Planning Guides
Strategic decarbonization planning (SDP) is a comprehensive, often multi-year approach to retrofitting buildings to deeply reduce greenhouse gas emissions. It results in an investment roadmap that helps avoid missed opportunities, prevent stranded assets, and unlock long-term value.
This guide distills proven practices from the Empire Building Challenge and other leading retrofit efforts. It offers a flexible set of strategies that can be tailored to your building, team, and timeline—whether the work is led internally or supported by consultants.
In most large office and multifamily buildings, the elephant in the room is the heating system—particularly space and domestic hot water heating. These systems are the dominant source of Scope 1 emissions and a central challenge for decarbonization. Addressing them typically means replacing fossil fuel–burning equipment with electric systems, most often heat pumps.
Even with a grid still transitioning to renewables, the high efficiency of heat pumps leads to lower emissions—and that advantage will continue to grow. While first costs and electricity rates can present challenges, they can be addressed through careful planning, smart phasing, and strategic investment. This guide provides the best practices needed to meet those challenges and achieve deep, lasting emissions reductions and increased asset value.
Build the Business Case
Even the best decarbonization strategy won’t move forward without a strong business case. Owners, asset managers, and capital partners need to understand not just the environmental benefits—but the financial logic, risk profile, and strategic value of the investment.
This section is separated from Design Resource-Efficient Solutions for clarity, but in practice, the two should be tightly linked. The energy analysis described in the prior section must be integrated with the financial analysis outlined here to evaluate the viability of any investment scenario. Multiple iterations are typically required to refine assumptions, adjust strategies, and identify the optimal pathway for your building.
Define Business as Usual Investment Scenario
The business-as-usual (BAU) scenario establishes a baseline cash flow projection over the full timeframe of the financial assessment. It should reflect the same scope and structure as the decarbonization scenarios to enable meaningful comparisons.
Your events calendar—when combined with cost estimates for capital projects, maintenance, and utility cost—forms the backbone of this scenario. A well-defined BAU case clarifies the financial risks and limitations of maintaining the status quo—and provides the critical reference point needed to evaluate the benefits of proactive investment.
By anchoring decisions in the BAU scenario, decarbonization strategies are evaluated not as absolute costs, but as incremental investments above (or below) what would be spent anyway—reframing the conversation around value, not just expense.
Helpful Resources
Use Financial Analysis with Comprehensive and Forward-Looking with Financial Inputs
Robust financial analysis starts with comprehensive inputs. Omitting a variable due to uncertainty is effectively the same as assigning it a value of zero—often introducing more error than making an informed estimate. Similarly, relying only on today’s values can distort results. Key inputs like utility rates, maintenance costs, and project pricing should be forecast independently, based on their own trends.
First cost rarely captures the full picture. Metrics like net present value (NPV) provide a clearer view of long-term value. Importantly, analysis should go beyond evaluating individual energy conservation measures (ECMs). Instead, compare decarbonization pathways that reflect phasing, capital planning, and measure interdependencies. High-cost ECMs often become viable when bundled with synergistic upgrades or timed with planned capital events.
This section builds on the Define the Business-as-Usual Investment Scenario step, using the BAU model as a baseline to evaluate the incremental value of each pathway. The goal is not just to identify savings, but to determine which path delivers the best overall return—financially and operationally.
Collaborate with decision-makers early to align assumptions and build trust. Securing buy-in on inputs improves both accuracy and credibility. Ensure the financial model reflects your organization’s budgeting structure, funding channels (e.g., CapEx vs. OpEx), discount rate, and time horizon—so the results are not only right, but ready to act on.
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Explore Financing Options
Financing can make or break a project—not just by improving affordability, but by shifting the question from “Can we afford this now?” to “Does this make long-term financial sense?” Introducing financing pathways early increases the likelihood of implementation and ensures the financial model reflects how the project will actually be funded. Engaging financial decision-makers from the start, identifying viable financing tools during project scoping, and modeling at least one scenario with financing included can unlock bundled solutions that align with long-term planning and capital cycles.
Specialized lenders, green banks, and programs like PACE can offer long-term, low-cost capital tailored to deep retrofits. On-bill financing and performance-based repayment structures can also help overcome upfront cost barriers.
Helpful Resources
Pressure Test Analysis and Use Insights to Build a Compelling Business Case
Financial modeling is essential for identifying viable decarbonization pathways—but analysis alone doesn’t drive action. Results must be tested, interpreted, and communicated in ways that support confident decision-making.
Use sensitivity analysis to understand how changes in key inputs—like utility escalation, capital costs, or carbon pricing—affect financial and emissions outcomes. For broader shifts, use scenario analysis to test different futures. Highlight where the model is most sensitive and what that means for risk and opportunity. Transparency around these factors builds trust in the strategy.
Translate the analysis into a clear, compelling business case tailored to your audience. Present key assumptions, flag uncertainties, and connect the strategy to broader goals—such as emissions targets, resilience, compliance, or market position. Frame the case as a story: What’s the opportunity? What’s the risk? Why is this the smart move?
