The Push to Net Zero in The Commercial Property Sector
Buildings are currently responsible for 39% of global energy related carbon emissions according to the World Green Building Council. In our cities, this figure goes up to a median value of 60%. Alarmingly, the percentage rises even further in commercial hubs like London (78%), Tokyo (73%), Washington DC (71%), Paris (70%) and New York (66%).
This data highlights the huge contribution commercial properties can make to achieving carbon reduction targets set out in the Paris Agreement. While the Paris Agreement targets are ambitious, the goal of limiting global warming to 1.5 °C has been adopted by 196 countries and is legally binding. For 1.5 °C to be achieved, emissions need to be reduced by 45% by 2030 and reach net zero by 2050.
However, the commercial property sector faces many challenges in their effort to reach compliance. This includes budget constraints, the underutilisation of property data, people and culture, and sustainability training. This article offers an overview of common challenges faced by the commercial property sector, followed by suggested solutions.
Challenges and Solutions to Achieving Net Zero Buildings
Challenge: Budget Constraints
CO2 as a result of energy consumption accounts for the most significant contribution to carbon emissions in commercial properties. Improving energy efficiency to reduce emissions is an effective tactic, but it can require significant upfront costs depending on the route you take.
The most expensive option involves capital expenditure, which requires a lot of expense for minimal gain. CAPEX projects are costly, time-consuming and often disruptive to tenants and operations.
Solution: Operational Improvements
A better option is to improve the efficiency of your existing equipment and systems. Improving the performance of equipment through optimisation or tuning can provide immediate reductions in energy use.
When choosing which systems to focus on first, it is worth noting that heating, ventilation and air conditioning (HVAC) systems typically account for 38% of a building’s total energy consumption. Tuning or optimising your HVAC system alone can yield a 10-15% energy reduction. So, where do you start?
Building management system (BMS) control strategy reviews are a good place to begin. The following strategies can be applied year-round and often yield impressive results when supported by building analytics data.
- Outside air temperature lockouts
- Cooling tower temperature control
- Chiller cooling & boiler heating calls
- Zone temperature set points
- Economy mode operation
- Night purge operation
- CHW temperature setpoint
Download CIM’s “A Guide to Property Sustainability Performance” for a complete breakdown of the strategies listed above.
Challenge: Effectively Utilising Your Building Data
Data is key to monitoring and managing energy and CO2 in commercial properties. However, this crucial element can typically be the most challenging. While many properties generate an impressive stream of data from an array of equipment and sensors, there is always the risk of becoming data rich but information poor.
The three main challenges are first accessing the right data:
- In many cases, your property data is controlled by vendors and can be costly to extract and make visible.
- Secondly, you will need to make sense of the data, which can be challenging because it tends to be poorly configured.
- Finally, your organisation needs to understand what to do with the data or how best to utilise it and turn it into actionable insights to guide your team’s decision-making.
Solution: A Building Analytics Platform
A building analytics platform ingests data collected from a property or number of properties and turns into information that can be used to make faster and better building management decisions. It does this using advanced fault detection and diagnostic (FDD) algorithms to continuously monitor all building equipment, immediately identifying opportunities for greater energy efficiency.
Given that energy efficiency is directly linked to CO2 emissions, building analytics are an excellent way to utilise your property data in a way that directly impacts your ability to meet net zero targets. In a recent example, a property development group, Kyko Group, achieved a 32.3% drop in base building energy after deploying a building analytics platform on a 10-story office building.
Challenge: Developing a Net Zero Culture
The strategy of “if you build it, they will come” may have worked well for Kevin Costner in the 1989 fantasy, Field of Dreams. The reality, however, is very different. The regulatory pressure on companies to achieve net zero targets means many organisations are scrutinising every aspect of their business to ensure targets are met. This includes culture.
Solution: Take an Integrated Approach
The strength of any organisation comes from its people and if net zero ambitions are to be realised, a culture of sustainability must be built from the top down and bottom up. In a recent CIM hosted webinar, Amanda Steele, Executive Managing Director of Property Management at CBRE highlighted the importance of gathering input from people at every level and every asset class type when implementing change in an organisation.
Data and analytics form the basis of informed decision-making and prove invaluable when creating a clear roadmap toward net zero. Decisions based on gut feeling offer little value on a journey where accurate monitoring, reporting and communicating wins drive cultural shifts towards sustainable thinking.
Deloitte, when addressing the pivotal role of culture in reaching net zero goals, divided the process into the following steps:
Enlightened Board and C-Suite: organisational vision and transformation tends to be top down. For a better chance of success, the tone will need to be set from the top when driving cultural transformation towards net zero. Sustainability and profitability often conflict and run against each other. For that reason, it is crucial that leaders understand and address elements of the current culture that may represent barriers to success.
Leading the Change: the importance of all leaders embodying the change required to move successfully toward net zero cannot be understated. People look to those in charge for queues on how to think, act or behave around sustainability. If organisational leaders don’t embody the change required, then why should the rest of the employees?
Rewarding the Right Behaviours: In most organisations involved in property management, whether they be REITs, commercial real estate managers or facility service providers, a primary metric for success is likely to be financial returns. To achieve net zero, new success metrics should be measured, incentivised and rewarded. By recognising and rewarding sustainable behaviours, they are far more likely to become the new normal.
Owning the Journey: This step drives communal ownership by developing measurements of success in every part of your organisation and then communicating progress across the organisation. Once again, data, monitoring and easy reporting have pivotal role to play here.
Progress towards these goals should be highlighted across the business at every opportunity. This could take the form of a regular feature in the company newsletter to solidify a belief among employees that the company stands for something more than revenue.
Challenge: Technical Know-How
The ambition to achieve net zero carbon emissions requires leaders from facilities managers right up to asset and fund managers through to c-suite to have a technical understanding of the elements required for success. This includes building systems and is especially true of HVAC systems, given the fact that they can account for around 40% of a building’s energy use as outlined earlier.
While many facilities managers have a working knowledge of HVAC systems, they may not be aware of the latest technologies available to drive CO2 reductions. CIM’s PEAK Platform, for example, does not require a facility manager to possess in-depth technical expertise. Instead, the system collects and analyses all of your available building data; equipment IoT sensor data, HVAC, lift and electricity feeds, BMS and NMI feeds, weather data and people data. It then transforms it into valuable information to pinpoint inefficiencies and opportunities for improvement.
Solution: Training and Development
Everyone has a role to play when it comes to decarbonising commercial property. New systems and ways of working are always challenging and people by nature are prone to errors, but can improve and create a positive impact when informed. This makes it important for facilities teams to be equipped with the knowledge, skills and technology required to operate buildings at their peak performance. This in turn leads to reduced energy consumption and lowered emissions to meet net zero.
Leading building analytics platforms feature training as a cornerstone to their offering. But if you are looking for online training resources on the general topic of net zero success, here are a selection worth looking into. Please note, CIM is not affiliated with any of the following training organisations:
Zero Carbon Academy
The Zero Carbon Academy is politically-neutral, unaligned to any business group, not reliant on any national or international governmental body and free from the operational constraints that many academic organisations have to bear. Here is a place for people in companies that are striving to become zero carbon to focus on those goals.
The BRE Academy generate new knowledge through independent research. This is used to create the products, standards and qualifications that help make sure that buildings, homes and communities are safe, efficient, productive, sustainable and enjoyable places to be. Our customers use our expertise, and products and services to deliver their social, environmental and economic goals.
The BSI Group offer a number of courses to help organisations achieve carbon neutrality. Participants will be guided through interactive content relevant to the course learning outcomes, and be directed to free online resources to help contextualize and embed your learning where beneficial.