It seems to make sense that the higher the occupancy of a building (commercial or
residential), the higher the energy use. More people in a building means more activity.
Well, COVID taught us that this is not totally true. While office buildings were shut down
during pandemic lock-downs to near zero activity, building energy usage declined only
by 10-30%. In New York City, even when there was a partial return of activity
(commercial occupancy decline averaged 85%), electricity use was down only 20-40%.
Are electricity usage changes driven by tenant activities or common area requirements?
Studies indicate a little of both. Several buildings showed a reduction in electricity usage
in the upper 20’s to 40% in March and April 2020, compared to the year before, when
we had the virtual complete COVID lock-down. These buildings showed reductions in the
teens percent in October and November 2020 compared to one year before, as tenants
began to return to their offices.

Why? Because there are basic needs that use energy that must occur at all times, such
as heating and cooling. OK, without staff in an area, one can manipulate a thermostat to
a more beneficial setpoint, efficiency-wise. But not running one’s boiler or AC units is
not good for the building or business either. In the summer of 2020, I performed an
energy audit of an office building, and most offices were empty. One particular business
that was empty that I studied had turned off their cooling system totally to save costs. It
was a very hot day outside and the indoor temperature as I walked around was 86⁰F!
This is not good for the building or business. With humidity uncontrolled, this can cause
the growth and proliferation of mold and potentially damage equipment, adding to the
woes of the business when staff begin to return. While one can set a high summertime
setpoint to save on cooling if nobody is present. But you need some conditioning to
prevent these effects. Of course, all this becomes irrelevant if even one person returns
to the office. The thermostat must be set and equipment operated to keep that person
comfortable even if he/she is the only person in the office.

So, where do we go from here? This demonstrates that reduced activity does not result
in a similar reduction in energy usage and greenhouse gas emissions. While the first
year of the COVID pandemic led to a net decrease in greenhouse gas emissions, that
was short-lived. As we began to recover economically, “carbon” emissions grew greatly,
too. And it shows that neither landlord nor tenant is “at fault” on this matter. This shows
that site-specific smart planning for energy efficiency and tenant / landlord collaboration
can effectively reduce energy consumption and not just stopping an operation.
CCES has the experts to help your business create and implement smart, long-term
strategies to reduce your energy usage and costs that will stand the test of time.
Contact us today at karell@CCESworld.com or at 914-584-6720.

There has been lots of discussion and policy documents about Environment Social & Governance (ESG) disclosures made by public companies. While the U.S. Securities & Exchange Commission (SEC) has discussed the importance of accurate representations of ESG information to potential investors, one wondered how vigilant the SEC would enforce such requirements. On April 28, 2022, the SEC’s Climate and ESG Task Force brought its first action in the U.S. District Court for the Eastern District of New York against Vale S.A. (“Vale”), a large mining company, alleging violations of federal securities laws arising out of false and misleading statements in connection with the safety and stability of dams built to hold toxic waste produced in mining operations.

In January 2019, Vale’s Brumadinho Dam in Brazil collapsed and released millions of cubic tons of toxic waste, directly killing 270 people and contaminating a nearby river. Vale suffered significantly financially as a result. The SEC alleges that Vale knew that the dam did not meet internationally recognized dam safety standards, yet stated in its ESG disclosures that it adhered to the “strictest international practices” of dam safety and that 100% of its dams were certified to be in stable condition. Vale denies the charges and is challenging the action.

Vale manipulated dam safety audits, obtained fraudulent stability certificates, and regularly misled local governments, communities, and investors about the safety of the dam in its ESG disclosures, including sustainability reports. They found the ESG disclosures to be false and misleading by downplaying risks of disastrous financial consequences should any of its high-risk dams collapse.

This shows that the SEC is reading sustainability reports, as well as other ESG disclosures and is willing to use statements in such documents as bases for enforcement actions alleging misrepresentation. Companies should take note and review its own procedures to ensure accuracy and ability to defend and verify when preparing submissions, such as ESG-required disclosures.

