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Can Sustainability Benefit the Planet While Boosting NOI?

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Depending on the industry, sustainability can feel like a non-negotiable or like a line item that will cost your business without measurable return. For large energy users already experiencing high prices, it probably feels like the latter. 

Recent changes in federal policy have added to the uncertainty, while removing pressure on businesses to opt in to more sustainable energy practices. Although it may appear that incentives to go green have wilted, large energy users who write off sustainability as “too expensive” or “too complicated” may be overlooking an opportunity to improve their Net Operating Income (NOI). 

For commercial property owners and operators, sustainability doesn’t have to be making sweeping changes all at once; it’s about making smarter, incremental decisions that reduce operating costs, improve asset value and attract long-term tenants and investors. 

Practical Sustainability Options for Commercial Buildings 

Adopting sustainable practices doesn’t require rebuilding a property from the ground up. Complying with environmental, social and governance (ESG) standards can be done in a few ways. 

Operational Efficiency Upgrades

  • Energy-Efficient Lighting 
  • HVAC Upgrades
  • Building automation controls 
  • Smart Meters and submetering 

Clean and Carbon-Free Energy Products 

Although implementing some of these changes can have higher initial costs, over time they typically lower operating costs and improve building efficiency, making it more attractive to potential tenants and investors. For some tenants and investors, sustainability may not be their primary drive, however, it’s increasingly a deciding factor when choosing between comparable properties.

The Financial Upside of Sustainability

Sustainable business practices don’t just have an impact on the environment, they can save money, create competitive advantage and attract new tenants and investors. 

Even with reductions in sustainability incentives on a federal level, there are still existing incentives from local municipalities and utility companies. Changes in federal policy, like The Big Beautiful Bill, may have reduced or extinguished many of the clean energy tax credits, but there are still some that remain. The Clean Electricity Investment Credit, for example, will remain open through the end of 2027. 

Outside of federal incentives, many meaningful programs exist at the state, municipal and utility level. Incentives vary by location, but often include rebates or grants for energy-efficient lighting, HVAC upgrades and smart building technology. 

For example: 

  • California offers incentives for businesses to install energy-efficient technology.
  • New York provides grants and financing through the New York State Energy Research Development Authority (NYSERDA) to support businesses in making energy-efficient upgrades. 

In addition to incentives from federal and state governments, buildings that have green certifications can see an increased return on investment (ROI) through higher rental premiums. In many markets, green certified properties can charge up to 9% higher in rental premiums than standard buildings, which directly improves a property’s revenue potential. 

Why Sustainability Matters for NOI

Sustainability presents an opportunity for businesses to increase financial returns while investing in the environment. Reducing energy consumption and improving efficiency lowers ongoing costs. At the same time, sustainability initiatives can enhance a building’s appeal to tenants and investors, supporting stronger occupancy and rent growth. 

When viewed through this lens, sustainability is no longer a buzzword; it’s a strategic tool that can strengthen a building’s NOI. For large energy users, the questions shouldn’t be whether sustainability is worth the upfront investment, but how they can leverage sustainability to align with their financial goals and long-term strategy.

 

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