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CONTRIBUTORS

Tim Wang, Ph.D.

Head of Research,
Clarion Partners

Preview

Sustainable development goals have become a greater priority for the commercial real estate (CRE) industry since the 2015 United Nations (U.N.) Paris Agreement established a global net zero goal (NZG) by 2050. Since commercial and residential buildings account for approximately 40% of global carbon emissions, property owners play an integral role in achieving carbon reduction goals.1 The Inflation Reduction Act (IRA) of 2022 signed into law by President Biden introduces additional policies to help achieve global NZGs.

The IRA is viewed as the most powerful policy to date to encourage energy efficiency and renewable energy capital investment in the built environment. These future-proofing best practices are highly sought after by many tenants and can improve the overall building value. Furthermore, it has been proven that more sustainable assets usually have better operational efficiencies and investment performance over the long-term.

In this paper, we look at a few of the largest existing and planned clean energy related programs, and how legislation has better enabled CRE investors to leverage government incentives to cost-effectively decarbonize assets.

Endnote

  1. Source: Jones Lang LaSalle. 2023.

 

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