Citing the Evidence – the Benefits of Building Energy Disclosure Policies

It’s amazing how one report, when branded with one of the biggest names in academia (Harvard) and funded by a well-heeled special interest opposition group (the Greater Boston Real Estate Board), can cause so much misinformation to be spread about Boston’s new building energy disclosure ordinance. Benchmarking and disclosure policies allow access to information that enables the market to value and respond to building energy performance. It’s the same concept as nutritional labels on food and MPG labels on vehicles, recognized around the world as important consumer protection and awareness measures. In this month’s Governing article, “Does Energy Benchmarking Actually Lead to More Efficient Buildings?,”  the authors of the Harvard paper were quoted as concluding that there’s “no real evidence” that policies such as Boston’s ordinance result in “any changes whatsoever in energy use.” No changes, whatsoever?  To quote Wallace Shawn in The Princess Bride, that’s “Inconceivable!” Let me provide you with a list of reputable sources suggesting exactly the opposite: Benchmarking leads to more energy efficiency improvements in buildings:

• A recent study by the U.S. EPA of more than 35,000 benchmarked buildings across the nation found that those buildings reduced energy consumption by an average of 7 percent over a three-year time span.
• A 2012 report commissioned by the California Public Utilities Commission found that benchmarking was highly correlated with building energy improvements and management actions, and was a strong catalyst for customer participation in utility rebate and incentive programs.
• A 2011 industry survey by Building Operating Management magazine, of hundreds of facilities managers found that 70 percent of respondents used benchmarking information to “guide energy efficiency upgrade plans,” and 67 percent used it to “help justify an energy efficiency project.

Benchmarking and disclosure policies are good for the economy and create jobs:

• A recent study by the U.S. Department of Energy’s Energy Efficient Buildings Hub found that 77% of Philadelphia’s commercial building stock – or 7,000 buildings – need energy upgrades. Retrofitting them would generate more than $600 million in local spending and support 23,000 jobs.
• A recent survey of markets with existing benchmarking and disclosure laws found that local businesses were experiencing significant new demand for energy efficiency services and hiring new employees, driven by increased awareness on building energy efficiency opportunities.
• New research from England, and the most comprehensive of its kind to date according to that nation’s Department of Energy and Climate Change (DECC), suggests energy efficiency upgrades boost average home value by 14 percent.

Research also shows that labeling buildings with energy efficient or environmental design certifications, such as ENERGY STAR or LEED, results in higher occupancy rates, rental rates, and sale values in the marketplace than comparable buildings. It’s important that we not perpetuate one study as the “be-all and end-all” authority on building energy disclosure policies. Instead, let’s focus on how now for the first time ever, Bostonians will have access to building energy and water usage data to help inform important real estate investment decisions, as well as track and manage building performance over time. It’s no wonder commercial asset managers find reporting and disclosure policies good for their businesses, even if real estate brokers have been hesitant to see the benefits.