skip to main content

→ Top Stories:
Fracking
Safe Chemicals
Defending the Clean Air Act

Wendy Fok’s Blog

NRDC Advises on NYC Mayor's Carbon Challenge to Help Commercial Tenants Save Big

Wendy Fok

Posted April 18, 2013 in Curbing Pollution, Green Enterprise, Solving Global Warming

Tags:
, , , , ,
Share | | |

At last, tenants take center stage.  Today, Mayor Bloomberg announced 10 leading corporations have joined the Mayor’s Carbon Challenge, committing to reduce energy use and carbon emissions in their leased space by 30% in the next ten years.  In total these tenants occupy more than 17 million square feet of office space and employ about 70,000 people in New York City.  Tenant participants include Goldman Sachs, JP Morgan Chase, Bloomberg LP, Google, JetBlue, PVH, Credit Suisse, Deutsche Bank, American International Group, and BlackRock.

NRDC’s Center for Market Innovation is a close advisor to the City on the challenge, sharing the process and results from CMI’s new High Performance Tenant Demonstration Project to incorporate practical strategies to meet energy reduction goals.  Our unique approach—a Clinton Global Initiative commitment, supported in part by Goldman Sachs—helps reduce energy use in a way that benefits tenants, building owners and New York. 

In time for the announcement today, NRDC also released the first full tenant demonstration case study for this project, revealing great promise for the commercial building market at large to adopt it.

The case study shows that the first tenant to work with us to undertake our new approach to energy savings—Empire State Building tenant and global consumer goods company Li & Fung USA—is projected to reduce energy use in its office space by nearly 30% compared to a standard space, saving an estimated $1.8 million over the course of the 15-year lease and paying off the investment in 3.5 years.

What makes our approach so unique is that it’s the first time anyone has ever focused on reducing and quantifying energy use in tenant space—which accounts for over 50% of a commercial office building’s total energy consumption. This means a high performance building that has already undertaken a deep building retrofit as the Empire State Building has—can reduce energy costs even further through tenant improvements.

The result is a win-win for tenants and building owners.  Tenants, who pay for the upfront costs and who are billed for actual metered energy use, get to pocket the resulting savings over the course of their lease.  Owners, improve the overall energy performance and Energy Star rating of the building, making brokers and prospective tenants aware of the value of leasing space in a building that prioritizes superior energy performance.

To capture immediate tenant energy savings, the ideal time to incorporate the process is during the space selection, lease negotiation, and design of a new build out or existing space renovation.  Incorporating an integrated engagement and quantification process, as described in CMI’s tenant resources, optimizes energy performance over the course of the occupancy term.

Key elements of this process (called the Lease Cycle Energy Optimization Process) includes knowledge exchange between building and tenant stakeholders, development of a list of potential energy performance solutions (Menu of Measures) and analyzing sets of ‘good’, ‘better’, and ‘best’ energy/cost saving packages (addressing lighting, plug and HVAC loads) during the design process. 

The results are documented in a Value Analysis that allows the leadership and project team to make smart informed decisions based on both organizational priorities and investment return.  Through this energy optimization development/implementation process, ongoing measurement and actionable troubleshooting, millions of dollars in energy waste will be avoided.  In addition, tenants will cut emissions, improve air quality, and encourage a sustainable economy-- an all around winning strategy.

A huge opportunity from our tenant initiatives is the potential creation of a framework for collecting annual energy data and tenant space use information that could serve to help develop a nationwide tenant recognition program. 

Mayor’s Carbon Challenge participants benchmark and report information including:

  • Background information about tenant and facilities;
  • Benchmarking results (individual space/portfolio energy use intensity used, number of full time employees, water use, and building Energy Star score);
  • Inventory of annual carbon emissions;
  • Completed actions and energy efficiency projects;
  • Innovative projects undertaken;
  • Strategy to meet 30% emissions reduction goal.

CMI is proud to be leading the way with the Mayor’s Carbon Challenge to improve energy use in tenant spaces, buildings, and multi-city real estate portfolios at scale.  The results from our complementary efforts encourage other tenants, both big and small to take action, reap the financial rewards and be recognized for it.

 

Special thanks to Jenna Tatum of the Office of Long-Term Planning and Sustainability for encouraging tenants and coordinating the NYC Mayor’s Carbon Challenge.

Share | | |

About

Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

Feeds: Wendy Fok’s blog

Feeds: Stay Plugged In