Key takeaways from our webinar on ‘The Role of Operations in Achieving Net Zero’

November 2, 2022
David Walsh

In 2021, building operations accounted for 30% of global final energy consumption. Given that the vast majority of buildings we will use in 2050 have already been built, reaching zero emissions targets from existing stock through operational efficiency should be a priority for building owners and managers.

In the second instalment of our webinar series on ‘The Future of Property Operations,’ panellists had a robust discussion about the part operations will play on the path to net zero. (If you missed our first webinar on Data and Digitisation, you can review the highlights here.)

Among the topics explored were:

  • Where net zero lies in the operations priority list
  • Net-zero targets and the roadmap to get there
  • Key contributions operations teams can make toward net-zero efforts
  • The importance of a sustainability-focused culture in driving company-wide success
  • How industry headwinds could impact net-zero plans

Our panel of industry experts are all passionate about sustainable operating practices and achieving meaningful gains with the tools operations teams have at their disposal. Participating panellists included:

  • Scott Crellin, National Director of Group Property Operations at GPT
  • Lisa Hinde, Head of Sustainability at Colliers
  • Jon McCormick, Head of IFM and Asset Services at Cushman & Wakefield
  • David Walsh, CEO and Founder of CIM

Read on for the panel’s core insights, or watch the full conversation here.

Net-zero roadmaps

The road to net zero is widely discussed, especially regarding the specific targets various organisations have committed to for reaching that milestone. Some are labelled as overly ambitious, while others are deemed not ambitious enough.

Greenwashing crackdowns from the ACCC and other regulators mean that sustainability claims are now an enforcement priority. At Colliers, Lisa noted that “the race to net zero is definitely on.” Many managing agents, including Colliers and Cushman & Wakefield, are aligning to the Science Based Targets Initiative because it requires demonstrative proof of emissions reductions. Actionable initiatives are prioritised over greenwashed rhetoric—and reduced emissions have economic benefits on top of environmental ones.

Scott emphasised the importance of data in tracking progress toward net zero, saying, “I don’t think you can underestimate the importance of literally tracking what you do, understanding where your emissions are occurring and the richness of that data in how you go about stopping the leakage.” GPT has seen a 40% reduction in emissions over the last ten years, thanks in part to CIM’s PEAK Platform. Dave summarised GPT’s approach as one that others have since followed: “Before you move on to equipment upgrades, optimise what you have.”

For facilities management firms, aligning clients around net-zero targets is crucial to long-term success. Critically, over 90% of managing agents’ operating emissions come from client inventory. As Lisa put it, “We need to be taking our clients along for the ride.” Mapping clients’ emissions along with their own at a global scale is a massive undertaking, but forward-thinking organisations like Colliers and Cushman & Wakefield are serious about achieving net zero alongside their clients.

The role of operations

All panellists enthusiastically agreed that net-zero targets are not a recent addition to the core objectives of an operations team. Instead, they are a fundamental aspect of the ops team’s role. “They’ve got to understand the DNA of their buildings, how they operate, and what they can do to stop inefficient operation,” said Scott. 

Operational efficiency was generally agreed to be a high-ranking strategy on the list of priorities for operations teams when compared to other areas of focus like renewables and offsets. A central goal of facilities management teams has always been to run assets as efficiently as possible. 

Lisa noted that, despite her role as a sustainability manager, her team aims to embed the function organisation-wide. “To do this work at the scale that we need to be doing it, [sustainability] needs to be included as part of the KPIs for everyone operating an asset,” she said. Operations teams have a crucial part to play. 

Fortunately, net-zero pathways are gaining traction at the operational level—in part because it makes economic sense. “There have always been incentives to do this,” Jon said. With energy costs still rising, operating at peak efficiency saves significant operating cost. Agents can pass on outgoing benefits to clients, protecting their revenue and increasing their net operating income. 

At GPT, a recent investment in renewable energy at Chirnside Park retail centre reveals how essential operations teams are in the overall emissions equation. Chirnside Park recently unveiled a smart energy hub, complete with a 650-kilowatt solar system attached to a two-megawatt battery. The building can operate in “island mode” off the grid for about six hours if needed. But the operations team is an essential component of that infrastructure upgrade. “It’s one thing to build it, but then you’ve got to be able to operate it and make sure it’s optimised,” said Scott. Even in instances where renewable energy investments loom large, operations teams are still critical. “They are absolutely key in terms of that day-to-day optimisation, but they are also a key cog in the wheel in terms of how we set these things up for success longer term,” Scott confirmed.

Creating a culture of sustainability

Efforts toward net zero can involve significant change. When we asked our panellists about the keys to successfully embedding sustainability into an organisation’s culture, two key themes emerged: engagement and education.

Lisa noted that sustainability initiatives tend to engage members of the facilities management team that wouldn’t necessarily have been celebrated otherwise, contributing to a greater sense of collaboration and driving toward a common goal. The role of an FM is changing as quickly as technology does, she said. Today’s FMs must be fluent with upgraded systems, IoT devices, and even early-stage artificial intelligence (AI). All of this change makes the field more attractive to the younger generation, but it also increases the difficulty of getting the right education into the right hands.

Jon emphasised the importance of education in achieving a culture of sustainability, noting that more should be done to get young people excited about facilities management. “Most school-leavers don’t even know about the facilities management industry,” he said. “I think we've got a great opportunity now, because people are suddenly realising that the built environment contributes 40% to emissions. Who manages that built environment? It's basically property and facilities managers.” The opportunity for impact is enormous.

Dave stressed the contribution of technology in supporting the human element, saying, “Good data ends up making the life of a facility manager significantly different. It brings them more control and better decision-making around what’s going wrong and how to fix it.” The onus isn’t solely on teams, Dave said; technology providers also have a part to play in making data easier to interpret and more accessible for the team members who need it. The easier it is for more people to engage with the data, the more efficiently teams can operate.

Navigating industry headwinds

Finally, the panel discussed the headwinds facing the industry on its course toward net zero.

The COVID-19 pandemic was a global event that no one could have predicted, with lasting ripples throughout commercial property management. While commercial office space remains a major carbon emitter, many assets are seeing less use due to flexible working arrangements. Even with 80% of cities back to pre-pandemic occupancy rates, there is still room for improvement.  “I think there's a real opportunity in some of the larger cities and the larger properties to refocus on optimisation in the short term,” Jon said. Certainly, asset owners face economic headwinds in the wake of the pandemic. Jon sees reduced operating expenditure through increased efficiency (versus increased capital expenditure) as one solution.

Lisa identified another challenge in requests from overseas investors to adhere to a wide range of (often conflicting) standards. “There’s some work being done in terms of standardising a lot of that reporting and standardising … what that means for property. However, it’s a huge challenge,” she said.

Dave finished with a reminder that, despite formidable headwinds, building owners and operators still retain significant control. “The only thing you can do is focus on what you can control, and that's the operational performance,” he said. “If the price of the asset is decreasing, the only thing you can do to protect profit is to reduce the outgoings.”

David Walsh
November 2, 2022
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