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Not long ago, “decarbonization” was a buzzword in U.S. real estate and corporate circles. Companies were falling over themselves to announce carbon-neutral goals, and there was serious talk of mandatory carbon reporting. Now, the political winds have shifted—so much so that decarbonization has become almost a bad word in some circles.
The federal government’s stance has reversed course: a concerted war on “ESG” principles has taken hold, and several Biden-era climate initiatives are being rolled back. The U.S. Securities and Exchange Commission recently halted its defense of new climate disclosure rules, effectively shelving a major federal push for corporate carbon transparency. The Department of Energy moved to delay new efficiency standards for federal buildings, undoing a policy that would curb fossil fuel use in government facilities.
Federal climate funding is under pressure as well. House lawmakers aligned with President Trump’s agenda have proposed slashing many incentives from the Inflation Reduction Act, including clean energy tax credits and energy efficiency programs. Even the popular Energy Star program—long a bipartisan mainstay—faces a potential shutdown amid budget cuts. All this paints a picture of an inhospitable political climate for decarbonization at the national level.
Yet, talking with energy management practitioners reveals a different story on the ground. Despite the federal pullback, it’s still largely business-as-usual for energy and carbon-cutting projects. The fundamental drivers haven’t changed.
In fact, organizations that ramped up efforts during the recent tailwind years are continuing on momentum. Energy management and efficiency projects made good business sense before, and the boost from a few years of pro-decarbonization policy was just that—a boost—not the whole reason these projects move forward.
As we heard in recent conversations with three experts—Mike Bendewald of Mantis Innovations, Tom Arnold of Gridium, and Kylie Ford of InSite—market realities and on-the-ground economics are still driving decarbonization projects, even in 2025’s skeptical political climate.
Bendewald shared that their decarbonization consulting and contracting business is holding steady across sectors. Momentum for energy and carbon programs continues, largely because many organizations had already committed to these efforts before current market uncertainties. Mantis is still seeing forward movement thanks to that existing buy-in.
Arnold explained that while retrofit projects are flat or down, their energy management software business is booming. Gridium focuses on delivering low-cost, high-ROI operational savings for commercial real estate (CRE), which is exactly what building owners are prioritizing right now. Meanwhile, demand for decarbonization roadmapping remains strong, as owners want to prepare for future investment even if they’re not spending now.
Ford noted a shift in priorities across their client base. InSite offers energy management, benchmarking and ongoing commissioning services across sectors. While government clients have tightened budgets and shifted to a cost-savings mindset, the firm has seen rising momentum in hospitality and healthcare with CRE holding flat on the whole and presenting new opportunities in certain markets..
Below, we explore what is still propelling these efforts forward. From local laws and investor expectations to energy prices and sector-specific pressures, multiple factors are keeping the decarbonization movement alive and well.
While federal requirements stall, state and city building performance standards are increasingly picking up the slack. Major cities and jurisdictions—from New York City’s carbon caps on large buildings to Washington State’s energy performance standards—continue to ratchet up requirements. More local laws are coming online each year, often with stiff fines for buildings that don’t improve.
Even if some owners fight these regulations in court (as is happening in Colorado), most recognize they can’t count on litigation to solve their long-term exposure. “They still want to do something about their risk long term even if fighting it short term,” as one interviewee observed. There’s a growing sentiment in the market that regulations—at some level—aren’t going away. Owners are using this time to get their arms around their carbon and energy performance, so they’re not caught unprepared later.
Private-sector carbon commitments remain a powerful force. The number of companies setting science-based climate targets continues to rise steadily despite the noise. In fact, over 10,000 businesses globally have now committed to science-based emission reduction targets as of early 2025—a 29% jump from 2024.
Many big U.S. companies are among them, and investors are still watching. Large asset managers and banks, despite the anti-ESG backlash in some political quarters, haven’t broadly pulled back on assessing climate risk. They recognize that physical climate impacts pose material financial risks.
The world’s biggest investors and corporate giants see worsening floods, storms, and heatwaves as serious business threats—touching everything from facilities to supply chain. As a result, these stakeholders continue to expect climate action from companies as a matter of prudent risk management, not just “do-goodery.”
Notably, some states are stepping in where the feds backed off. When the SEC’s nationwide climate disclosure rule got stuck, California passed its own laws to force the issue. The state’s new Climate Corporate Data Accountability Act (SB 253) will require large companies (over $1B revenue) doing business in California to publicly report their complete greenhouse gas emissions, starting with 2025 data. A companion law (SB 261) mandates disclosure of climate-related financial risks by firms over $500M in revenue.
California’s move essentially ensures that thousands of U.S. companies must continue measuring and managing carbon as part of normal business—a state-driven substitute for the scuttled SEC rule.
Another tailwind is coming from the energy markets themselves. The transition to cleaner energy is underway, and, as both Bendewald and Ford noted, “you can’t just turn it off now”—even a more fossil-fuel-friendly administration can’t overnight reverse the mix of renewables and retiring plants on the grid.
One effect of this transition has been increased volatility in energy prices and demand charges, which hits organizations’ bottom lines. In some regions, this price signal has been impossible to ignore. Bendewald gave the example of the PJM electricity market (covering much of the Mid-Atlantic), where a recent forward capacity auction sent prices skyrocketing for large power users. The result: certain customers are looking at “their energy costs… increase by 50% within the next year” due to surging demand charges. This wake-up call is directly tied to factors like data center load growth and the influx of intermittent renewables on the grid.
You can call it a consequence of decarbonization policies or simply of economic growth straining infrastructure, but the takeaway for energy managers is the same: higher costs and reliability concerns if they don’t take action. That drives more interest in solutions like load management, advanced controls, on-site generation, and efficiency upgrades to buffer against volatility.
“It’s an energy transition issue… It’s going to raise costs if you’re not managing it,” Bendewald says. “When you show [clients] that their costs will jump, they pay attention… The solution is load management—when are you using power, and are you reducing your power through efficiency or controls or demand response?” In short, the push for cleaner energy has introduced new operational challenges (and opportunities) that smart building operators are addressing with decarbonization tools—because those tools also save money and improve resilience.
