Page 39 - RC21 EDGE Summer Issue

an enforcement task force focused on climate and ESG issues, in the Division of Enforcement.
Federal priorities will be catching up with state and local policy and regulation, which has been more aggressive on energy and climate regulation. In total, 24 states and the District of Columbia have established economy-wide GHG emissions targets, many of which align with a 50 percent reduction in carbon dioxide by 2030 and net- or near-net zero by 2050. More jurisdictions are looking to regulatory frameworks like New York City’s Local Law 97 and the DC Clean Energy Omnibus Act, which build on mandatory benchmarking and disclosure of building energy and/or carbon use to set declining emissions caps that existing buildings must meet.
Investors are also driving the imperative to address climate impact. In early 2020 the CEO of BlackRock, Larry Fink said, “climate risk is investment risk” and he has since noted that a fundamental reallocation of capital
to sustainable investments has begun. Investors are
no longer asking “Do you have an ESG program?” They are now saying, “To be investible, companies have to
be taking action, demonstrating performance, and be
transparent.” The focus of the investment community brings new scrutiny on the rigor and credibility of commitments and reporting, and pressure on the need to converge on a single standard for reporting.
Adding to the business imperative, more and more companies (building tenants) are making corporate net- zero commitments and requiring that their leased space meets these goals. Almost a quarter of global Fortune 500 companies—representing $8 trillion in revenue and 18 million employees—have made commitments to be carbon neutral by 2030. Tenant space requirements are evolving from voluntary leadership designations (such as ENERGY STAR or green building rating) to buildings that are operated under climate commitments that align with their own, with transparent reporting that can be incorporated into their corporate climate reporting.
This growing pressure from tenants, investors, and regula- tors, as well as more stringent calls for transparency and demonstration of performance can be overwhelming. But there is a best-practice process and frameworks to follow, as well as examples of owners and operators who have
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