Please note that this article, containing legal information, was prepared by a non-attorney. Therefore, before making any decisions on these matters retain and utilize experienced legal counsel in this area. CCES has the technical experts to help your environmental program. Contact us today at 914-584-6720 or at karell@ccesworld.com.

New York City’s onerous Local Law 97 is believed to be the first law in the country requiring building owners to meet stringent greenhouse gas emission limits or else face major fines. Six-figure fines are likely – for many buildings!  LL 97 goes into effect in 2024 and is definitely being watched by other governments who may duplicate it.

When initially promulgated in 2019, most building owners ignored it. Its provisions were 5 years away. Now that we are less than 2 years away and, it seems, many building owners seem to be panicking. I was in a Zoom meeting where attorneys were discussing how to modify leases to require the tenants to pay part of any LL 97-caused fines, since tenant energy usage is part of the equation. OK. But wouldn’t it make more sense to spend time first seeing where your building fits in? Is it a likely candidate for non-compliance in 2024 based on current energy usage? Or is the building on safer ground? LL 97 was designed by NYC such that – they believed – 80% of existing buildings would not have to make modifications (or only minor ones) to comply in 2024. Even if that assessment was wrong, it is probable that your building is one of the majority that will comply with the 2024 GHG emission standards. Determine that.

How? Take the total energy usage of the building for last year; that is, total electricity (common areas and tenants), natural gas (boiler and kitchens), oil, and purchased steam. Note what they were in total in 2021. Convert them to GHG emissions, divide by the square footage and compare it to the rate appropriate for your building (there are 10 unique building categories). If your actual 2021 GHG emissions per square foot exceeds the 2024 standard, you have a potential problem. Even if that value meets the 2024 standard, but barely, you have a potential problem, too. What if 2024 has a very hot summer or cold winter and you have to use more energy for comfort? What if your tenant stock changes between the years and they need more energy? So you not only want to meet your 2024 standard, but meet it with a nice buffer for these contingencies.

For each building that appears to not be in compliance by 2024 or does not have much of a buffer, you need to do something now. Not in a few weeks or a month. But act now! The things you may have to do to comply or lower potential fines can take a year or more to have in place and may not be ready by the beginning of 2024 (you know, supply chain issues).

So, what should you do if you have to do something for LL 97? Don’t deny the issue and don’t delay. Have an energy audit performed by an experienced professional to determine smart and site-specific strategies to reduce energy usage. Look through the report; study the options. Then don’t sit on it. Take action (!) on one or more options to get your energy usage down to acceptable levels. Yes, you can start with “low hanging fruit”, but don’t delay bigger projects because of the time it may take for equipment to be procured, assembled, and installed. For example, building envelope upgrades are not “sexy”, like shiny new equipment and may be expensive upfront. But such upgrades will reduce energy use (i.e., lose less heat that you burn fuel to make) significantly and, with that, GHG emissions.

Also, when working with a contractor or energy engineer, don’t forget to take advantage of rebates and other incentives (typically 30 – 50% of the cost) available from your utility or State government for the upgrades. They want it done, too. And if you do not have money upfront, PACE financing offers competitive rates and easy payback terms specifically for energy upgrade projects.

OK, New York City building owner or property manager: you have been warned. LL 97 is coming very soon and the time to assess where you stand and act, if you need to, is NOW!

CCES has the experts to help you assess where your buildings stand vis-à-vis LL 97 and to project manager any series of energy upgrades to comply or lessen fines. Contact us today at karell@ccesworld.com or at 914-584-6720.

Several studies show not only environmental benefits but also direct financial benefits of “greening” one’s offices, such as having a positive impact on worker productivity. One study showed a 1% increase in sick days costs a business about $2,000 per employee per year. Losing an employee could cost a business even more between finding a replacement, hoping he/she is as good as the one that left, and training.