In some regions, the motivation is being framed less as “saving the planet” and more as keeping the lights on. Ford notes that capacity constraints are leading local authorities and utilities to promote demand reduction for reliability: “State and local jurisdictions [are] trying to reduce building footprints not really because it’s a sustainability effort, but [because] the grid [is] being overtaxed… it’s being framed as energy security and continuity of supply. The less energy you consume, the better position you can be in.” This is another reason efficiency and load-shifting projects are still getting green-lit—they help ensure business continuity in an era of stressed grids.
Taken together, these enduring tailwinds—policy action outside the Beltway, investor and corporate climate commitments, and energy market economics—are sustaining a strong baseline of activity. But how this activity manifests can vary a lot by industry.
Let’s dive into a few key verticals (CRE, Healthcare, Corporate, and Hospitality) to see where decarbonization stands in mid-2025.
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In commercial real estate (CRE), the picture is bifurcated. On one hand, building owners are in survival mode right now due to economic stress. Office properties in particular are reeling from high interest rates, low occupancy, and tumbling valuations—some have called it a full-on market crash.
In cities like San Francisco, Los Angeles, and New York, owners have even begun handing the keys back to lenders for under-water office towers. With this backdrop, many building-level decisions are laser-focused on cost-cutting and net operating income (NOI). Virtually no one is approving long-payback capital projects unless they absolutely have to.
As Gridium’s CEO Tom Arnold observes, “they’re not doing anything unless it drives NOI,” and that attitude now carries the day in asset management meetings. “The bar is higher… you have to prove, prove, prove NOI and ROI,” Arnold says. “It’s not enough to report or [just] show direction. It’s like, where is your damn impact?”
For a CRE executive in 2025 it has become perfectly acceptable to stand up and say “I don’t give a damn about carbon in the building if it doesn’t pencil out”—a stance that would have been unthinkable during the ESG fervor a few years agog.
This pragmatic (even cynical) turn has implications for what kinds of projects move forward. Capital-intensive retrofits or deep decarbonization upgrades are largely on hold right now in the CRE world. Arnold notes that many clients have basically frozen big spending: “Our capital projects are flat to down,” he says, reflecting industry-wide deferrals.
However, there is still strong demand for low-cost, high-ROI improvements—the kind that reduce energy expenses with minimal upfront investment. “Our software [business] is growing faster than it’s ever grown,” Arnold adds. Gridium and similar firms offer analytics and optimization software that helps building operators squeeze out savings by fine-tuning existing systems.
Those kinds of operational efficiency measures (tuning HVAC schedules, eliminating wasted after-hours usage, etc.) have quick paybacks and directly boost NOI, making them attractive even in a downturn. In short, CRE owners may be putting off new chillers or solar panels, but they’re eager to find “free money” in the buildings through smarter management.
Meanwhile, at the portfolio and enterprise level, nobody has forgotten about decarbonization entirely. Large real estate investors and REITs still acknowledge that, over the long term, the trend toward carbon regulation and market demand for efficient buildings isn’t going away.
As Arnold told us, the three legs of the stool for landlords—regulation, tenant demand, and investor expectations—are all still pointing toward decarbonization in the long run. The timeline has simply become more uncertain. Many CRE firms are developing decarbonization roadmaps and strategies, even if they’re not funding big projects this year. They want to understand the investment needed when the time (and market) is right. This latent demand is why consulting work for “decarbonization master plans” is reportedly still strong, even as actual retrofit projects are delayed.
Tenant pressure is a real factor here. Major corporate tenants (especially in tech, finance, and other sectors with their own climate goals) continue to insist on lower-carbon office space. They are increasingly asking landlords for energy and carbon data, and choosing buildings that help meet their own sustainability targets. Many tenants have science-based targets of their own and need low-carbon facilities to hit them.
Likewise, real estate investors, including those backing CRE debt, are incorporating climate risk into their risk assessments. Despite political posturing, large capital markets players have not reversed course on considering climate and ESG factors in real estate finance—if anything, insurers and pension funds are getting more granular about it. All of this exerts a quiet, background pressure on CRE owners to keep one foot in the decarbonization camp, even as they publicly emphasize cost discipline.
Perhaps the best way to describe CRE right now is “playing defense” in the short term while still hedging for the future. Regulations will tighten eventually and climate risks are only growing. Ford points out that climate impacts are already hitting real estate hard: “We’re having weather patterns changing… disruptions from flooding, hurricane threats in areas that normally don’t see it, tornadoes increasing. For those reasons, clients are approaching carbon as a business continuity risk.”
A coastal property owner who’s dealt with three “once-in-a-century” floods in five years, for example, doesn’t really care whether the term is ESG or just good engineering—they’re investing in resilience and efficiency so their building remains viable. In the long game, that’s driving decarbonization-related investments (like improved building envelopes, backup power and microgrids, efficient cooling systems) even if the motivation is framed as risk management rather than virtue.
Outside of pure real estate, many corporations embarked on decarbonization initiatives over the past several years—and importantly, those that did have not reversed course. Once a big company makes a public commitment and allocates budget to a sustainability or energy program, it creates internal momentum and constituencies that are hard to simply disband.
We see this clearly in examples like Dollar Tree (case study here), a large retail chain that Mantis Innovations works with. Bendewald explains that Dollar Tree took advantage of the recent trend to kick-start their efforts: “They went through a major executive-level switch—they hired their first Chief Sustainability Officer, then a director of energy and a manager of energy. They built out [a team] to do this.”
Now, even with political winds shifting, “it’s accelerating because they’ve already taken the steps… and the business case for it was beyond just their net zero goal.” In other words, after using the decarb tailwinds to get past the tipping point, the company discovered multiple concrete benefits for cutting energy use (cost savings, operational improvements, brand value, etc.). Those benefits still exist, so the program is still full steam ahead. Once energy-saving projects begin delivering ROI and sustainability teams gain influence, it’s difficult (and often illogical) for executive leadership to pull the plug, even if the external political narrative has shifted.
The momentum is especially strong for companies with global exposure. A U.S. firm owned by a European private equity parent, for instance, might have to upgrade its sustainability performance to meet EU expectations, regardless of U.S. policy. Bendewald gave the example of a biotech manufacturer with European investment that faces aggressive sustainability requirements from its owners.
What about companies that didn’t jump on the bandwagon in the last few years? Here, we do see a gap. Firms that were late adopters might find it harder to justify kicking off a decarbonization program in today’s political climate. They missed the tailwind and now face a headwind, at least narrative-wise. Getting started requires focusing purely on the bottom-line benefits.
Bendewald says you rely on the “bread-and-butter” incentives and business cases that have always existed: “Crazy high incentives in the Northeast… certain clients get zero-cost financing for five or seven years through the utility or programs. That stuff’s been around a long time—really no change. It’s just pure, like, I’m a facility manager, I get stuff that’s low cost, a really good business case, I’m going to take that to my boss and get it [approved].”
In other words, energy efficiency always made financial sense in many regions thanks to good old ROI math.
Government entities, especially at the federal level, have felt the whiplash of the political shift most directly. As noted, federal agencies had been gearing up to meet new sustainability mandates that are now paused or cancelled. However, that doesn’t mean all government energy projects died. In many cases, it just means they’re being reframed in terms of cost savings and resiliency rather than carbon metrics. “We have a major focus on federal work that we’re actually winning, because energy work is efficiency work at its core,” says Ford of InSite’s public sector projects.
Agencies now more than ever want to cut operating expenses and protect against service disruptions, which leads them to the same solutions (efficient equipment, better controls, on-site renewables/backups) that also happen to reduce consumption and emissions.
One sector that has surged unexpectedly in decarbonization interest is hospitality—hotels and large travel/leisure operators. Historically, hotels were laggards in sustainability; owners often balked at investments because they could pass energy costs to guests, and there was always a tension between franchise owners and the big hotel brands.
Now, several things have changed. First, the major hotel brands (Marriott, Hilton, IHG, and others) have all made public climate commitments to slash emissions by 2030 and hit net-zero by 2050. They are pushing these expectations down to franchisees.
“In hospitality, there’s always been the push and pull between the building owners and the brands,” says Ford. “Now there’s a concerted effort among the brands to really push owners to reduce carbon. They’re pretty unified on this. If you’re an owner-operator, it’s really hard to find a brand that’s not going to ask you to at least report [your carbon] or hit goals.”
“We’re seeing hospitality clients come to the table in droves, in a way they never have before,” Ford shares.
Many hotels have energy-intensive systems (think on-site laundry, pools, commercial kitchens) that historically were hard to decarbonize without compromising service. But newer solutions are emerging—for instance, high-efficiency electric heat pump systems can now handle hotel hot water and laundry needs in certain climates, and all-electric hotel designs are becoming viable. “They’re looking at things like on-site laundry—it has an unbelievable carbon footprint—and we’re just now getting technology in place where it makes sense to do it,” says Ford. “Fully electrified hotels… in some regions, you can definitely do that now.”
This tech progress means that what was once impractical (e.g. ditching gas boilers) is now on the menu when hotels plan renovations, especially in forward-thinking markets. It lowers the barrier for hotels to act on the sustainability push coming from above and below.
As Ford summarizes, “It’s a combination of technology improvements, the brands’ consistency, and the regulatory environment reaching a critical mass.” Even if a hotel owner is personally indifferent to climate issues, they’re being pulled into action by brand requirements, emerging regulations, and the straightforward logic of cost savings.
Healthcare is another sector experiencing a late awakening to decarbonization—and it’s largely driven by a mix of cost and risk considerations. Financial pressures in healthcare are helping drive the change. “Would you rather spend your budget on inefficient facility operations, or on patient outcomes and care?”, summarized Ford. When put like that, it’s an easy choice—and it’s driving many hospital executives to invest in upgrades that reduce energy waste.
Beyond cost, the healthcare sector is recognizing its vulnerability to climate risks and its own significant carbon footprint. The sector’s footprint comes not just from energy use in hospitals, but also from supply chains (pharmaceuticals, medical devices), waste (biohazard disposal, etc.), and even anesthetic gases.
As Ford notes, many healthcare organizations are now doing carbon inventory exercises for the first time, and the results can be eye-opening. “We have a healthcare client that just went through a carbon inventory process and they found [they] don’t even know who owns the spreadsheet that tracks their waste data… they couldn’t come up with how much medical waste [they] produce, [or even] how much anesthetic gas [they] purchase,” she recalls.
The exercise of accounting for all emissions sources often reveals data gaps and inefficiencies in record-keeping. “It’s causing them to go back and understand their systems… a lot of these things were formatted around [finance] purposes, not for environmental impacts.” In the case of that client, once the full greenhouse gas inventory was completed, InSite delivered a slate of recommendations that started with better data collection processes. It wasn’t about jumping immediately to flashy new tech—it was about getting their house in order to manage this issue long-term.
Ford also mentioned clients who, despite ongoing litigation over local carbon rules for hospitals, decided to get ahead of the curve. They assume that even if they stave off fines or mandates for now through lobbying or lawsuits, they “can’t avoid this forever… it’s still going to be a regulatory environment with focus on this.”
Healthcare’s decarbonization push goes beyond energy efficiency into areas like waste reduction, sustainable procurement, and resilience. Many hospitals are looking at how to reduce medical waste (a huge emissions contributor when incinerated) and phase out high-global-warming-potential gases in refrigeration and anesthesia. Ford quips that if healthcare was 10 years behind the curve on energy, it’s 25 years behind on waste management—but that too is starting to change, bringing a lot of new players to the table who were never involved in “sustainability” discussions before (e.g. supply chain managers, medical waste handlers).
This broadening of scope means decarbonization in healthcare is gradually being integrated into the overall quality and risk management frameworks of health systems.
Looking across these sectors, a clear theme emerges: pragmatism is the order of the day, and it is continuing to drive decarbonization projects even when the political rhetoric cools. The U.S. federal pullback may have removed some top-down pressure and glossy headlines, but the on-the-ground reality in 2025 is that many organizations have already baked energy and carbon management into their operations—or find themselves compelled to do so for practical reasons.
Local laws, market expectations, energy reliability, cost savings, risk mitigation: these core drivers remain firmly in place. In some cases, they’ve become even more salient now that companies must justify projects in ROI terms rather than just citing policy mandates.
For energy managers and sustainability directors, the message is both sobering and empowering. No, you can’t currently lean on sweeping federal mandates or easy narrative wins about “saving the planet” to get your project approved—those days (for now) are on pause. But you also don’t need to. The business case for smart energy and decarbonization investments is as strong as it has ever been, if not stronger.
