How Tech Improves Visibility into Tenant Emissions
As commercial real estate (CRE) portfolio managers face increasing pressure to report greenhouse gas (GHG) emissions, staying ahead of evolving reporting mandates is essential. From California’s 2022 Energy Code to Massachusetts' Greenhouse Gas Reporting Standards and the Building Energy Performance Standard (BEPS) in D.C., regulations are intensifying across the country. Even companies not legally required to report are taking proactive measures to meet the demands of fund managers, investors, and other stakeholders looking for sustainability and transparency in operations.
Tracking emissions under a single energy account is challenging enough, but when tenants use different energy sources, managing emissions reporting can become a complex puzzle for CRE leaders, with numerous missing pieces. Without visibility into tenant-specific emissions, your sustainability goals and reporting accuracy are at risk.
This is where asset and energy data management software can be a game-changer. By enabling comprehensive tracking of energy use across multiple tenants, these solutions can empower CRE managers to collect accurate, real-time emissions data, eliminating guesswork and improving transparency.
This can help streamline data collection, simplify compliance, and ensure reliable estimations where needed, enabling CRE managers to more easily meet regulatory requirements, attract environmentally conscious investors, and achieve more effective sustainability outcomes.
Why tenant emissions visibility matters
Commercial real estate companies are planning for a zero-carbon future. You can’t lower carbon intensity for a building without a clear understanding of the building’s emissions baseline.
Building owners setting carbon reduction targets without a credible carbon planning strategy will not be taken seriously going forward. To meet reporting standards such as GRESB and report in alignment with zero carbon initiatives like SBTi, portfolio managers must take accountability for managing the entire property’s carbon footprint and reduction strategy.
You can’t manage carbon planning for an entire portfolio without visibility into tenant emissions, but that data is notoriously difficult to obtain.
Commercial real estate companies need a way to get emissions data from tenants and a method for estimating the data they can’t get so they can track progress and plan for net zero.
Some jurisdictions have begun requiring utility vendors to provide “whole building” utility data, but this isn’t common practice. Most of the time, portfolio owners are stuck asking tenants for energy usage data or physically reading their meters, one by one.
Reporting tenant emissions without technology
Without technology, this tracking is done with paper and spreadsheets. The larger the portfolio, the more difficult this becomes.
Manually tracking data from disparate sources carries a high risk of human error. It’s also time-consuming, as portfolio managers have to request energy usage data or read physical meters for each and every tenant.
Inevitably, there will be cases where tenant data is inaccessible. Without technology, commercial real estate companies will be forced to report the gaps in their data.
How technology facilitates visibility into tenant emissions
Having an accurate baseline is vital for benchmarking the path to net zero emissions. Sustainability software solutions can help portfolio owners collect and consolidate tenant energy usage data.
With software, companies can utilize multiple data sources to create a comprehensive assessment of the portfolio’s carbon footprint, complete with verifiable data and assumptions to fill the remaining gaps.
Consolidation
Using software to consolidate tenant emissions data into one centralized location limits the risk of error and streamlines reporting to government and industry disclosure programs. A sustainability data management system (SDMS) highlights missing emissions data, ensuring every square foot is accounted for.
Combined with predictive analytics, the resulting comprehensive assessment of emissions helps companies set achievable reduction targets. Portfolio owners can set and track carbon reduction targets at the property or portfolio level and streamline the process of sharing data with external stakeholders, all within an SDMS.
Integration
Leveraging an SDMS as the single source of truth for all emissions data simplifies reporting to frameworks like ENERGY STAR Portfolio Manager and GRESB. Sustainability data management software can even integrate directly with these frameworks, all but automating the reporting process.
Meter reading
Mobile applications allow portfolio managers to collect energy usage data from tenant meters and upload it straight to an SMDS from a mobile device. This eliminates the need to haul clipboards and paperwork between properties while improving the quality of data collected.
Estimation
When tenant energy usage data is not retrievable, portfolio owners can use sophisticated predictive analytics to estimate emissions for a specific property or tenant. Energy usage estimates are made based on the type of building, size, location on the utility grid, and asset class.
In addition to satisfying reporting requirements, these estimates ensure the emissions data used to create and track carbon reduction targets is comprehensive and as accurate as possible.
Conclusion
Ultimately, emissions reporting is done with one ultimate goal – to reduce overall carbon emissions and reverse (or at the very least stall) the impact of warming temperatures.
Without transparency into tenant emissions, commercial real estate companies cannot track or report comprehensive emissions data. That baseline is crucial for setting benchmarking milestones that can become a basis for achieving real carbon reduction.
Learn more about 7 emissions reporting mandates being put into effect across the U.S. Or if want tips on how to improve your own decarbonization efforts, download our Simplifying Sustainability guide for actionable tips on how you can take the first steps on a journey to Net Zero.