Here are seven key areas where green features in offices and work places have been shown to improve occupant productivity or health: 

1. Indoor Air Quality. The quality of workplace air is a significant driver of productivity, given the cocophony of compounds that workers are potentially breathing in, between off-gases from carpeting, furniture, walls, and operating equipment. Studies show that improved ventilation can increase productivity by as much as 11%. 

2. Thermal Comfort. Thermal comfort is also crucial to productivity, with performance dropping 4% when the room is too cool and 6% when it’s too warm. An issue of concern is how to get workers with different temperature preferences to agree on a thermostat setting. Studies have also shown that by giving occupants some control over workspace temperature results in a greater willingness to accept a wider temperature range.

3. Windows. Windows are the worst part of the building envelope when it comes to insulation and energy efficiency. On the other hand, studies have found that worker satisfaction increases when they have access to windows. Therefore, it is important to balance out these factors in designing office space.

4.  Plants. Offices that install and maintain plants near workspaces and even views of nature from windows results in higher productivity than depriving workers of a connection to nature. 

5. Noise. Possibly the greatest driver of productivity is noise and acoustics, with studies showing up to a 66% drop in productivity when workers are exposed to various types of distracting background noise. Installing physical design features and providing reminders to building occupants can be effective at reducing background noise in workplaces. In addition, consider window film or additions which better block the noise from outside the workplace, such as traffic.

6. Exercise. This appears quite difficult. How can a company get people to move or exercise when they are doing a job that involves sitting or standing by machines? There are ways. One – for multi-level businesses – is to do away with elevators and require workers to go up and down stairs to meet with each other. Another is to put the kitchenette or other places to meet a certain distance away from worker’s desks, making them do a little more walking to get that coffee. Or have fewer general printers and place them strategically to make workers travel to get their printouts. This is all for the sake of getting people out of their seats and to move a little every day. 

7. Location. What’s the old joke about the three most important factors for a facility is “location, location, location.” Well, that’s true for productivity, too. The presence of convenient amenities such as childcare centers, shops, gyms, and drug stores have an impact on occupant productivity.

CCES has the experts to help your facility maximize your indoor air quality and amenities to improve comfort and productivity. Contact us today at 914-584-6720 or at karell@CCESworld.com.

Although this newsletter emphasizes Climate Change and air pollution, we should not forget that plastic pollution of our oceans and waterways costs us greatly. As of 2021:

• Over 300 million tons of plastic are produced every year for use in a wide variety of applications.
• Over 14 million tons of plastic end up in the ocean every year. Plastics make up 80% of all marine debris found in surface waters and deep-sea sediments.
• Marine animals ingest or are entangled by plastic debris, which causes a huge number of deaths.
• For humans, plastic pollution threatens food safety and quality, health, and tourism. The continual manufacturing of plastic (fossil fuels) contributes to climate change.

Therefore, there is an urgent need to explore new and existing legally binding agreements to address marine plastic pollution. This means developing disincentives and regulation against single-use plastic, such as to tax retailers who sell items packaged in single-use plastic or ban or discourage the manufacturing of goods packaged in it.

The EU implemented a Directive on single-use plastics, which aims to prevent and reduce the impact of certain plastic products on the environment. Single-use plastic products cannot be placed on the markets of EU Member States if sustainable alternatives are available and affordable. This applies to single-use plastic products, such as cotton swabs, cutlery, and straws.

Private enterprise is contributing, too, with over 70 leading businesses and financial institutions calling for a legally binding UN treaty on plastic pollution, presented to the UN Environmental Assembly (UNEA 5.2) on March 2, 2022. A committee has been formed to develop global binding regulations to discourage plastic pollution that:

• Sets a clear direction to align governments and businesses behind a common understanding of the causes of plastic pollution and the danger of such pollution to all societies and a shared approach to address them. Because ocean plastic pollution is a global problem, there should not be a patchwork of rules and solutions, but consistent standards achievable by reasonable practice and cost;
• Includes both upstream and downstream policies, aiming to keep plastics in the economy, where necessary, but out of the environment and reduce virgin plastic production and use; and
• Provides a clear, robust structure to ensure participation and compliance by all.