In a time of political headwinds, it’s easy to become cynical or lose hope that the transition to sustainable, low-carbon operations will continue. But the stories above show that the transition is alive and well—it might be quietly humming in the background, fueled by common-sense decisions, rather than making front-page news with bold pledges.
In commercial real estate (CRE), the picture is bifurcated. On one hand, building owners are in survival mode right now due to economic stress. Office properties in particular are reeling from high interest rates, low occupancy, and tumbling valuations—some have called it a full-on market crash.
In cities like San Francisco, Los Angeles, and New York, owners have even begun handing the keys back to lenders for under-water office towers. With this backdrop, many building-level decisions are laser-focused on cost-cutting and net operating income (NOI). Virtually no one is approving long-payback capital projects unless they absolutely have to.
As Gridium’s CEO Tom Arnold observes, “they’re not doing anything unless it drives NOI,” and that attitude now carries the day in asset management meetings. “The bar is higher… you have to prove, prove, prove NOI and ROI,” Arnold says. “It’s not enough to report or [just] show direction. It’s like, where is your damn impact?”
For a CRE executive in 2025 it has become perfectly acceptable to stand up and say “I don’t give a damn about carbon in the building if it doesn’t pencil out”—a stance that would have been unthinkable during the ESG fervor a few years agog.
This pragmatic (even cynical) turn has implications for what kinds of projects move forward. Capital-intensive retrofits or deep decarbonization upgrades are largely on hold right now in the CRE world. Arnold notes that many clients have basically frozen big spending: “Our capital projects are flat to down,” he says, reflecting industry-wide deferrals.
However, there is still strong demand for low-cost, high-ROI improvements—the kind that reduce energy expenses with minimal upfront investment. “Our software [business] is growing faster than it’s ever grown,” Arnold adds. Gridium and similar firms offer analytics and optimization software that helps building operators squeeze out savings by fine-tuning existing systems.
Those kinds of operational efficiency measures (tuning HVAC schedules, eliminating wasted after-hours usage, etc.) have quick paybacks and directly boost NOI, making them attractive even in a downturn. In short, CRE owners may be putting off new chillers or solar panels, but they’re eager to find “free money” in the buildings through smarter management.
Meanwhile, at the portfolio and enterprise level, nobody has forgotten about decarbonization entirely. Large real estate investors and REITs still acknowledge that, over the long term, the trend toward carbon regulation and market demand for efficient buildings isn’t going away.
As Arnold told us, the three legs of the stool for landlords—regulation, tenant demand, and investor expectations—are all still pointing toward decarbonization in the long run. The timeline has simply become more uncertain. Many CRE firms are developing decarbonization roadmaps and strategies, even if they’re not funding big projects this year. They want to understand the investment needed when the time (and market) is right. This latent demand is why consulting work for “decarbonization master plans” is reportedly still strong, even as actual retrofit projects are delayed.
Tenant pressure is a real factor here. Major corporate tenants (especially in tech, finance, and other sectors with their own climate goals) continue to insist on lower-carbon office space. They are increasingly asking landlords for energy and carbon data, and choosing buildings that help meet their own sustainability targets. Many tenants have science-based targets of their own and need low-carbon facilities to hit them.
Likewise, real estate investors, including those backing CRE debt, are incorporating climate risk into their risk assessments. Despite political posturing, large capital markets players have not reversed course on considering climate and ESG factors in real estate finance—if anything, insurers and pension funds are getting more granular about it. All of this exerts a quiet, background pressure on CRE owners to keep one foot in the decarbonization camp, even as they publicly emphasize cost discipline.
Perhaps the best way to describe CRE right now is “playing defense” in the short term while still hedging for the future. Regulations will tighten eventually and climate risks are only growing. Ford points out that climate impacts are already hitting real estate hard: “We’re having weather patterns changing… disruptions from flooding, hurricane threats in areas that normally don’t see it, tornadoes increasing. For those reasons, clients are approaching carbon as a business continuity risk.”
A coastal property owner who’s dealt with three “once-in-a-century” floods in five years, for example, doesn’t really care whether the term is ESG or just good engineering—they’re investing in resilience and efficiency so their building remains viable. In the long game, that’s driving decarbonization-related investments (like improved building envelopes, backup power and microgrids, efficient cooling systems) even if the motivation is framed as risk management rather than virtue.
Outside of pure real estate, many corporations embarked on decarbonization initiatives over the past several years—and importantly, those that did have not reversed course. Once a big company makes a public commitment and allocates budget to a sustainability or energy program, it creates internal momentum and constituencies that are hard to simply disband.
We see this clearly in examples like Dollar Tree (case study here), a large retail chain that Mantis Innovations works with. Bendewald explains that Dollar Tree took advantage of the recent trend to kick-start their efforts: “They went through a major executive-level switch—they hired their first Chief Sustainability Officer, then a director of energy and a manager of energy. They built out [a team] to do this.”
Now, even with political winds shifting, “it’s accelerating because they’ve already taken the steps… and the business case for it was beyond just their net zero goal.” In other words, after using the decarb tailwinds to get past the tipping point, the company discovered multiple concrete benefits for cutting energy use (cost savings, operational improvements, brand value, etc.). Those benefits still exist, so the program is still full steam ahead. Once energy-saving projects begin delivering ROI and sustainability teams gain influence, it’s difficult (and often illogical) for executive leadership to pull the plug, even if the external political narrative has shifted.
The momentum is especially strong for companies with global exposure. A U.S. firm owned by a European private equity parent, for instance, might have to upgrade its sustainability performance to meet EU expectations, regardless of U.S. policy. Bendewald gave the example of a biotech manufacturer with European investment that faces aggressive sustainability requirements from its owners.
What about companies that didn’t jump on the bandwagon in the last few years? Here, we do see a gap. Firms that were late adopters might find it harder to justify kicking off a decarbonization program in today’s political climate. They missed the tailwind and now face a headwind, at least narrative-wise. Getting started requires focusing purely on the bottom-line benefits.
Bendewald says you rely on the “bread-and-butter” incentives and business cases that have always existed: “Crazy high incentives in the Northeast… certain clients get zero-cost financing for five or seven years through the utility or programs. That stuff’s been around a long time—really no change. It’s just pure, like, I’m a facility manager, I get stuff that’s low cost, a really good business case, I’m going to take that to my boss and get it [approved].”
