The world we are living in is changing, and the twin drivers of climate change and ethics are impacting many areas of everyday life. For the Corporate and Commercial Real Estate (CRE) sectors, these factors manifest themselves as the need to reduce CO2 emissions and the adoption and compliance with Environmental, Social, and Corporate Governance (ESG).
I firmly believe that CO2 reduction and ESG compliance can be addressed through a combination of technology and changes to working practices.
In the following blog, I will talk about some of the current issues and trends in the CRE market and how the necessary energy reductions from real estate need to be part of a holistic approach on a worldwide basis.
Climate change is now recognized as happening and as being the result of increases in greenhouse gas emissions. And CO2 is the most prevalent of these.
To address the increase in global warming, the United Nations Framework Convention on Climate Change (UNFCCC) has set a target of securing global net-zero emissions by 2050. This should keep the 1.5-degree global warming limit, as agreed in the 2015 Paris agreement, within reach.
Real estate is one of the largest sectors in terms of energy consumption (about 40% of global energy) and emitters of greenhouse gases (approximately 30%). It is therefore an obvious target for change when trying to drive down energy consumption and the resultant CO2 emissions.
Most new buildings usually incorporate energy-saving technology as standard, as smart buildings become the norm. However, new buildings, by their very nature, require large quantities of energy and natural resources for their actual construction and operation.
The construction of a new smart building is therefore not necessarily energy-efficient. Energy utilization for any new building must be carefully analyzed and minimized where possible.
The obvious target, therefore, is to look at existing real estate and identify where energy savings can be made. How can buildings be made more energy-efficient and drive down CO2 emissions?
But for any organization to be able to make energy savings, it first needs to understand its energy baseline. How does it use energy? Where is the energy used? What uses the most energy? It needs to collect data about heating, ventilation, and air conditioning equipment (HVAC), temperature levels throughout its buildings, and even how its space is used.
Traditionally, this is done using a Building Management System or BMS. A BMS is a system used to control and monitor a building's mechanical and electrical equipment, including ventilation, lighting, power systems, fire systems, and security systems. However, by 2013, less than 10% of large buildings had a BMS installed; today, the figure is only around 15%. This means that building managers in 85% of the buildings do not have access to critical energy utilization figures and do not have a baseline to make strategic decisions. Even if they decide to implement any changes, the impact and results cannot be appropriately measured or quantified.
So how can the correct data be collected?
The simplest way to do this is to use an IoT-based sensor solution. Installing temperature sensors exactly where they are needed, in offices, communal areas, by windows, and so on, will give a facilities manager a complete view of the temperature spread throughout their real estate.
Temperature sensor on wall in main office area.
Our IoT sensors and infrastructure have been designed to simplify data collection and provide the necessary data points needed for actionable insights and a proactive approach to facilities management.
We have developed the world’s smallest industrial-grade wireless sensors. Using peel-and-stick adhesive, they can be installed anywhere, exactly where needed, and require no configuration or setup. Non-technical personnel can install them in minutes with zero-touch connectivity.
Data points are automatically collected every 15 minutes, giving granular and near real-time information. Using an analytics application or modern BMS solution, developed by one of our partners, the data can be intelligently analyzed to indicate where appropriate changes to the heating, ventilation and air conditioning equipment should be made. This optimizes their performance and saves energy.
The ease of installation, long battery life, granularity, and zero-hassle sensors provide all the environmental monitoring data that is needed in minutes. The beauty of the solution is that it can be retrofitted into any existing building, making energy management and CO2 reduction a possibility for everyone.
Analysis of data points allows CRE managers to identify and target specific areas or equipment for change. For example, heating or air conditioning equipment can be turned down during quiet times, with even a reduction of just 1 degree resulting in substantial energy savings.
Once the energy baseline is understood, companies can allocate energy charges more accurately. The traditional way to do this is to charge a cost per square meter, but I strongly believe that this needs to be changed for it to be more people-focused. By allocating energy charges per user, there are clear advantages for those wanting to drive down costs.
In a multi-tenancy building, there is little or no benefit to one company being energy-sensitive whilst the other tenants are not. Using the traditional method for energy cost allocation, any savings will be attributable to the per meter charge, with all companies sharing the benefit.
A move to per-user charging will drive overall company efficiencies as well as provide healthy competition between different departments or different locations within the same organization.
Motion sensor in main office area.
Once HVAC energy consumption has been understood and managed, through data collected from temperature sensors, the way that real estate is used can then be considered.
For example, motion sensors record data points for office or room utilization. If a room is identified as being empty, the heating can be reduced until people return. This saves energy and money.
Proximity sensors located inside door frames generate data points that indicate if a restroom has been used. Analyzing the data allows cleaning schedules to be tailored to meet actual cleaning requirements instead of having a fixed, pre-defined, cleaning rota. Again, this saves time, money, and ultimately energy.
During the Covid pandemic, when office-based workforces were reduced, energy and space utilization remained unchanged. Whole buildings continued to be heated; staff were usually dispersed throughout a building; and lighting continued to be programmed at fixed times.
With proper staff management, personnel could have been “grouped” together in locations so that only those parts would need heating and lighting. Again, motion sensors and proximity sensors could provide the raw data on which management could base their business decisions.
Environmental, Social, and Governance criteria are becoming increasingly important for all corporations. ESG criteria cover many aspects of a company’s collective conscientiousness regarding social and environmental factors, including energy efficiency, climate change, and CO2 emissions.
They are being used by investors to evaluate potential investments and by the public as a measure of moral and ethical compliance.
Therefore, adopting measures based on data provided by our range of intelligent, tiny, sensors is an important part of assisting an organization to improve its ESG compliance. Doing so, they become a much more attractive investment opportunity or a preferred place of employment.
Energy consumption and CO2 emissions are issues for the entire world. The CRE market sector, as one of the largest consumers of energy in the world, has a significant part to play in what should be a worldwide drive to cut energy usage and CO2 generation.
Simply constructing new, smart buildings is not the way to go. The use of resources and energy for the actual construction often outweighs the benefits that will be delivered from having an intelligent building.
Therefore, understanding and changing energy consumption within existing real estate must be the thing to do.
Using IoT-based sensors, that are easy to install, have a long battery life, automatically monitor 24 x 7, are scalable and affordable, allow the CRE facilities managers to collect and use data points for decision making.
When combined with an analytics engine or BMS application from a DT partner, the real estate manager will have clearly defined actionable insights. These will identify where heating systems can be turned down where air conditioning is not required or if ventilation is not needed as no one is present in that part of the building.
Once changes have been made to equipment, the resultant energy efficiencies will be measurable and demonstratable. Both of which improve an organization's ESG status and level of compliance.
Finally, moving to a charging model based on a cost per user rather than on a square meter basis will be a further driver for organizations to become more efficient, especially in a multi-tenancy environment.
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