Brad Dockser, CEO of GreenGen, addresses the impact of President Trump’s executive orders on commercial real estate, the climate economy, and sustainability investments.
The Trump Administration’s new executive orders have generated significant attention, particularly regarding the future of climate policy and clean energy investments. Here’s a breakdown of what we see as the impact on commercial real estate:
1. Executive Orders on Energy & Climate
Paris Agreement Withdrawal
Trump’s exiting the Paris Climate Agreement makes clear the new administration’s priorities, but it is expected to have little direct impact on commercial real estate.
What this means for clients: Some may see this as a means to slow down emissions reduction efforts but ultimately energy efficiency investments in real estate have a financial return. Macro trends – local (city and state) governments, capital markets, countries, corporate decarbonization goals, customers, and a general demand for more sustainable practices – will continue to push solutions that reduce carbon emissions because it’s clear they are also profitable. Air quality, tenant health, and climate-related compliance efforts will also remain essential for CRE owners.
IRA Freeze
The pause on Inflation Reduction Act (IRA) funding has created uncertainty for remaining, unallocated funds. However, most funding has already been obligated across key programs – the majority of which is going to districts that voted for President Trump in November:
- DOE: $8.8 billion for energy efficiency rebate programs, 94% obligated.
- USDA: $9.45 billion for clean energy initiatives, 97% obligated.
- EPA: $38 billion for climate projects, including 100% of the Greenhouse Gas Reduction Fund.
What this means for clients: It’s highly unlikely that this freeze will have a long-lasting effect on allocated current projects/obligated disbursements given the legal implications of pulling back money that’s already been committed by Congress. The GGRF recipients are moving forward and don’t seem concerned with the change of administration. Funds that are not obligated will likely not move forward but the vast majority of funds are obligated and safe in our opinion.
While this freeze might signal a pullback in federal funding for climate-focused programs, it could also spur increased activity from private funding sources. Capital will remain accessible, though the sources may shift. Projects relying on remaining IRA funding should proceed with caution while considering alternative financing from private sources.
Declaration of an Energy Emergency
President Trump issued an executive order declaring a national energy emergency, aiming to boost domestic fossil fuel production and reduce reliance on foreign energy sources. The demand for energy continues to grow, with artificial intelligence and data centers a massive focus of this administration. Our expectation is that rather than curbing or harming renewable innovation and deployment, there will be a focus on promoting demand via a variety of tools for fossil fuel projects. Increased supply is a key piece of the puzzle to enable us to reach grid stability and energy independence in an “all of the above” approach seems to be warranted. The other key will be permitting and investments in grid transmission. These will benefit all sources of energy – oil and gas and renewables.
What this means for clients: While a short-term focus on fossil fuel may be prioritized, we don’t anticipate renewable energy projects being restricted long-term. The most immediate concern lies with tax credits, which are likely to face scrutiny under this administration but may ultimately prove too popular to eliminate. The ITC solar tax credits remain in place, so if you’re planning to deploy covered renewable projects, we recommend acting quickly to take advantage of existing incentives. Additionally, permitting reforms are expected to accelerate project timelines across the board. We strongly encourage reviewing your solar or EV programs and adjusting your deployment plans to align with these evolving dynamics.
As mentioned, grid resilience will remain a significant concern due to growing energy demand, with necessary investments in transmission and distribution. In the short term, we could see increased intermittency or brownouts in areas with high data center development or already strained infrastructure, like Texas. Additionally, rising water demand to support these data centers may exacerbate water stress, which hasn’t always been fully considered. The rapid influx of data centers may widen energy inequalities in nearby disadvantaged communities, making it harder to access affordable energy.
2. Executive Order on DEI
The administration’s order to terminate federal DEI programs has halted associated policies, training, and contracts. Agencies must comply within 60 days.
What this means for clients: We see some clients following suit and others leaning into their DEI commitments. While sustainability initiatives are sometimes linked with DEI efforts, it’s important to distinguish that the true driver behind sustainability investments is a financial one, reducing operational costs and mitigating risk. These initiatives are distinct from measures associated with DEI. Sustainability offers long-term value that aligns with economic and environmental goals, ensuring businesses remain competitive and resilient in the face of escalating climate challenges and stakeholder demands. As such, we see the market for sustainability-driven projects continuing to thrive. If your sustainability programs are framed within a DEI context, we recommend reassessing the hierarchy and messaging to ensure that all initiatives clearly communicate their true financial value. For assistance in framing or monetizing these efforts, don’t hesitate to reach out to GreenGen—we’re here to help!
3. Climate Risk and Resiliency in Real Estate
While not directly tied to the executive orders, the recent devastating wildfires in California emphasize the critical importance of factoring climate risk and resiliency into real estate. The insurance industry is playing a key role in this shift, increasingly acknowledging the return on investment (ROI) of proactive resilience strategies, while limiting support for properties without them.
What this means for clients: As recent catastrophic events in Southern California have shown, there is ROI for resilience and the insurance industry is an active stakeholder. Incorporating climate risk at every stage of the real estate lifecycle enhances both valuation and operational resiliency. Strategies such as sustainable landscaping, water-efficient systems, and resilient design play a critical role in safeguarding property value. While devastation from recent events was widespread, some areas fared better—thanks to thoughtful design, onsite water sources, and resilience-focused landscaping and maintenance. Insurance markets are increasingly factoring climate impacts into their assessments, underscoring the need for proactive sustainability measures and risk mitigation strategies.
For CRE investors and owners, staying ahead of energy compliance and market trends is critical. GreenGen will keep you informed and help you navigate these changes to ensure success.
Stay tuned for further updates.
– Brad Dockser
For additional information, please reach out to the GreenGen team:
