With building owners in dire need of practical roadmaps to improve efficiency, contractors need to be ready to act as the bridge between climate aspirations and functioning buildings.  

Clear Goals, Clear Picture 

Make no mistake, this is a daunting task, and the first step shouldn’t focus on equipment, but rather on alignment. This means establishing clear, measurable goals, and understanding how those intersect with practical, broader business priorities.  

“Establishing clear targets is an essential starting point. These goals provide the foundation for strategic decision-making and help organizations prioritize upgrades across their systems and infrastructure,” said Jennifer Freres, global product manager, centrifugal pumps, Xylem’s Bell & Gossett. “Electrification and efforts to reduce emissions also play a key role in improving energy efficiency. Reducing reliance on fossil fuels, which contribute over 75% of global greenhouse gas emissions, and shifting to electricity as a primary fuel source, can make a significant impact. Projections suggest that combining reduced fossil fuel use with clean-source electrification could cut U.S. greenhouse gas emissions by 50% or more by 2035.” 

The next step, she said, is building a full picture of an organization's emissions through an audit, which can uncover the conditions of existing assets and highlight deficiencies.  

DRIVING INVESTMENTS: Regulations remain a stronger driver for decarbonization, but companies are also starting to realize efficient solutions have great potential for ROI. (Courtesy of Trane)

“Digital tools that integrate with building management systems and smart technologies like remote monitoring solutions, are also helping drive progress, helping enable teams to significantly improve operations and achieve environmental goals in a cost-effective way,” Freres said. “Additionally, sharing this progress openly with stakeholders can support long-term emission reduction targets. Taken together, these steps create a strong foundation for creating a water secure future and preparing organizations for success.” 

Mark Lessans, senior director, sustainability and regulatory affairs at Johnson Controls, said by installing high-efficiency HVAC equipment such as electric heat pumps, as well as integrating digital technologies and leveraging net-zero services, organizations can optimize their buildings and subsystems for both the short-term and long-term.   

“We’re seeing more companies adopt digital platforms, such as OpenBlue, our suite of connected solutions, as well as service-based solutions like OpenBlue Net Zero Buildings,” Lessans said. “As part of corporate decarbonization strategies, these types of solutions can help companies reliably reach decarbonization and renewable energy goals while optimizing building performance.” 

With 80% of existing buildings expected to still be in use when the 2050 net-zero benchmark is reached, retrofits are essential for widespread decarbonization to be successful; however, this has posed a significant challenge due to the high-temperature hydronic infrastructure typically present within these buildings.  

“Innovative solutions such as the York model CYK and YVWH Water-to-Water Heat Pump Chillers can meet the high-temperature requirements necessary to remain compatible with existing building infrastructures and are 3-5 times more efficient than a traditional boiler and chiller combination,” Lessans added.  

Andy Merrill, vice president, energy services, Trane, suggested a three-step approach to begin the conversation: 

1. Define your emissions reduction goals and understand what other priorities you need to balance as you pursue those goals (e.g., financial goals, stakeholder/shareholder priorities, tenant/occupant experience, brand, and reputation building). This will help identify synergies between strategic initiatives and understand tradeoffs as you look at investments and timelines. 

2. Identify a provider that you can trust to help you manage the decarbonization process from initial baselining and data gathering to prioritization and budgeting/funding, to implementation and measurement.  

3. Consider the whole portfolio. Many companies will look at decarbonization as a site-by-site series of projects, but that can lead to lower-impact projects at one site getting prioritized and funded over higher-impact projects for the overall business. Taking a more holistic approach will enable businesses to maximize impact while managing investment dollars in a way that yields the best results. 

What’s Driving the Movement? 

Several recent actions taken by the Trump Administration and Congress have suggested that the top-down support for decarbonization is waning, but the market continues to move in that direction regardless.  

Merril said while regulations remain an investment driver, they want customers to also understand the business benefits for investing in modern, more efficient solutions that provide profitable returns on their investments, in addition to compliance with regulations. 

