2023 Winter Issue - 43

national Sustainability Standards Board's climate
disclosure rules is going to take standard setting,
consistency, and measurement to the next stage.
In addition, in many countries, building codes are
becoming more stringent around energy efficiency,
building design, and sustainability. As governments
become more proactive regarding their net zero
carbon policies, that will naturally drive people to
build more efficient buildings.
AARON JODKA: There has definitely been a
move toward ESG for investors-a strong interest
in acquiring, operating, and owning sustainable
assets. Other than LEED and Fitwel and some of
the other certifications, however, there is still some
opacity about how sustainable an asset really is.
Having a plan, a timeline, and definable goals is
really important. So municipalities, cities, states,
and regions are coming up with plans to reach
definable goals by a certain timeline-say, all buildings
achieving net zero emissions by 2050, which is
the target for Boston's Building Emissions Reduction
and Disclosure Ordinance [BERDO 2.0]. These kinds
of ordinances allow owners and future investors to
start planning.
HYON RAH: Right now, the three energy performance
standards that are most motivating building
owners to do something in the United States are
Washington, D.C.'s Building Energy Performance
Standards; New York City's local laws, including
Local Law 97; and Boston's BERDO 2.0. The key
to motivating building owners is to tie noncompliance
to negative consequences, like the fines for
violating New York City's regulations. I expect a lot
of other cities and regions are going to switch from
incentive-based energy performance guidelines to
strict mandates. The proposed SEC rule on climaterelated
risk, while not yet codified, has put public
companies on notice. And because of the Scope 3
carbon disclosure requirements, which involve emissions
from suppliers and service providers, we've
already been hearing from our clients who are not
public companies but who want to think through
and implement their pathway to net zero carbon.
What are the primary challenges in
moving toward greater standardization
in measuring and reporting climaterelated
physical and transition risks?
BROOKE: The key challenge seems to be data. We
need an industry collaboration agreement on what
data we are using to measure risk, how to get hold
of this data, and how to use it. A number of different
organizations have come up with different
standards, but not everybody wants to align 100
percent. They may each have their own agenda or
focus: some might be more focused on embodied
carbon, some on net zero, some on operational efficiency.
The other challenge is to balance technology
with reporting. There is a range of great technology
solutions out there, but a lot of them are created to
solve one individual problem or measure one aspect
of a building. We need a holistic building performance
model.
RAH: Three big challenges come to mind. First,
there is a mismatch between incentive structures
and actual climate-related risks, especially in highvalue
real estate markets. For example, places that
are highly vulnerable to floods, sea-level rise, and
droughts remain tempting prospects for businesses
to site industrial and office buildings because of
various tax and policy incentives. Second, there is a
lack of standardization in modeling methodologies
used to predict climate-related risks. The same site
can yield very different risk profiles depending on
the type of modeling or the vendor. Third, most risks
are calculated based on monetary damage, which
makes it difficult to fortify the areas where communities
are in a vulnerable position not just physically
but also financially. Based on the models currently
in use, a large area of very high risk but low monetary
value may not be categorized [as being] as
vulnerable as a small area of very-high-value properties.
Social equity and strong communities are an
integral part of sustainability, and we need to find
ways to do better.
WALRAVEN: The old adage still holds true: you
can't manage what you don't measure. Presently, it
is still extremely difficult to get whole-building data
WINTER 2023
URBAN LAND
41
2023 Winter Issue

Table of Contents for the Digital Edition of 2023 Winter Issue
