Tracking a building’s climate impact used to be something only large investors worried about. Today, it’s essential for everyone who owns or manages property. Smaller companies face unique challenges — they know sustainability matters but often lack the resources or staff to implement large-scale programs. The good news is that benchmarking a small portfolio’s carbon footprint is entirely achievable with readily available tools and a focus on steady, practical improvements.

Buildings account for nearly a third of global energy use and over a third of energy-related carbon dioxide emissions. That means property ownership now carries new responsibilities and opportunities. Environmentally inefficient buildings are losing value, while greener ones command higher rents and stronger market positions. Studies from major real estate firms show that climate risk can directly impact property values and even loan terms. For smaller landlords, understanding the environmental performance of their buildings is key to protecting value and retaining tenants.

A building’s carbon footprint measures the greenhouse gases — expressed in carbon dioxide equivalents — produced over its lifetime, from construction to operation. For small portfolio owners, the focus should start with operational emissions: electricity, heating, and cooling. Embodied emissions from construction materials matter most when developing new buildings or undertaking major renovations. Establishing a baseline is the first step. It helps identify where you stand, track progress over time, and highlight areas for improvement. Benchmarking doesn’t just measure performance — it compares your properties to national standards, showing where you excel and where you can do better.

Start by gathering utility data for each property, including monthly electricity usage, natural gas, and water consumption. Your utility bills usually provide enough information to establish an initial baseline. Track data for at least twelve months to capture seasonal changes, and collect building details such as square footage, operating hours, tenant count, and property type. Some data may be missing, especially for older properties or those with utilities bundled into leases, but that shouldn’t stop you. You can request 12–24 months of historical data from your utility provider and begin tracking new data consistently going forward. The goal is to maintain a reliable system that improves over time.

Once you have your utility data, convert it into carbon dioxide equivalents. Different energy sources produce varying levels of emissions. For example, burning natural gas for heating produces direct emissions, while electricity-related emissions depend on your region’s power grid mix. The EPA’s free Portfolio Manager tool automatically accounts for these regional differences and provides accurate conversion factors. Grid decarbonization varies by location, so using local data is important — a portfolio in a hydro-heavy state might achieve deeper cuts with less effort than one in a coal-reliant region.

A single carbon footprint number doesn’t tell the whole story. To understand how your buildings truly perform, compare them against similar properties. EPA’s Portfolio Manager and ENERGY STAR databases let you benchmark your buildings’ energy use intensity against national averages. Scores range from one to 100, with 50 representing the median. Properties scoring above 75 rank in the top quartile and may qualify for ENERGY STAR certification, while lower scores highlight improvement opportunities. For smaller portfolios, benchmarking helps prioritize where to invest for the biggest environmental and financial return.

Once you know how your properties stack up, identify upgrades with the best return on investment. Energy audits, typically costing between $2,000 and $5,000 per building, can pinpoint “no-regret” improvements that lower both emissions and operating costs. Common examples include LED lighting with occupancy sensors, programmable thermostats, improved insulation, high-efficiency HVAC systems, and better building controls. A $30,000 investment in lighting and HVAC controls might save $15,000 annually in utilities — a two-year payback and a 15–20% emissions reduction. Utility rebates can often cover 10–30% of these costs.

Once you have a baseline, set achievable targets. For most small portfolios, aiming for a one to two percent annual energy efficiency improvement is realistic. Rather than spreading efforts evenly, it’s more effective to focus on underperforming buildings first for the greatest impact. Define short-, medium-, and long-term goals. In the short term, over one to two years, focus on low-cost, high-impact fixes such as lighting and HVAC upgrades. Over three to five years, tackle larger capital projects like HVAC replacements or building envelope improvements. For the long term, spanning seven to ten years, consider ambitious outcomes such as cutting portfolio-wide emissions by half or achieving net-zero performance in select buildings. Setting specific, measurable goals is key. Instead of vaguely aiming to “improve sustainability,” targets should focus on clear results, like reducing portfolio energy use intensity by 15% within two years or earning ENERGY STAR certification for multiple buildings within a set timeframe.

Transparency in sustainability efforts has shifted from a nice-to-have to a must-have in today’s competitive landscape. Tenants, lenders, and investors increasingly expect clear reporting on environmental performance. A simple one- or two-page sustainability summary often works better than a dense report. Effective summaries outline baseline carbon footprints, recent improvements, measurable results, and future goals. Sharing this information on your website, during property tours, and in marketing materials signals commitment to progress rather than perfection. Stakeholders understand that older buildings cannot instantly match new constructions, but they value clear plans and steady progress.

Benchmarking often uncovers operational inefficiencies that go beyond carbon reduction. Identifying systems that run unnecessarily overnight, spaces that are over-lit during quiet hours, or equipment operating below efficiency levels can lead to significant cost savings. For small portfolios, energy efficiency upgrades frequently produce the fastest wins, reducing emissions, utility costs, and maintenance needs. They also strengthen tenant relationships. Tenants increasingly consider sustainability in their leasing decisions and are often willing to pay higher rents or sign longer leases for properties that support their environmental goals. Buildings with strong sustainability metrics and improvement plans are better positioned in the market, while properties that lag risk declining value.

Common challenges for small portfolio owners include incomplete data, limited resources, and complex technical decisions. The best approach is to start simple: establish consistent monitoring, prioritize investments with the greatest impact, and leverage free tools like EPA Portfolio Manager. Energy audits and utility assessments can guide technical decisions without a heavy upfront cost. Coordinating with tenants may require additional effort, but engaging them in shared sustainability goals can turn potential obstacles into opportunities for collaboration.

Carbon footprint benchmarking is now a core part of smart property management. Regulatory requirements, tenant expectations, and financial incentives for efficiency make it clear that the real question isn’t whether small portfolio owners should benchmark, but how quickly they start and which strategy they adopt. Those who begin early, focus on cost-effective improvements, and communicate progress will be best positioned in a market where sustainability increasingly matters as much as traditional real estate metrics.

Thank you to our ENERGY STAR Month sponsor Baker Engineering.

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