Building Smarter: How Collaboration is Simplifying Emissions Reporting for Commercial Property Owners

Nova Group, GBC
Jul 11
5 min read

Co-authored by Frazier & Deeter (FD), Green Building Initiative (GBI), and Nova Group, GBC (Nova)

Frazier & Deeter, GBI, and Nova Group, GBC

Regulatory Landscape Overview

Many U.S. states are intensifying requirements for greenhouse gas (GHG) emissions reporting, often mandating third-party review to ensure compliance with laws targeting emissions reductions. These regulations extend beyond earlier benchmarking or Building Performance Standards (BPS) mandates.

California:

SB 253: Businesses with annual revenues over $1 billion must disclose Scope 1 and 2 emissions starting in 2026, and Scope 3 emissions from 2027 onward, all subject to limited assurance.
SB 261: Companies with revenues over $500 million must report climate-related financial risks and mitigation measures based on the Task Force on Climate-related Financial Disclosures (TCFD) framework, with the first reports due by January 1, 2026.

New York:

Senate Bills 3456 & 3697: Require large companies to report GHG emissions and climate-related financial risks.
- SB 3456 mandates the disclosure of Scopes 1, 2, and 3 emissions for companies with revenues above $1 billion, starting in 2027 for Scopes 1 and 2, and 2028 for Scope 3. Penalties for non-compliance can reach $500,000 annually.
- SB 3697 requires companies with revenues over $500 million to submit biennial climate risk reports under the TCFD framework starting in 2028, with penalties up to $50,000 per year.

Colorado:

House Bill 25-1119: Proposed in January 2025, this bill would have required companies with revenues over $1 billion to disclose Scope 1 and 2 emissions starting in 2028 and Scope 3 emissions starting in 2029, with independent third-party verification and significant civil penalties for non-compliance. However, the bill died in February 2025.

Illinois:

House Bill 3673 (Climate Corporate Accountability Act): Introduced in 2025, it proposes requiring companies with revenues over $1 billion to publicly disclose Scope 1 and 2 emissions from January 2027, and Scope 3 within 180 days thereafter. The Secretary of State would establish disclosure rules and maintain a public digital platform, with enforcement via civil penalties.

Bringing Together GHG Reporting and Compliance Expertise

To meet these demands, organizations like Frazier & Deeter (FD), Green Building Initiative (GBI), and Nova Group, GBC streamline and strengthen the emissions reporting and assurance process for building owners and portfolio managers. These groups each have a shared commitment to helping businesses respond to today’s ESG expectations and comply with growing regulatory requirements.

Green Building Initiative (GBI):

GBI is a global nonprofit organization whose mission is: “To improve the built environment’s impact on climate and society.“ GBI specializes in sustainability and net-zero energy/carbon certification for commercial buildings and portfolios. Through its Journey to Net Zero™ (JNZ) program, GBI supports owners in calculating Scope 1 and 2 emissions, tracking energy efficiency, and documenting reductions from renewable energy sources. JNZ progress reports include an independent third-party review to aid compliance with government reporting requirements.

Nova Group, GBC:

An international advisory firm with expertise in environmental, engineering, and energy services. Nova brings over a decade of experience in utility data preparation, asset evaluation, and decarbonization planning, helping owners navigate compliance challenges including BEPS, GHG inventories, and third-party verification.

Frazier & Deeter (FD):

A Top 50 global accounting and advisory firm providing a range of attestation services, including independent assurance for emissions and other ESG data. FD enhances the credibility of reported emissions by aligning assurance engagements with leading climate standards, supporting building owners who require trusted validation of their climate disclosures.

Understanding the Terminology - Verification vs. Assurance

Verification: A technical review focused on the accuracy and completeness of GHG emissions data, ensuring alignment with accepted standards like the GHG Protocol. It results in a statement confirming the absence of material misstatements.
Assurance: A broader, formal evaluation performed by an independent, qualified third-party under professional standards (e.g., AICPA AT-C 105 and AT-C 210, ISAE 3000, or AA1000AS) that assesses both the data and the systems/processes used to collect it. Assurance reports provided by firms such as Frazier & Deeter express confidence levels such as:
- Limited Assurance: Review engagement that indicates no known material misstatements.
- Reasonable Assurance: Examination engagement that provides a higher level of confidence that the data is materially correct based on more extensive procedures.

