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**Climate Change Policies at the Local Level: Tracking and Analysis**
Many industries, including commercial real estate, are actively developing strategies to reduce carbon and greenhouse gas emissions in an effort to combat the growing threats of climate change.
According to a recently released report by JLL, regulatory efforts are also accelerating, albeit differently at national and local levels. In the report titled *“City Policy is Driving Building Transformation”*, JLL’s Paulina Torres notes that national policies tend to rely on taxation, disclosure requirements, and subsidies.
However, it’s at the local level where the most direct actions are occurring—especially in addressing urban emissions. Torres points out that in many cities, buildings are the leading contributors to emissions, responsible for approximately 60% of total citywide emissions, compared to the global average of 42%.
JLL analyzed 31 cities using its City Climate and Resilience Policy Tracker and uncovered several key trends:
**Emissions Performance Is Driving Policy**
Cities are placing the built environment at the forefront of their carbon-reduction strategies. According to the report, “One in four dollars invested globally has flowed to markets whose net-zero targets come before the Paris-aligned 2050 goal, with several aiming for 2030.” This signifies how heavily investors are exposed to markets aggressively pursuing net-zero emissions pathways.
**Electrification and Renewable Energy Requirements**
Across major markets, there’s a growing trend of fossil fuel phaseouts and the adoption of all-electric building codes. Torres explains that the impact of these mandates depends significantly on the cleanliness of the city’s electricity grid. Cities in regions like the Nordics, France, and Brazil—which operate grids powered by 90% or more clean energy—are able to achieve immediate emissions reductions by electrifying buildings.
**Coordinated Policy Efforts Are Essential**
The commercial real estate industry is increasingly responding to climate-related regulations, but the challenge is broader. As Torres noted, “Resilient buildings require resilient cities,” highlighting the need for coordinated and comprehensive policy strategies across local and regional levels.
While adaptation policies—such as flood-proofing and disaster resilience—are lagging behind emissions reductions, market signals are starting to shift. Rising insurance premiums and tightening access to capital in high-risk zones are pushing cities to embed resilience measures into their regulations. This not only protects public infrastructure but also preserves the marketability and financial viability of local real estate.
**Why Local Policy Matters**
Torres emphasizes that local policies now represent the most significant regulatory forces shaping commercial real estate investments and operational costs. Real estate owners, operators, and developers must stay informed and proactive.
“As regulation gains enforceability and scope,” she adds, “real estate leaders must anticipate these shifts to safeguard asset value and manage transaction risk.”
In today’s evolving regulatory landscape, understanding and responding to local climate policies are no longer optional—they’re essential to future-proofing assets and maintaining competitiveness in the market.
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