For sustainable buildings, the topic moving to the forefront is benchmarking to raise the bar on efforts to reduce energy use and carbon emissions.

Benchmarking of building energy consumption provides a number of advantages for building owners, occupants, and the broader community. The top incentive for benchmarking for many owners is greater energy efficiency, which provides savings good for both the planet and the bottom line.

“When people start paying attention to energy use, they tend to find little things that they can do for very little cost—or sometimes no cost at all—that will reduce their consumption and save them money,” says Zachary Hart, a senior program associate at the Institute for Market Transformation (IMT). Hart recently wrote a report titled “Benefits of Benchmarking Building Performance,” produced by the IMT and the Pacific Coast Collaborative.

Benchmarking has soared in recent years through programs such as the ULI Greenprint Center for Building Performance, a voluntary benchmarking initiative started by three dozen leading real estate owners, investors, and portfolio managers.

“I think the really good operators understand that this is important both to their tenants and to the environment, and therefore they are taking action,” says Helen Gurfel, executive director of the Greenprint Center. The Greenprint Performance Report, the center’s sixth annual report, released in September 2015, tracks energy consumption, water use, and waste diversion for 5,224 properties across 1.2 billion square feet (112 million sq m) of building space in 51 countries.

One tool commonly used in the United States and Canada to report benchmarking data is the Energy Star Portfolio Manager, introduced by the U.S. Environmental Protection Agency (EPA). The number of commercial properties entered into the Portfolio Manager system has more than doubled in the past six years to include more than 450,000 buildings and over 40 percent of U.S. commercial building space, according to the EPA. The online tool is used to capture data on energy and water consumption, as well as greenhouse gas emissions.

Studies have shown that buildings engaged in benchmarking tend to demonstrate reduced energy consumption. “It’s almost like stepping on the scale,” says Gurfel. “If you step on the scale and don’t like the number, you might make changes to get a better result.”

Policies Drive Change

A surge in new policies governing benchmarking and transparency in jurisdictions across the United States is expected to push participation higher. California and Washington state, as well as more than a dozen cities—including Atlanta, Austin, Chicago, and New York City—have instituted benchmarking and transparency policies for commercial and multifamily buildings. In addition, a number of cities and states have enacted benchmarking policies that apply to their own publicly owned buildings or to single-family properties, according to the IMT report.

Benchmarking is essential for moving the ball forward on energy efficiency and sustainability, says Barry Hooper, green built environment manager at the San Francisco Department of the Environment.

“In the absence of building-level performance data, we were attempting to navigate a big ship on hunches,” he says. “Data gives us an idea of the potential for ongoing improvement; it informs targeting and decision making.”

San Francisco passed new energy benchmarking and audit requirements in 2011. Its Existing Commercial Buildings (ECB) Energy Performance Ordinance requires annual energy benchmarking, periodic energy efficiency assessments, and public disclosure of benchmarking information for commercial buildings with 10,000 square feet (929 sq m) or more of heated or cooled space.

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(Greenprint/San Francisco Existing Commercial Buildings Performance Report)

San Francisco Existing Commercial Buildings Performance Report, a study of San Francisco’s benchmarking data gathered in October 2015 via a partnership between ULI Greenprint and the San Francisco Department of the Environment, revealed positive economic and environmental trends between 2010 and 2014, including energy use that declined by 7.9 percent and source emissions that fell by 17 percent among properties that consistently comply with benchmarking and auditing requirements.

Greenprint reports similar positive results within its portfolio of buildings. According to its most recent Greenprint Performance Report, on a like-for-like basis, 3,446 properties showed a 3.3 percent decline in energy consumption and a 2.7 percent decline in greenhouse gas emissions from 2013 through 2014. Also, nearly 1,000 Greenprint properties cut energy consumption by 11 percent and greenhouse gas emissions by 10.8 percent between 2009 and 2014.

In addition to benchmarking requirements, many of the ordinances now in place require building owners to take other steps, such as completing a periodic energy audit or retro-commissioning to make sure building equipment is functioning properly. Audits conducted at more than 800 buildings as part of the San Francisco ordinance requirements identified $60.6 million in opportunities for cost-effective energy efficiency investments—opportunities that would have a positive impact on net present value estimated at $170 million, according to the San Francisco performance report.

“Knowing where you stand is helpful. Knowing where you can go and the route to get there is an essential complement,” says Hooper. The potential identified in those 800 buildings is considerable, both in terms of investment potential and greenhouse gas emissions reductions and energy cost savings, he says. The data from those audits also reveal that even relatively high-performing buildings have plenty of opportunity to improve, he adds.

Boosting Participation Levels

Many of the large, institutional property owners and managers have been leaders in adopting benchmarking across their portfolios. The challenge now is getting some of the smaller buildings and smaller owners on board. “That is why benchmarking and transparency policies are important—because you are reaching those smaller ownership structures that are less likely to pick up [on benchmarking] on their own,” says Hart.

The IMT report highlighted a number of benefits of benchmarking that go beyond measuring kilowatt-hours. The focus on energy efficiency often results in behavioral and operational changes to drive reductions in energy consumption, as well as creates opportunities for increased government efficiency, job creation, and economic and environmental health. Specific to building owners, some of the primary benefits include:

  • a greater baseline understanding of a building’s energy use;
  • metrics to rank a building against others within a larger portfolio of assets;
  • a better understanding of how a building’s energy performance compares with that of its competitors; and
  • a foundation for an energy management plan to drive continuous performance improvement.

In addition, for high performers, energy efficiency can help boost property value and constitute a marketing advantage in courting new tenants.

Among the factors holding property owners back from benchmarking are limited time and resources, lack of education, or an owner or manager who simply has not made the time to do the benchmarking, notes Hart. Another barrier is overcoming the problem of information gaps: buildings can be very complex, and not all energy use is transparent to an owner or manager. For example, some tenant spaces are monitored separately, with use and data controlled by the individual tenant or tenants.

In the past, real estate owners have struggled to get energy data directly from the utility company. Greenprint is working on key initiatives to help its members extract data from utilities, and states are passing ordinances that mandate access to that information.

Jurisdictions with benchmarking and transparency policies also are working with their local utilities to provide whole-building data to owners—for instance, for the utility to provide to the owner of a multitenant building the energy consumption data for all the tenants, aggregating it without revealing anyone’s private data. “That has been tremendously helpful to get through that tenant/owner split issue,” says Hart.

California has passed legislation mandating that utilities, upon request, provide whole-building  data to owners of commercial buildings with three or more utility accounts and to owners of multifamily properties with five or more utility accounts. California, the first state to take such action, hopes the mandate will lower the barrier building owners face when trying to comply with the state’s mandatory benchmarking law, says Gurfel. The California law is to be implemented no later than January 1, 2017. Other jurisdictions with these utility requirements include Washington, D.C., for owners with five or more commercial or multifamily utility accounts, and Colorado, for owners with four or more utility accounts.

Ultimately, policies are not only aimed at encouraging benchmarking, but also at driving change by making the data available to the “consumer” or building occupants.

“When this data is available, it allows the real estate market to start including the value of efficiency as they make decisions about where they want to rent space or space that they want to buy,” says Hart. “So, embedding efficiency into the real estate evaluation process is the crux of benchmarking and transparency, and that’s where a lot of the benefits will come from in the future.”