In other words, energy efficiency always made financial sense in many regions thanks to good old ROI math.
Government entities, especially at the federal level, have felt the whiplash of the political shift most directly. As noted, federal agencies had been gearing up to meet new sustainability mandates that are now paused or cancelled. However, that doesn’t mean all government energy projects died. In many cases, it just means they’re being reframed in terms of cost savings and resiliency rather than carbon metrics. “We have a major focus on federal work that we’re actually winning, because energy work is efficiency work at its core,” says Ford of InSite’s public sector projects.
Agencies now more than ever want to cut operating expenses and protect against service disruptions, which leads them to the same solutions (efficient equipment, better controls, on-site renewables/backups) that also happen to reduce consumption and emissions.
One sector that has surged unexpectedly in decarbonization interest is hospitality—hotels and large travel/leisure operators. Historically, hotels were laggards in sustainability; owners often balked at investments because they could pass energy costs to guests, and there was always a tension between franchise owners and the big hotel brands.
Now, several things have changed. First, the major hotel brands (Marriott, Hilton, IHG, and others) have all made public climate commitments to slash emissions by 2030 and hit net-zero by 2050. They are pushing these expectations down to franchisees.
“In hospitality, there’s always been the push and pull between the building owners and the brands,” says Ford. “Now there’s a concerted effort among the brands to really push owners to reduce carbon. They’re pretty unified on this. If you’re an owner-operator, it’s really hard to find a brand that’s not going to ask you to at least report [your carbon] or hit goals.”
“We’re seeing hospitality clients come to the table in droves, in a way they never have before,” Ford shares.
Many hotels have energy-intensive systems (think on-site laundry, pools, commercial kitchens) that historically were hard to decarbonize without compromising service. But newer solutions are emerging—for instance, high-efficiency electric heat pump systems can now handle hotel hot water and laundry needs in certain climates, and all-electric hotel designs are becoming viable. “They’re looking at things like on-site laundry—it has an unbelievable carbon footprint—and we’re just now getting technology in place where it makes sense to do it,” says Ford. “Fully electrified hotels… in some regions, you can definitely do that now.”
This tech progress means that what was once impractical (e.g. ditching gas boilers) is now on the menu when hotels plan renovations, especially in forward-thinking markets. It lowers the barrier for hotels to act on the sustainability push coming from above and below.
As Ford summarizes, “It’s a combination of technology improvements, the brands’ consistency, and the regulatory environment reaching a critical mass.” Even if a hotel owner is personally indifferent to climate issues, they’re being pulled into action by brand requirements, emerging regulations, and the straightforward logic of cost savings.
Healthcare is another sector experiencing a late awakening to decarbonization—and it’s largely driven by a mix of cost and risk considerations. Financial pressures in healthcare are helping drive the change. “Would you rather spend your budget on inefficient facility operations, or on patient outcomes and care?”, summarized Ford. When put like that, it’s an easy choice—and it’s driving many hospital executives to invest in upgrades that reduce energy waste.
Beyond cost, the healthcare sector is recognizing its vulnerability to climate risks and its own significant carbon footprint. The sector’s footprint comes not just from energy use in hospitals, but also from supply chains (pharmaceuticals, medical devices), waste (biohazard disposal, etc.), and even anesthetic gases.
As Ford notes, many healthcare organizations are now doing carbon inventory exercises for the first time, and the results can be eye-opening. “We have a healthcare client that just went through a carbon inventory process and they found [they] don’t even know who owns the spreadsheet that tracks their waste data… they couldn’t come up with how much medical waste [they] produce, [or even] how much anesthetic gas [they] purchase,” she recalls.
The exercise of accounting for all emissions sources often reveals data gaps and inefficiencies in record-keeping. “It’s causing them to go back and understand their systems… a lot of these things were formatted around [finance] purposes, not for environmental impacts.” In the case of that client, once the full greenhouse gas inventory was completed, InSite delivered a slate of recommendations that started with better data collection processes. It wasn’t about jumping immediately to flashy new tech—it was about getting their house in order to manage this issue long-term.
Ford also mentioned clients who, despite ongoing litigation over local carbon rules for hospitals, decided to get ahead of the curve. They assume that even if they stave off fines or mandates for now through lobbying or lawsuits, they “can’t avoid this forever… it’s still going to be a regulatory environment with focus on this.”
Healthcare’s decarbonization push goes beyond energy efficiency into areas like waste reduction, sustainable procurement, and resilience. Many hospitals are looking at how to reduce medical waste (a huge emissions contributor when incinerated) and phase out high-global-warming-potential gases in refrigeration and anesthesia. Ford quips that if healthcare was 10 years behind the curve on energy, it’s 25 years behind on waste management—but that too is starting to change, bringing a lot of new players to the table who were never involved in “sustainability” discussions before (e.g. supply chain managers, medical waste handlers).
This broadening of scope means decarbonization in healthcare is gradually being integrated into the overall quality and risk management frameworks of health systems.
Looking across these sectors, a clear theme emerges: pragmatism is the order of the day, and it is continuing to drive decarbonization projects even when the political rhetoric cools. The U.S. federal pullback may have removed some top-down pressure and glossy headlines, but the on-the-ground reality in 2025 is that many organizations have already baked energy and carbon management into their operations—or find themselves compelled to do so for practical reasons.
Local laws, market expectations, energy reliability, cost savings, risk mitigation: these core drivers remain firmly in place. In some cases, they’ve become even more salient now that companies must justify projects in ROI terms rather than just citing policy mandates.
For energy managers and sustainability directors, the message is both sobering and empowering. No, you can’t currently lean on sweeping federal mandates or easy narrative wins about “saving the planet” to get your project approved—those days (for now) are on pause. But you also don’t need to. The business case for smart energy and decarbonization investments is as strong as it has ever been, if not stronger.
In a time of political headwinds, it’s easy to become cynical or lose hope that the transition to sustainable, low-carbon operations will continue. But the stories above show that the transition is alive and well—it might be quietly humming in the background, fueled by common-sense decisions, rather than making front-page news with bold pledges.
In commercial real estate (CRE), the picture is bifurcated. On one hand, building owners are in survival mode right now due to economic stress. Office properties in particular are reeling from high interest rates, low occupancy, and tumbling valuations—some have called it a full-on market crash.
