As state and local governments aim to combat greenhouse gas emissions in the real estate sector, Building Performance Standards (BPS) have gained momentum. The sooner both landlords and tenants unite on their sustainability efforts, the greater the combined impact will be.

As state and local governments aim to combat greenhouse gas emissions in the real estate sector, Building Performance Standards (BPS) have gained momentum. This growing momentum for the adoption of BPS throughout the United States suggests policy adoption is not slowing down anytime soon. Several cities have stipulated strict financial penalties for policy violations, which will help encourage accountability and help accelerate decarbonization.

To incentivize tenants to join in the sustainability efforts and therefore minimize policy violations for landlords, some landlords have initiated green lease clauses. By incorporating green lease clauses, the goal is to align the interest of landlords and tenants, encouraging them to work together toward sustainable, lower-carbon and energy-efficient building operations.

BPS policies are here to stay, and the penalties for non-compliance are likely to increase, just as the costs for climate change impacts are expected to rise without implementing mitigation and adaptation strategies. The sooner both landlords and tenants unite on their sustainability efforts, the greater the combined impact will be.

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