“Organizations can capitalize on a variety of incentives when adopting policy guidance or complying with regulations, helping offset project or operational costs or even provide profitable returns in some cases,” Merril said. “Incentives allow business owners to tailor an energy plan that aligns with their organization's goals and resources while receiving support through a variety of funding options and incentives.” 

Lessans said the most significant factors influencing their customers include decarbonization targets, evolving regulations such as building performance standards, and compliance standards such as G36 and artificial intelligence-enabled predictive analytics. 

“As these trends converge — and compete for our customers’ attention — we’re seeing an increasing interest in the full lifecycle approach to building designs and retrofits,” Lessans said. “They’re optimizing their properties with high-efficiency HVAC systems, smart automation, digital solutions, and innovative services that benefit each stage of the building’s life — from installation and commissioning to performance and maintenance to optimization and upgrade — rather than simply optimizing one area or stage of the lifecycle.” 

Using this approach, building owners can address multiple priorities simultaneously, while optimizing performance for occupants, meeting decarbonization goals, and remaining competitive.  

Freres said she’s still seeing regulations at the state and local level continue to shape the pace of emission-reducing efforts. Building owners and operators are driving lasting change in the commercial buildings sector with their own ambitious sustainability goals.  

“Responding to stricter energy and environmental codes, like New York City's Local Law 97, which requires large buildings over 25,000 square feet to reduce emissions 40% by 2030 and 80% by 2050, building owners and operators are investing in high-performance HVAC and plumbing systems and energy management and monitoring systems to optimize building performance and reduce energy consumption,” Freres said.  

By keeping up with changing regulations and knowing how to apply emerging technologies, contractors can help clients find cost-effective solutions that meet today’s requirements and support long-term goals for resilient communities. Collaboration between developers, owners, and manufacturers will also be key to keeping projects moving and building momentum across the industry. 

The Long Game: ROI Versus Upfront Capital 

The long-term ROI of lowering emissions continues to evolve as organizations adapt to emerging technologies and shifting policies, Freres said. Although few regions have adopted emissions caps as aggressive as New York City’s, industry professionals are increasingly prioritizing lofty sustainability goals, driven by mounting pressure from stakeholders like tenants and investors and recognition of the long-term benefits of sustainable building practices 

“While investing in carbon reduction strategies remains critical, costs can often be offset by incentives and subsidies, making the path forward more attainable. Taking a phased approach also allows organizations to manage projects more effectively, spreading out costs over time and aligning improvements with routine maintenance schedules,” Freres said. “As regulations continue to evolve, there are emerging opportunities for innovation and collaboration across the industry. Contractors are especially well-positioned to guide clients through this transition by identifying cost-effective solutions and phasing investments to build resilience and long-term success in the built environment.” 

With 2030 net-zero goals quickly approaching, Lessans said the time to decarbonize is now.  

“Building decarbonization strategies must include a plan to retrofit existing buildings without exorbitant costs,” Lessans said. “For facilities with simultaneous heating and cooling demands, partial decarbonization using advanced heat pumps designed for high-head applications presents an opportunity to begin reducing emissions while realizing significant cost savings.” 

New equipment investments can be repaid in just three to five years, and the subsequent reduction in operational expenses can be reinvested in long-term sustainability strategies to drive full decarbonization.  

Merrill noted that decarbonization can be approached through several strategies: reducing Scope 2 emissions through energy efficiency programs, reducing Scope 1 emissions by electrifying equipment and minimizing fugitive refrigerant emissions, and adding on-site renewables to further reduce the electricity used by the grid (further reducing Scope 2 emissions).   

“Typically, energy efficiency measures can produce cost savings and a relatively simple ROI.  It gets more complicated when you start to get into electrification and renewables projects,” Merrill said. “This is why it’s important for property owners to understand the full impact of the projects they’re pursuing and begin to look at them as not only drivers of emissions reduction, but also as ways to improve their facilities to drive smoother operations and tenant/occupant satisfaction, boost their brand and reputation as a more sustainable operation, and meet their commitments to shareholders.  These outcomes have a value, and companies need to find ways to quantify those in terms of the ROI that they will drive through decarbonization activities.”