In cities like San Francisco, Los Angeles, and New York, owners have even begun handing the keys back to lenders for under-water office towers. With this backdrop, many building-level decisions are laser-focused on cost-cutting and net operating income (NOI). Virtually no one is approving long-payback capital projects unless they absolutely have to.
As Gridium’s CEO Tom Arnold observes, “they’re not doing anything unless it drives NOI,” and that attitude now carries the day in asset management meetings. “The bar is higher… you have to prove, prove, prove NOI and ROI,” Arnold says. “It’s not enough to report or [just] show direction. It’s like, where is your damn impact?”
For a CRE executive in 2025 it has become perfectly acceptable to stand up and say “I don’t give a damn about carbon in the building if it doesn’t pencil out”—a stance that would have been unthinkable during the ESG fervor a few years agog.
This pragmatic (even cynical) turn has implications for what kinds of projects move forward. Capital-intensive retrofits or deep decarbonization upgrades are largely on hold right now in the CRE world. Arnold notes that many clients have basically frozen big spending: “Our capital projects are flat to down,” he says, reflecting industry-wide deferrals.
However, there is still strong demand for low-cost, high-ROI improvements—the kind that reduce energy expenses with minimal upfront investment. “Our software [business] is growing faster than it’s ever grown,” Arnold adds. Gridium and similar firms offer analytics and optimization software that helps building operators squeeze out savings by fine-tuning existing systems.
Those kinds of operational efficiency measures (tuning HVAC schedules, eliminating wasted after-hours usage, etc.) have quick paybacks and directly boost NOI, making them attractive even in a downturn. In short, CRE owners may be putting off new chillers or solar panels, but they’re eager to find “free money” in the buildings through smarter management.
Meanwhile, at the portfolio and enterprise level, nobody has forgotten about decarbonization entirely. Large real estate investors and REITs still acknowledge that, over the long term, the trend toward carbon regulation and market demand for efficient buildings isn’t going away.
As Arnold told us, the three legs of the stool for landlords—regulation, tenant demand, and investor expectations—are all still pointing toward decarbonization in the long run. The timeline has simply become more uncertain. Many CRE firms are developing decarbonization roadmaps and strategies, even if they’re not funding big projects this year. They want to understand the investment needed when the time (and market) is right. This latent demand is why consulting work for “decarbonization master plans” is reportedly still strong, even as actual retrofit projects are delayed.
Tenant pressure is a real factor here. Major corporate tenants (especially in tech, finance, and other sectors with their own climate goals) continue to insist on lower-carbon office space. They are increasingly asking landlords for energy and carbon data, and choosing buildings that help meet their own sustainability targets. Many tenants have science-based targets of their own and need low-carbon facilities to hit them.
Likewise, real estate investors, including those backing CRE debt, are incorporating climate risk into their risk assessments. Despite political posturing, large capital markets players have not reversed course on considering climate and ESG factors in real estate finance—if anything, insurers and pension funds are getting more granular about it. All of this exerts a quiet, background pressure on CRE owners to keep one foot in the decarbonization camp, even as they publicly emphasize cost discipline.
Perhaps the best way to describe CRE right now is “playing defense” in the short term while still hedging for the future. Regulations will tighten eventually and climate risks are only growing. Ford points out that climate impacts are already hitting real estate hard: “We’re having weather patterns changing… disruptions from flooding, hurricane threats in areas that normally don’t see it, tornadoes increasing. For those reasons, clients are approaching carbon as a business continuity risk.”
A coastal property owner who’s dealt with three “once-in-a-century” floods in five years, for example, doesn’t really care whether the term is ESG or just good engineering—they’re investing in resilience and efficiency so their building remains viable. In the long game, that’s driving decarbonization-related investments (like improved building envelopes, backup power and microgrids, efficient cooling systems) even if the motivation is framed as risk management rather than virtue.
Outside of pure real estate, many corporations embarked on decarbonization initiatives over the past several years—and importantly, those that did have not reversed course. Once a big company makes a public commitment and allocates budget to a sustainability or energy program, it creates internal momentum and constituencies that are hard to simply disband.
We see this clearly in examples like Dollar Tree (case study here), a large retail chain that Mantis Innovations works with. Bendewald explains that Dollar Tree took advantage of the recent trend to kick-start their efforts: “They went through a major executive-level switch—they hired their first Chief Sustainability Officer, then a director of energy and a manager of energy. They built out [a team] to do this.”
Now, even with political winds shifting, “it’s accelerating because they’ve already taken the steps… and the business case for it was beyond just their net zero goal.” In other words, after using the decarb tailwinds to get past the tipping point, the company discovered multiple concrete benefits for cutting energy use (cost savings, operational improvements, brand value, etc.). Those benefits still exist, so the program is still full steam ahead. Once energy-saving projects begin delivering ROI and sustainability teams gain influence, it’s difficult (and often illogical) for executive leadership to pull the plug, even if the external political narrative has shifted.
The momentum is especially strong for companies with global exposure. A U.S. firm owned by a European private equity parent, for instance, might have to upgrade its sustainability performance to meet EU expectations, regardless of U.S. policy. Bendewald gave the example of a biotech manufacturer with European investment that faces aggressive sustainability requirements from its owners.
What about companies that didn’t jump on the bandwagon in the last few years? Here, we do see a gap. Firms that were late adopters might find it harder to justify kicking off a decarbonization program in today’s political climate. They missed the tailwind and now face a headwind, at least narrative-wise. Getting started requires focusing purely on the bottom-line benefits.
Bendewald says you rely on the “bread-and-butter” incentives and business cases that have always existed: “Crazy high incentives in the Northeast… certain clients get zero-cost financing for five or seven years through the utility or programs. That stuff’s been around a long time—really no change. It’s just pure, like, I’m a facility manager, I get stuff that’s low cost, a really good business case, I’m going to take that to my boss and get it [approved].”
In other words, energy efficiency always made financial sense in many regions thanks to good old ROI math.
Government entities, especially at the federal level, have felt the whiplash of the political shift most directly. As noted, federal agencies had been gearing up to meet new sustainability mandates that are now paused or cancelled. However, that doesn’t mean all government energy projects died. In many cases, it just means they’re being reframed in terms of cost savings and resiliency rather than carbon metrics. “We have a major focus on federal work that we’re actually winning, because energy work is efficiency work at its core,” says Ford of InSite’s public sector projects.