Benefits of Third-Party Review Beyond California, New York, and Illinois

In the GRESB Real Estate Assessment, independent assurance of environmental data can add up to 5.5 points in the "Data Monitoring and Review" category, distributed across review of energy data, GHG data, Water data, and Waste data.

Participants earn full points by obtaining third-party assurance or verification based on recognized standards such as AICPA AT-C 105 and AT-C 210, AA1000AS, or ISAE 3000. Partial points are awarded if the data is reviewed by an independent party without adherence to these standards.

Benchmarking Ordinances Requiring Third-Party Verification

Several local ordinances mandate third-party verification for benchmarking data, including those in:

Seattle, WA
Washington, DC
Montgomery County, MD
St. Louis, MO
New York, NY

While not required for all locations, verification is a valuable step in the process for identifying errors in the data and property details.

(Consider here a case study of findings of verification and impact, i.e., the Denver example)

Market Value of Third-Party Verification

Verifying GHG emissions data independently provides notable advantages:

Builds Trust and Credibility: Independent verification reassures stakeholders—investors, customers, regulators—that emissions data is accurate and trustworthy.
Differentiates Your Brand: It demonstrates genuine environmental commitment, reducing skepticism and protecting against greenwashing accusations.
Attracts Eco-Conscious Consumers: Verified data supports environmentally responsible purchasing decisions.

Supply Chain Ripple Effect

Greenhouse gas (GHG) emissions disclosure is increasingly extending beyond traditional portfolio companies to encompass a broader range of operating businesses. Companies with global offices, retail operations, logistics, warehousing, and various other assets are finding themselves embedded within the value chains of larger corporations that are subject to climate-related disclosure requirements.

These larger companies are required to report not only their direct (Scope 1) and indirect (Scope 2) emissions, but also the upstream and downstream emissions in their value chain. As a result, businesses that were once outside the scope of mandatory reporting are now being identified as significant contributors to their clients' or partners’ carbon footprints.

To maintain their roles in these supply chains, suppliers and service providers must now collect, quantify, and disclose their own emissions data. This emerging requirement is causing a “supply chain ripple effect,” in which companies at every tier are pressured to improve transparency, invest in emissions tracking capabilities, and align with industry standards on climate reporting.

What Businesses Need to Do Now

As climate disclosure regulations continue to evolve and expand, building and portfolio owners face increasing pressure to accurately measure, report, and verify their greenhouse gas emissions. FD, GBI, and Nova offer comprehensive solutions that simplify compliance—from data collection and emissions reduction planning to trusted independent third-party assurance. For owners and managers looking to get ahead of compliance and stakeholder expectations, the time to act is now. Here’s a process to consider:

Engage a consultant like Nova to collect and validate your utility data and develop decarbonization plans.
Register to use GBI’s Journey to Net Zero™ (JNZ) program and leverage GBI’s expert staff and the GBI JNZ Calculator to benchmark your buildings, resulting in a third-party reviewed emissions report.
Work with FD to obtain limited or reasonable assurance on your emissions data, depending on your regulatory and stakeholder needs.
Take action to reduce emissions, using the GBI JNZ report and consulting guidance to meet BEPS requirements or prepare for more stringent 2030 targets.
Monitor and reassess progress annually or every few years through GBI’s JNZ program to stay aligned with evolving goals and regulations.

Upcoming Events and Collaboration

To further promote transparency and education, Frazier & Deeter, GBI, and Nova will jointly present at the IMN Conference in Dana Point, CA, July 16 - 17, 2025. The session will explore best practices for ESG reporting, common pitfalls in emissions disclosures, and how building owners can proactively respond to the evolving regulatory landscape.