The goal of the effort is to encourage research and investment to scale innovations and improve implementation in the countries and industries most in need of change.

While CCES does not work in the area of plastic pollution, we can help you in other environmental areas meet and comply with current rules and look for economical ways to be more “green” to impress clients and customers. Contact us today at 914-584-6720 or at karell@CCESworld.com.

New York is working to meet its aggressive Climate goals of reducing greenhouse gas (GHG) emissions by 40% by 2030 and by 85% by 2050 from a 1990 baseline; 100% zero-emission electricity by 2040, with 70% renewable energy use by 2030. The latter is a challenge as NY State currently gets only 27% of its power from renewable sources.
To achieve these goals, New York must both manage their current energy usage and work to green the energy systems of its two major emitting sectors, buildings and transportation. This effort is being led by the NY State Energy Research & Development Agency (NYSERDA), which coordinates efforts and works with private sector firms to implement relevant projects, such as two planned pipeline projects to bring clean energy from where it is being developed, upstate NY or Canada to the area where most energy is used, the New York City area.

NYSERDA’s analysis shows that in 20 years New York’s peak energy demand will shift from the summer months (air conditioning) to the winter months, as electricity-using heat pumps are projected to replace many fossil fuel-combusting boilers. As a result, New York must increase wintertime electricity production, such as using peaker plants in the winter. New York City passed legislation, banning gas hook-ups of new buildings starting in 2026, and New York State is considering extending this as a statewide requirement. By reducing and eliminating natural gas and gasoline and replacing them (in autos and in buildings) with electrification, renewable power can supply the electricity making energy cleaner in NY State.

What is motivating New York’s move to cleaner energy? Being on the right path concerning Climate Change is certainly one factor. However, the Governor points to clean air and long-term reliability (not being dependent on oil or gas wells) as being another reason to move toward using renewable energy sources.

Something to look forward to, in terms of practices and incentives, given these policies and approaches, New York State and its utilities will offer robust incentives for projects that encourage the move away from fossil fuels toward electrification (such as heat pumps) and perhaps will emphasize less improvements in energy efficiency (such as LED lighting incentives), as any energy efficiency upgrade should pay for itself well and does not need incentives.

CCES has the experts to help you plan and succeed with an energy upgrade program (cleaner fuels, electrification, energy efficiency or a combination) that is best for your long-term operations and costs and obtain the maximum available rebates and incentives from NYSERDA and local utilities. Contact us today at 914-584-6720 or at karell@CCESworld.com.

By Nicholas Zuba, Director, PACE Policy and Programs at CleanFund

The EIC Open PACE Program (C-PACE) is a financing program for energy-efficiency projects, available  in many states. A major barrier for a building owner to implement energy-saving improvements is the need for cash to cover upfront costs. C-PACE helps building owners with the financing to make these improvements – and reap the benefits – sooner. These costs are repaid over time through an assessment placed on the improved property, similar to tax assessments like water, sewer, or other special district liens. To date, many, but not all states, municipalities, and counties have opted into the C-PACE program.

Program Parameters:

The following information summarizes the program.

