government energy efficiency programs represent 14 percent of efficiency spending and, via loans and competitive mechanisms, directly generate private spending that has risen to over twice this level. 

Globally, most efficiency investment ($133 billion) went to the buildings sector, which the IEA reported accounts for about one-third of total energy demand.

To read a full review of the report, click here. 

DOE Funds "Next Generation" of Building Efficiency Projects

In July, the U.S. Department of Energy's Building Technologies Office (DOE BTO) announced it is investing more than $3 million in five projects to improve the efficiency of the nation's commercial buildings.  

The projects, which include matching private-sector funding, will develop new multisystem technologies to help building owners and operators optimize their buildings and achieve cost-savings. DOE also believes the new findings will spur investment-level decision-making and accelerate new utility programs.

To learn more about the selected projects, click here.  
New Resource Seeks to Spur Efficiency Finance

A new Underwriting Guide developed by the European Union-focused Energy Efficiency Financial Institutions Group (EEFIG) aims to assist investors that are scaling up deployment of energy efficiency capital.

Underwriting requires specialist knowledge of the asset class being considered for investment, but knowledge of building energy efficiency is at an early stage in many financial institutions. EEFIG's guide is a preliminary attempt to educate both financiers and developers about each other's priorities to support partnership, while also kick-starting a standardized approach to efficiency finance. Find the full resource here.
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