What is Benchmarking?

What is Benchmarking and Disclosure?

Energy Benchmarking &
Disclosure infographic - EEB Hub
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Benchmarking refers to the process of measuring and comparing performance metrics [1]. In the building industry, energy benchmarking programs create standardized metrics to measure and compare energy efficiency between similar buildings, just as miler-per-gallon is used to compare energy efficiency between cars. Building energy benchmarking differs from miles-per-gallon though, because it measures actual performance rather than design performance. Benchmarking helps owners to assess energy use and to gauge performance relative to others in the marketplace. Disclosure of this benchmarking data refers to the the release of this data to government, industry, or the public. Mandatory collection and disclosure of benchmarking data gives potential buyers or tenants the information they need to include a building’s energy efficiency in their decision to buy or rent. Thus far, over fifty national, regional, and local governments have passed ordinances mandating benchmarking and disclosure to some degree [2]. The potential impact of a national building energy rating and disclosure policy, according to a report from the Institute for Market Transformation and the Political Economy Research Institute, would be an energy savings for U.S. building owners totaling 0.2 quadrillion BTUs, or approximately $18 billion, by 2020.

History of Benchmarking Legislation

Denmark became the first country to introduce benchmarking legislation when, in 1997, the national government passed a law requiring energy certification for homes and buildings. Between 2002 and 2010, Norway, Brazil, China, Turkey, and the European Parliament followed suit, mandating some form of energy certification for buildings and homes. In 2007, California introduced the first policy aimed at energy efficiency to the United States, requiring commercial rating and disclosure during every sale, lease, or financing transaction. Since then, the state of Washington (2009) and seven major cities (Washington, DC and Austin 2008; New York City, 2009; Seattle, 2010; San Francisco, 2011; Philadelphia, 2012; Minneapolis and Boston, 2013) have implemented benchmarking and disclosure legislation. See the table below for further information on individual city and state legislation.

  Jurisdiction Buildings to be Benchmarked Disclosure
  Commercial Multi-Family Extent of Disclosure Period of Reporting
Philadelphia 50K+ Not required Public Annual
Austin 10K+ Not required Local government and potential owners Annual
District of Columbia 50K+ 50K+ Public Annual
Minneapolis 50K+ Not required Public Annual
New York City 50K+ 50K+ Public Annual
San Francisco 10K+ Not required Public Annual
Seattle 10K+ 5+ Units Local government, tenants and transactional counterparties Annual
Washington 10K+ Not required Transactional counterparties At time of sale, lease, or financing
California 1K+ Not required Local government and transactional counterparties At time of sale, lease or financing
*All units are in square feet unless otherwise specified.

Benchmarking in Philadelphia

On June 21, 2012, the Philadelphia City Council passed Bill 120428-A requiring owners of nonresidential spaces of 50,000 square feet or more to track and report energy and water use. Beginning in October of 2013, owners will be required to annually submit this information to the Mayor’s Office of Sustainability, which will compile and analyze the data. Starting in 2014, MOS will make results of this reporting process publicly available.

Owners will compile and submit their energy and water use data via the U.S. Environmental Protection Agency’s Portfolio Manager program, which has become the standard for benchmarking across the nation. This tool tracks energy and water consumption as well as building characteristics (such as age, type of use(s), operating hours, and potentially use-specific information such as the amount of area heated and air conditioned) to create an aggregate energy score on a scale of 1-100 for each building, with 75 being the threshold for Energy Star certification [3].

Many large commercial buildings in Philadlephia are already LEED or Energy Star certified. The combined floor space of these eco-labeled buildings in Philadelphia amounts to almost 20% of total commercial stock, well above the national average of 2.3%. However, the absolute number of buildings meeting these certifications is less than 5%: only 403 out of the 9,500 commercial properties in the region have received one of these eco-labels. A report released by the Econsult Corporation confirms the potential for further energy savings; it estimates that approximately 80% of Philadelphia’s commercial space is suitable for retrofit [4]. The EEB Hub expects that, as public data on the energy and water efficiency of offices and buildings becomes more readily available, companies will have new opportunities to assess their energy consumption and take steps to reduce it.


[1] Institute for Building Efficiency. (2012). Driving Transformation to Energy Efficient Buildings: Policies and Actions, from http://www.institutebe.com/InstituteBE/media/Library/Resources/Energy%2and%2Climate%20 Policy/Driving-Transformation-to-EE-Buildings.pdf.

[2] Burr, A.C, Keicher, C. & Leipziger, D. (2011). Building Energy Transparency: A Framework for Implementing U.S. Commericial Energy Rating and Disclosure Policy. Washington, D.C., from Institute for Market Transformation, from http://www.buildingrating.org/sites/default/files/ documents/IMT-Building_Energy_Transparency_Report.pdf.

[3] U.S. Environmental Protection Agency. Understanding EPA’s ENERGY STAR Energy Performance Scale, from http://www.energystar.gov/ia/business/evaluate_performance/The_ENERGY_STAR_Energy_ Performance_Scale_3.28.11_abbrev.pdf?caff-0db5.

[4] Econsult Corporation. (2011). The Market for Commercial Property Energy Retrofits in the Philadelphia Region: Greater Philadelphia Innovation Cluster (GPIC) for Energy-Efficient Buildings, from http://www.econsult.com/GPIC_report.pdf.