Executive Summary

With approximately 40 percent of global emissions attributable to the construction, operation and maintenance, and demolition of the global building stock, stakeholders of the built environment have a tremendous responsibility to accelerate the decarbonization of their assets. Reaching net-zero goals will require decarbonizing at least 40 percent of the existing building stock by 2030—the same year in which all new builds must, in perpetuity, be net-zero carbon.

Even still, the built environment remains the climate laggard. The sector’s annual operational energy-related emissions reached a record high in 2021, and was the sector that saw the largest annual increase in the U.S. in 2022.

But the risks associated with continued inertia and inaction are growing larger and more numerous. Beyond the obvious physical risks that unabated climate change poses for building assets, there’s the risk of noncompliance, both with new government regulations and with the expectations of investors, insurers, suppliers, employees, tenants, occupants and other stakeholders who engage and transact with the buildings and construction sector.

Indeed, the heightened focus on the sector’s management of its Environmental, Social, and Governance (ESG) risks underscores the imperative to invest—despite lackluster occupancy rates, climbing interest rates, labor shortages, bloated commodity prices, and other headwinds—in the sustainability of built environment’s value chain.

Fortunately, the passage of the U.S. Inflation Reduction Act (IRA) by the Biden-Harris administration last year offers a path forward for businesses of the buildings and construction sector, as well as organizations of other industries with sizable building infrastructure footprints. The legislation makes available billions of dollars in tax credits, competitive grants, loans, and other funding mechanisms for businesses to put toward a variety of eligible climate change mitigation and adaptation projects in the built environment. It equips numerous federal, state, local, and Tribal institutions to invest in their own building assets and roll-out funding through existing and newly stood-up programs to local businesses and nonprofits for climate mitigation projects.

The IRA presents a once-in-a-generation opportunity to cost-effectively advance the climate alignment of America’s public and private building stocks. This federal assistance can help offset the oftentimes prohibitive costs of modernizing our existing building infrastructure. That said, IRA incentives vary in their periods of availability and the size of their allotments. Potential participants can benefit greatly from better understanding available funding mechanisms and eligibility and taking action sooner, rather than later.

Legence presents this eBook, Money on the Table, to provide insights to our valued stakeholders of the key opportunities now at their disposal and, importantly, offer guidance on how they may take advantage of them.