Recent program changes and improvements to remove municipal risks:

There have been notable changes to the C-PACE program in NY, including the following:

• Municipalities are no longer required to provide a financial backstop for any delinquent C-PACE payment
• Removed the cap on C-PACE financing amount based on property value
• New construction enabled for the program to improve new builds

Program benefits for municipalities, residents, and property owners:

• Helps stabilize tax base for the municipality, because energy-saving improvements will increase property values, making property owners more inclined to keep their businesses in town rather than move to less costlier  communities
• Provides attractive financing for economic development that a municipality can use to attract new businesses,  including multi-family property developers
• Reduces energy costs for property owners, enabling them to reinvest money into their businesses or  make multifamily properties look more attractive to tenants (i.e. improve common spaces)
• Helps reduce fossil fuel consumption and by extension reduce the municipality’s greenhouse gas emissions caused by commercial properties, one of the biggest contributors to the area’s carbon footprint
• No cost to local taxpayers, as the processing costs incurred from lien filings will be offset by fees paid to the municipality.

Nicholas Zuba is the Director of PACE Policy and Programs for CleanFund, a direct lender focused exclusively on the commercial property sector. Nicholas earned his Master of Public Administration degree from Cornell University in 2015, focusing on environmental sustainability program design and management. He earned his Bachelor of Arts degree in Political Science from Ithaca College in 2006. He can be reached at nzuba25@live.com.

The renewable energy and energy efficiency sectors are booming. Fueled (sorry for the pun) by growing utility and government incentives, regulations, high energy prices, and corporate demands to be more “green”, the industries are growing. However, like other general projects, construction of necessary renewable and other energy technologies is impacted by supply chain issues, affecting both time and cost.

Shortages of materials and slowdowns in transport are leading to delays, higher costs, and disputes between contractors, subs, and customers. This is particularly true for renewable energy and energy efficiency projects. Here are some key issues.

• Availability of key raw materials: Certain raw materials required to build solar panels or other components are limited in availability, increasing the risk of supply chain disruption.
• Limited manufacturing: Steel and other more components of less specialized equipment are also in short supply. An assembler of cooling towers told me he had to suspend business in this area because only one material was in short supply. But without it, they could not make the cooling towers per needed specifications.
• Transportation:  Raw materials must not only be mined and treated but also transported to the appropriate assembly plant or retailer. It has been well publicized that there is a shortage of truck drivers, boat operators (for barges), and dock workers to unload boats, trains, or trucks. Materials have sat around for many days at many ports around the world.
• ESG: Although renewable and energy efficiency projects have positive impacts on the environment, they often rely heavily on the mining or fabrication of certain raw materials which may have great negative impacts. They can also affect workers, local communities, and the nearby environment. Particularly for firms with strong social sustainability standards, some projects may no longer be a go.

What can you do to keep projects moving forward to help you comply or otherwise be more efficient?

• Review projects and consider which raw materials are critical and alternative technologies if an initial approach may not work because of shortages. Determine which equipment may undergo high price changes or shortages and communicate this to colleagues in case it results in delays or cost overruns.
• Suppliers should communicate all potential delays or cost bumps with customers before they happen. It may be in the customer’s interest to be proactive and reach out first. Given these recent problems, before hiring a supplier, a customer should keep in mind the bidders’ experience, reliability, and ability to communicate during difficult times, not just the cheapest price or best equipment.
• Customers should consider some type of performance insurance in case a certain piece of equipment cannot be supplied on time or at all. In addition, contracts should be reviewed to contain appropriate representations, warranties, and indemnities, to minimize potential losses that may arise due to projects being delayed or upended altogether. Speak to a qualified attorney about this.
• Customers should understand the regulatory risk they face if the equipment is not in place by a certain time, and both warn and negotiate with the regulatory agency(ies), to reduce liability because equipment is not in place in time for reasons beyond the customer’s (operator’s) control, such as supply chain issues. Just one example: I had a client (pre-COVID) who could not meet a regulatory deadline due to a part being backordered. I showed the agency the backorder a few months in advance and said they would install it when it arrived. The agency granted the facility an extension and, in fact, the equipment was installed soon after the original deadline.

CCES has the experts to help your firm design and execute energy efficiency and renewable projects to address and minimize risk factors of supply chain issues by suppliers. Contact us today at 914-584-6720 or at karell@CCESworld.com.