Agencies now more than ever want to cut operating expenses and protect against service disruptions, which leads them to the same solutions (efficient equipment, better controls, on-site renewables/backups) that also happen to reduce consumption and emissions.
One sector that has surged unexpectedly in decarbonization interest is hospitality—hotels and large travel/leisure operators. Historically, hotels were laggards in sustainability; owners often balked at investments because they could pass energy costs to guests, and there was always a tension between franchise owners and the big hotel brands.
Now, several things have changed. First, the major hotel brands (Marriott, Hilton, IHG, and others) have all made public climate commitments to slash emissions by 2030 and hit net-zero by 2050. They are pushing these expectations down to franchisees.
“In hospitality, there’s always been the push and pull between the building owners and the brands,” says Ford. “Now there’s a concerted effort among the brands to really push owners to reduce carbon. They’re pretty unified on this. If you’re an owner-operator, it’s really hard to find a brand that’s not going to ask you to at least report [your carbon] or hit goals.”
“We’re seeing hospitality clients come to the table in droves, in a way they never have before,” Ford shares.
Many hotels have energy-intensive systems (think on-site laundry, pools, commercial kitchens) that historically were hard to decarbonize without compromising service. But newer solutions are emerging—for instance, high-efficiency electric heat pump systems can now handle hotel hot water and laundry needs in certain climates, and all-electric hotel designs are becoming viable. “They’re looking at things like on-site laundry—it has an unbelievable carbon footprint—and we’re just now getting technology in place where it makes sense to do it,” says Ford. “Fully electrified hotels… in some regions, you can definitely do that now.”
This tech progress means that what was once impractical (e.g. ditching gas boilers) is now on the menu when hotels plan renovations, especially in forward-thinking markets. It lowers the barrier for hotels to act on the sustainability push coming from above and below.
As Ford summarizes, “It’s a combination of technology improvements, the brands’ consistency, and the regulatory environment reaching a critical mass.” Even if a hotel owner is personally indifferent to climate issues, they’re being pulled into action by brand requirements, emerging regulations, and the straightforward logic of cost savings.
Healthcare is another sector experiencing a late awakening to decarbonization—and it’s largely driven by a mix of cost and risk considerations. Financial pressures in healthcare are helping drive the change. “Would you rather spend your budget on inefficient facility operations, or on patient outcomes and care?”, summarized Ford. When put like that, it’s an easy choice—and it’s driving many hospital executives to invest in upgrades that reduce energy waste.
Beyond cost, the healthcare sector is recognizing its vulnerability to climate risks and its own significant carbon footprint. The sector’s footprint comes not just from energy use in hospitals, but also from supply chains (pharmaceuticals, medical devices), waste (biohazard disposal, etc.), and even anesthetic gases.
As Ford notes, many healthcare organizations are now doing carbon inventory exercises for the first time, and the results can be eye-opening. “We have a healthcare client that just went through a carbon inventory process and they found [they] don’t even know who owns the spreadsheet that tracks their waste data… they couldn’t come up with how much medical waste [they] produce, [or even] how much anesthetic gas [they] purchase,” she recalls.
The exercise of accounting for all emissions sources often reveals data gaps and inefficiencies in record-keeping. “It’s causing them to go back and understand their systems… a lot of these things were formatted around [finance] purposes, not for environmental impacts.” In the case of that client, once the full greenhouse gas inventory was completed, InSite delivered a slate of recommendations that started with better data collection processes. It wasn’t about jumping immediately to flashy new tech—it was about getting their house in order to manage this issue long-term.
Ford also mentioned clients who, despite ongoing litigation over local carbon rules for hospitals, decided to get ahead of the curve. They assume that even if they stave off fines or mandates for now through lobbying or lawsuits, they “can’t avoid this forever… it’s still going to be a regulatory environment with focus on this.”
Healthcare’s decarbonization push goes beyond energy efficiency into areas like waste reduction, sustainable procurement, and resilience. Many hospitals are looking at how to reduce medical waste (a huge emissions contributor when incinerated) and phase out high-global-warming-potential gases in refrigeration and anesthesia. Ford quips that if healthcare was 10 years behind the curve on energy, it’s 25 years behind on waste management—but that too is starting to change, bringing a lot of new players to the table who were never involved in “sustainability” discussions before (e.g. supply chain managers, medical waste handlers).
This broadening of scope means decarbonization in healthcare is gradually being integrated into the overall quality and risk management frameworks of health systems.
Looking across these sectors, a clear theme emerges: pragmatism is the order of the day, and it is continuing to drive decarbonization projects even when the political rhetoric cools. The U.S. federal pullback may have removed some top-down pressure and glossy headlines, but the on-the-ground reality in 2025 is that many organizations have already baked energy and carbon management into their operations—or find themselves compelled to do so for practical reasons.
Local laws, market expectations, energy reliability, cost savings, risk mitigation: these core drivers remain firmly in place. In some cases, they’ve become even more salient now that companies must justify projects in ROI terms rather than just citing policy mandates.
For energy managers and sustainability directors, the message is both sobering and empowering. No, you can’t currently lean on sweeping federal mandates or easy narrative wins about “saving the planet” to get your project approved—those days (for now) are on pause. But you also don’t need to. The business case for smart energy and decarbonization investments is as strong as it has ever been, if not stronger.
In a time of political headwinds, it’s easy to become cynical or lose hope that the transition to sustainable, low-carbon operations will continue. But the stories above show that the transition is alive and well—it might be quietly humming in the background, fueled by common-sense decisions, rather than making front-page news with bold pledges.
Not long ago, “decarbonization” was a buzzword in U.S. real estate and corporate circles. Companies were falling over themselves to announce carbon-neutral goals, and there was serious talk of mandatory carbon reporting. Now, the political winds have shifted—so much so that decarbonization has become almost a bad word in some circles.
The federal government’s stance has reversed course: a concerted war on “ESG” principles has taken hold, and several Biden-era climate initiatives are being rolled back. The U.S. Securities and Exchange Commission recently halted its defense of new climate disclosure rules, effectively shelving a major federal push for corporate carbon transparency. The Department of Energy moved to delay new efficiency standards for federal buildings, undoing a policy that would curb fossil fuel use in government facilities.
