Reoccupation and ESG: How can the real estate industry deliver buildings which are both energy efficient and healthy?
The pandemic shone a spotlight on the importance of monitoring Internal Air Quality (IAQ) in buildings, but with the obvious concern on sustainability, especially in the context of the recent climate change reports, are real estate stakeholders faced with the challenge of prioritising one over the other? Can there be a consensus?
Last month, on 29th September, Demand Logic hosted a panel discussion at Unissu Re:Connect on “Reoccupation and ESG: How can the real estate industry deliver buildings which are both energy efficient and healthy?” Mike Darby, CEO and Co-founder of Demand Logic, was joined by two industry experts, Francesca Brady, CEO of AirRated, and Carl Brooks, Head of Sustainability at CBRE UK, to discuss the conditions of a possible harmony between sustainability and wellbeing in commercial buildings.
Focusing on wellbeing and improving the IAQ could theoretically mean an added cost to energy consumption, which will impact sustainability and move companies further from their net-zero targets or their climate commitment pledges. On the other hand, focusing solely on energy reduction within office buildings, such as opening the windows for ventilation in the office space instead of using the air conditioning system, can affect occupants’ wellbeing, if the quality of outside air is poor.
Expectancy change on Indoor Air Quality
Environmental Scientist and CEO of AirRated, Francesca Brady revealed that the pandemic has made individuals and companies more aware of the importance of Indoor Air Quality. While pre-pandemic the IAQ was considered part of a fluffy discourse on wellbeing, it is now understood as a factor that is affecting productivity. In fact, as Francesca pointed, a recent study from Harvard found that the IAQ impacts occupants’ cognitive function due to air pollutants like carbon dioxide (CO2), PM2.5 (fine particulate matter that can cause asthma), or volatile organic compounds (VOC - a variety of chemicals that can have short or long-term adverse effects on health). The higher these indoor air pollutants are, the lower people’s cognitive function will be.
There can now be observed a change in occupants’ expectancy regarding the indoor air quality, but there still remains the challenge of understanding the meaning of the metrics. “Unless they are environmental scientists, people don’t know what VOC or PM2.5 are and how these are affecting their productivity. These metrics need to be meaningful and relatable to the occupants in the building.” (Francesca Brady, CEO at AirRated).
Increased pressure to comply to net zero targets
While occupants’ interest in IAQ as part of their wellbeing increases, property management companies are as focused on net-zero as they were at the beginning of 2020. However, they are now more aware of the challenges that come with this target. While the economic recovery is the number one priority for most businesses, the recent climate change reports have demonstrated that not taking any action towards setting and meeting net-zero targets will be more costly than actually taking the required actions at a later stage.
There has also been huge investor pressure for companies to sign up to climate commitments and set their net-zero targets. However, realistically, at the asset level, the recommended guidelines to reach the net-zero targets are challenging, as CBRE’s Head of Sustainability Property Management Carl Brooks observes: “An average office building is now at around 239 KW per meter squared. UKGBC suggests lowering that to about 25. Planning that pathway, understanding where the building sits, and what interventions we need to make to reach those targets means relying on new technology and developments in the market to help us reach those targets.”
Smart building systems to reach harmony between energy efficiency and health
Intelligent demand control with data visibility is a cost-effective solution to achieve good Indoor Air Quality and energy efficiency in buildings. Property managers need to gather IAQ and energy consumption data to understand where they need to make adjustments. This can be done through the installation of smart building systems to capture data from across various data points and devices, and analyse how the demand approach can be driven.
“Occupants of buildings are expecting to have data. It’s the right thing for the landlords to be as open as possible to share that they’re doing everything they can to maintain a good Indoor Air Quality, but they need to start monitoring and make the data relatable to tenants.” (Mike Darby, CEO and Co-founder at Demand Logic).
While there is still work to be done to reach harmony between wellbeing and sustainability in buildings, the two can’t operate in isolation. Smart building systems like Demand Logic’s Building Analytics platform help improve both energy efficiency and air quality. The landlords and property managers that become early adopters of these technologies will be able to use this to differentiate themselves in a very competitive and crowded market.
