Property companies have one of the greatest opportunities across any industry to curb climate change and drive a sustainable future for all. Nearly 40% of global carbon dioxide emissions come from the real estate sector. Of this, more than 70% are produced by building operations. So, how can we re-frame this as an opportunity rather than a risk? The answer, in simple terms, is bringing sustainability to the forefront of property operations and keeping it there.
But, doing so is often simpler in theory than practice. The pathway to reaching ‘net zero’ in the context of commercial real estate has not always been well planned or executed. A recent study across major real estate organisations showed that even firms with innovation teams are often resistant to change - the type of change required to build genuine momentum towards net zero.
To facilitate an environment where ambitious sustainability targets stay within reach, there are some tried and tested things to keep in mind. Data, digitisation, operational efficiency, portfolio-wide thinking and collaboration. Think of these as the ‘missing links’ to driving measurable progress towards sustainability, efficiency and productivity across property operations.
While working towards net zero is a significant task, REIT leaders agree that the best starting point is to focus on energy efficiency by collecting accurate data, benchmarking against peers, and setting data-driven targets. Gartner identified carbon footprint measurement as one of three critical sustainability technologies, going so far as to say that every organisation must invest in carbon accounting tools.
Gathering and processing data helps building owners work towards net zero on two fronts. First, it establishes a baseline; and second, it helps inform a strategy to eliminate waste and improve efficiency. The key is to leverage accurate collection methods with timely outputs to avoid becoming data-rich but information-poor. In our recent webinar, Davina Rooney added: “we need to be really focused on data driving information and insight, rather than a very large data lake that someone might choose to go swimming in at some stage.”
COVID-19 may have been an accelerant, but digital property operations were already a rising star in real estate well before the pandemic. Though the industry was relatively slow to adopt new technology compared to others, attitudes have since shifted. Indeed, McKinsey named building technologies as one of ten climate technologies predicted to play a significant role in mitigating carbon emissions.
Today, digitised property operations are transforming the way building owners run their portfolios, enhancing transparency, efficiency and sustainability. Accurate IoT-enabled sensors, Variable Speed Drives and other data collection tools can inform increasingly powerful building analytics platforms that maintain tenant comfort while decreasing energy consumption across an entire portfolio.
Minimising wastage and improving operational efficiency is critical to achieving net zero carbon emissions. After all, even cutting-edge equipment is only as good as its ability to perform at its peak. Energy efficiency can deteriorate 10-30% over two years if buildings are not maintained at their intended operating environment.
Transforming the demand side of a building’s energy system stems from a focus on efficiency (of both energy and process) and demand optimisation (i.e. does demand meet supply at the right times?). IoT sensors and real-time alerts can notify facilities managers and building owners ahead of equipment failures and track how and when tenants use building space so HVAC systems can respond accordingly.
Building analytics platforms can also increase the efficiency of existing equipment, allowing REITs to achieve sustainability targets while sidestepping significant capital expenditure on new equipment.
Reducing carbon emissions across your entire portfolio helps to future-proof your investments, improve customer experience, and gain positive attention from both tenants and investors. Implementing sustainability practices across a portfolio amplifies progress and promotes a shared vision.
Teams often find themselves frustrated by the time, cost and difficulty of operating buildings without access to reliable data, a consistent technology stack, or streamlined contractor management. Adopting a consistent, digitised strategy across your entire portfolio helps alleviate pain points and establish a shared set of best practices that everyone understands.
Collaboration between stakeholders
Platforms that support collaboration across owners, operators, contractors and occupants support faster and better decision-making. In particular, look for technology that supports transparent access to data, clarifies responsibilities, and tracks communication surrounding open and resolved issues.
Optimal building performance requires a holistic approach. Partner with tenants wherever possible to retain focus on customer experience while working toward energy efficiency. Continue educating occupants and others in the supply chain on the ‘why’ behind building-wide changes.
And, wherever possible, grant access to easy-to-digest building data to all who need it. Engineering consultants, building owners, facilities managers, and contractors all ultimately want to monitor and improve conditions under their purview. Software that makes it easy for everyone to see (and act on) the right data at the right time will go a long way toward reaching net zero targets.