Federal climate funding is under pressure as well. House lawmakers aligned with President Trump’s agenda have proposed slashing many incentives from the Inflation Reduction Act, including clean energy tax credits and energy efficiency programs. Even the popular Energy Star program—long a bipartisan mainstay—faces a potential shutdown amid budget cuts. All this paints a picture of an inhospitable political climate for decarbonization at the national level.
Yet, talking with energy management practitioners reveals a different story on the ground. Despite the federal pullback, it’s still largely business-as-usual for energy and carbon-cutting projects. The fundamental drivers haven’t changed.
In fact, organizations that ramped up efforts during the recent tailwind years are continuing on momentum. Energy management and efficiency projects made good business sense before, and the boost from a few years of pro-decarbonization policy was just that—a boost—not the whole reason these projects move forward.
As we heard in recent conversations with three experts—Mike Bendewald of Mantis Innovations, Tom Arnold of Gridium, and Kylie Ford of InSite—market realities and on-the-ground economics are still driving decarbonization projects, even in 2025’s skeptical political climate.
Bendewald shared that their decarbonization consulting and contracting business is holding steady across sectors. Momentum for energy and carbon programs continues, largely because many organizations had already committed to these efforts before current market uncertainties. Mantis is still seeing forward movement thanks to that existing buy-in.
Arnold explained that while retrofit projects are flat or down, their energy management software business is booming. Gridium focuses on delivering low-cost, high-ROI operational savings for commercial real estate (CRE), which is exactly what building owners are prioritizing right now. Meanwhile, demand for decarbonization roadmapping remains strong, as owners want to prepare for future investment even if they’re not spending now.
Ford noted a shift in priorities across their client base. InSite offers energy management, benchmarking and ongoing commissioning services across sectors. While government clients have tightened budgets and shifted to a cost-savings mindset, the firm has seen rising momentum in hospitality and healthcare with CRE holding flat on the whole and presenting new opportunities in certain markets..
Below, we explore what is still propelling these efforts forward. From local laws and investor expectations to energy prices and sector-specific pressures, multiple factors are keeping the decarbonization movement alive and well.
While federal requirements stall, state and city building performance standards are increasingly picking up the slack. Major cities and jurisdictions—from New York City’s carbon caps on large buildings to Washington State’s energy performance standards—continue to ratchet up requirements. More local laws are coming online each year, often with stiff fines for buildings that don’t improve.
Even if some owners fight these regulations in court (as is happening in Colorado), most recognize they can’t count on litigation to solve their long-term exposure. “They still want to do something about their risk long term even if fighting it short term,” as one interviewee observed. There’s a growing sentiment in the market that regulations—at some level—aren’t going away. Owners are using this time to get their arms around their carbon and energy performance, so they’re not caught unprepared later.
Private-sector carbon commitments remain a powerful force. The number of companies setting science-based climate targets continues to rise steadily despite the noise. In fact, over 10,000 businesses globally have now committed to science-based emission reduction targets as of early 2025—a 29% jump from 2024.
Many big U.S. companies are among them, and investors are still watching. Large asset managers and banks, despite the anti-ESG backlash in some political quarters, haven’t broadly pulled back on assessing climate risk. They recognize that physical climate impacts pose material financial risks.
The world’s biggest investors and corporate giants see worsening floods, storms, and heatwaves as serious business threats—touching everything from facilities to supply chain. As a result, these stakeholders continue to expect climate action from companies as a matter of prudent risk management, not just “do-goodery.”
Notably, some states are stepping in where the feds backed off. When the SEC’s nationwide climate disclosure rule got stuck, California passed its own laws to force the issue. The state’s new Climate Corporate Data Accountability Act (SB 253) will require large companies (over $1B revenue) doing business in California to publicly report their complete greenhouse gas emissions, starting with 2025 data. A companion law (SB 261) mandates disclosure of climate-related financial risks by firms over $500M in revenue.
California’s move essentially ensures that thousands of U.S. companies must continue measuring and managing carbon as part of normal business—a state-driven substitute for the scuttled SEC rule.
Another tailwind is coming from the energy markets themselves. The transition to cleaner energy is underway, and, as both Bendewald and Ford noted, “you can’t just turn it off now”—even a more fossil-fuel-friendly administration can’t overnight reverse the mix of renewables and retiring plants on the grid.
One effect of this transition has been increased volatility in energy prices and demand charges, which hits organizations’ bottom lines. In some regions, this price signal has been impossible to ignore. Bendewald gave the example of the PJM electricity market (covering much of the Mid-Atlantic), where a recent forward capacity auction sent prices skyrocketing for large power users. The result: certain customers are looking at “their energy costs… increase by 50% within the next year” due to surging demand charges. This wake-up call is directly tied to factors like data center load growth and the influx of intermittent renewables on the grid.
You can call it a consequence of decarbonization policies or simply of economic growth straining infrastructure, but the takeaway for energy managers is the same: higher costs and reliability concerns if they don’t take action. That drives more interest in solutions like load management, advanced controls, on-site generation, and efficiency upgrades to buffer against volatility.
“It’s an energy transition issue… It’s going to raise costs if you’re not managing it,” Bendewald says. “When you show [clients] that their costs will jump, they pay attention… The solution is load management—when are you using power, and are you reducing your power through efficiency or controls or demand response?” In short, the push for cleaner energy has introduced new operational challenges (and opportunities) that smart building operators are addressing with decarbonization tools—because those tools also save money and improve resilience.
In some regions, the motivation is being framed less as “saving the planet” and more as keeping the lights on. Ford notes that capacity constraints are leading local authorities and utilities to promote demand reduction for reliability: “State and local jurisdictions [are] trying to reduce building footprints not really because it’s a sustainability effort, but [because] the grid [is] being overtaxed… it’s being framed as energy security and continuity of supply. The less energy you consume, the better position you can be in.” This is another reason efficiency and load-shifting projects are still getting green-lit—they help ensure business continuity in an era of stressed grids.
Taken together, these enduring tailwinds—policy action outside the Beltway, investor and corporate climate commitments, and energy market economics—are sustaining a strong baseline of activity. But how this activity manifests can vary a lot by industry.
Let’s dive into a few key verticals (CRE, Healthcare, Corporate, and Hospitality) to see where decarbonization stands in mid-2025.
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This is a great piece!
I agree.