Boston’s City Council originally passed the Building Energy Reporting and Disclosure Ordinance (BERDO) in 2013, to better understand the role that larger residential and commercial buildings play in greenhouse gas emissions. BERDO has been periodically amended since then, and it now imposes significant reporting and emissions standards on Boston’s larger buildings.
BERDO requires that owners of non-residential buildings with more than 20,000 square feet of floor area, and owners of residential buildings with more than 15 dwelling units, annually report to the Boston Air Pollution Control Commission their energy and water usage, and their compliance with BERDO’s emissions standards. Private building owners’ annual reports must include information on greenhouse gas emissions, building uses, use of renewable energy certificates and sources of energy purchased for buildings.
In 2026, and every five years thereafter, building owners must provide independent third-party verifications of their reported data for the previous five years. Owners can require separately metered commercial tenants to submit the BERDO reports for their leased premises. The city itself is subject to a much less burdensome version of this reporting requirement.
The Air Pollution Control Commission must disclose on the city’s website energy and water usage and emissions information for each building covered by BERDO. That commission has promulgated detailed regulations and policies for interpreting and implementing BERDO, along with a procedural framework for the ordinance.
In addition to the reporting requirements, beginning this year BERDO imposes green house gas emission standards on larger buildings. The standards require substantial reductions in those emissions every five years. However, buildings with 20,000 or more square feet but less than 35,000 square feet, and those with 15 to 34 dwelling units, do not have to comply with emissions standards until 2031, reporting for 2030 emissions. By 2050, all covered buildings are expected to produce zero emissions.
Option to Buy Renewable Energy Certificates
BERDO allows owners to mitigate greenhouse gas emissions by acquiring renewable energy certificates from non-greenhouse gas emitting sources, by purchasing energy from non-emitting renewable sources, or by making “alternative compliance payments.” The initial cost of those payments is $234 per metric ton of greenhouse gas, subject to periodic review.
The option for owners to make these payments is, in essence, a small scale “cap and trade” program that places emissions limits on greenhouse gases but allows owners to exceed those limits by making payments. This amounts to a tax on greenhouse gas emissions, which incentivizes owners to minimize those emissions.
Alternative compliance payments are paid into the city’s Equitable Emissions Investment Fund, which is dedicated to progressive initiatives such as improving and promoting affordable housing, economic inclusion for minorities and women, workforce development training programs, community housing ownership and renewable energy infrastructure. Funds are also available for improving air quality and tenants’ indoor environments.
BERDO establishes a review board with significant power. The review board may approve individual compliance schedules for owners, as an alternative to the prescribed emissions standards. It can approve hardship compliance plans, allowing less stringent emissions standards for buildings with historic designations, affordable housing refinancing timelines, long-term energy contracts, or financial hardships. The review board also considers applications for expenditures from the Equitable Emissions Investment Fund.
Board Responsible for Enforcement Decisions
Perhaps most importantly, the review board is empowered to enforce BERDO’s mandates. It can assess fines and seek court-ordered injunctions against noncompliant private building owners and commercial tenants.
For noncompliance of reporting requirements, the fine is up to $150 or $300 per day, depending on building size. Fines for noncompliance with emissions standards are up to $300 or $1,000 per day, again depending on building size. If a third-party verifier finds a discrepancy in an owner’s reporting, the owner is subject to a fine of between $1,000 and $5,000. The review board may grant reductions or waivers of fines. Owners can appeal fines assessed against them to the Air Pollution Control Commission.
It is noteworthy that city-owned properties, including some 10,000 housing units owned or managed by the Boston Housing Authority, are excused from the review board’s fines and injunctions. Without the threat of review board penalties, the city has less incentive than private property owners to comply with BERDO. It remains to be seen if the city will fully comply with BERDO’s requirements out of a sense of fairness and civic duty.
Boston has a land area of about 48 square miles, with roughly 675,000 residents. For a planet with over 8 billion people, BERDO cannot provide meaningful climate change mitigation by itself, but one has to start somewhere.
Download the article as seen in Banker & Tradesman on June 30, 2025. Learn more about Christopher R. Vaccaro.