Building Performance Standards & Transparency

Overview

Building energy policies generally fall into two main categories: Benchmarking & Transparency Laws (reporting data to leverage market forces) and Building Performance Standards (BPS) (requiring actual improvements to avoid fines). While New York City’s Local Law 97 is a famous example of a Performance Standard, many jurisdictions globally have successfully implemented variations of these policies to decarbonize the built environment.

Policy Levels: The Framework

Policies can be categorized by their mechanism and stringency:

Level	Mechanism	Description	Examples
Level 1: Disclosure	“Report your usage publicly.”	Requires owners to report energy data. Relies on market shaming and tenant demand to drive efficiency.	Chicago, Philadelphia, California, UK, Australia.
Level 2: Audits	“Report usage + get an inspection.”	Adds a requirement for periodic energy audits (e.g., every 10 years) to identify savings opportunities.	NYC (Local Law 87), San Francisco, Los Angeles.
Level 3: Performance	“Hit this target or pay a fine.”	Sets legal limits on energy use or emissions. Buildings must improve or face significant financial penalties.	NYC (Local Law 97), Tokyo, Washington D.C., Boston, St. Louis.

Global Case Studies: Performance Standards (Mandatory Cuts)

These jurisdictions have moved beyond data collection and legally require buildings to hit specific efficiency targets.

Tokyo, Japan: The Pioneer

• Policy: Tokyo Cap-and-Trade Program (Launched 2010).
• Details: The world’s first urban cap-and-trade scheme targeting buildings. Large commercial/industrial buildings must reduce CO2 emissions by a set percentage (e.g., 27%) vs. their base year.
• Result: Over 90% of facilities met targets by the second phase, largely through operational improvements rather than buying credits.

Washington, D.C., USA

• Policy: Building Energy Performance Standards (BEPS).
• Details: Buildings falling below the median Energy Star score for their property type enter a “compliance cycle.” They must reduce energy use by 20% or implement a specific list of energy-saving measures.

Boston, Massachusetts, USA

• Policy: BERDO 2.0 (Building Emissions Reduction and Disclosure Ordinance).
• Details: Updated in 2021 to set declining emissions caps. By 2050, all large buildings must be net-zero.

Denver, Colorado, USA

• Policy: Energize Denver Ordinance.
• Details: Sets targets based on Energy Use Intensity (EUI) rather than just carbon, requiring buildings to reach a specific energy performance level by 2030.

Global Case Studies: Disclosure & Labeling (Market Shaming)

These jurisdictions rely on transparency to “grade” buildings, allowing the market (tenants and buyers) to punish inefficient properties.

European Union (27 Countries)

• Policy: Energy Performance Certificates (EPCs).
• Details: Whenever a building is sold or rented, it must have an EPC (rated A to G).
• Update: The “Renovation Wave” strategy requires member states to renovate their worst-performing (G-rated) buildings to at least an F or E class by 2030.

Australia

• Policy: Commercial Building Disclosure (CBD) Program.
• Details: Requires sellers/lessors of office space to disclose a NABERS Energy rating (1 to 6 stars).
• Result: Often cited as the world’s most successful disclosure policy. High-rated buildings command significantly higher rents, driving a voluntary “race to the top.”

California, USA

• Policy: Assembly Bill 802.
• Details: A statewide mandate requiring owners of buildings over 50,000 square feet to report energy use to the California Energy Commission annually.

Implementation Strategy: The Compromise

To manage pushback from real estate stakeholders while ensuring progress, a Phased Implementation Timeline is recommended:

1. Years 1-3 (Level 1): Mandatory Disclosure only. Build the data baseline and allow owners to understand their performance.
2. Sunset Clause: Legislation automatically triggers Level 3 (Performance Standards) after Year 3.
3. Year 4+ (Level 3): Mandatory caps take effect. This gives owners time to prepare and retrofit but guarantees regulatory action.