Grabbing The Low Hanging Fruit To Decarbonize Your Assets

On Wednesday 3rd July, Simon Joe Portal, Head of Engineering & Sustainability at Drees & Sommer, Annie Marston Ph.D, LEED AP, Chief Product Officer at re:sustain, and Rowan Packer, Executive Director, Head of Sustainability & Social Value at MAPP, joined us to explore asset decarbonisation, looking at current trends, the burden of responsibility, and the most actionable strategies we can take to decarbonise our existing assets.

It was a pleasure hosting our fantastic speakers and the highly engaged audience in this session! In case you missed it, here are some key quotes from this week's webinar.

The session recording can be accessed through the link here:

https://www.netnedge.com/video/DwPTAkZaoYgh

Webinar Highlights

1) Overview of the Industry: Where are we currently in terms of decarbonization efforts within the real estate sector? Any primary challenges?

Simon - “Reporting frameworks, definitions of what sustainability actually is, and requirements on companies to meet certain targets are all moving at pace. However, the government keeps slipping those back for political reasons. And I think that's sending the wrong message. Decarbonisation is being driven forward a lot, particularly through Europe. It is in the UK, but less consistently. It is being driven by businesses, identifying this as an inescapable future trend that is happening, whether it happens this year or in two years, or if the government moves it again, it's happening. Therefore, rather than wait until it all needs to be done in a year and that's really painful, a lot of clients are making sure that they're at least getting their ducks in a row, that they can be in the right place when they need to be.”

“Operational carbon only accounts for 55%-ish of any building's carbon through its lifetime. We try to bring embodied carbon, the carbon locked up in the stuff of a building, onto the agenda as well, because if you're not looking at that, you're obviously not seeing the full picture.”

Annie - “Regulation is moving. In the UK, it's more from citizens’ lobbying. I think there will be that push and regulation will actually have to catch up.” 

“We have a problem with our existing building stock, as opposed to new build. We need to consider ‘how do we utilize that embodied carbon?’ We can’t just add more carbon into the building, in order to decrease the operational carbon. The buildings already exist - I think we need to really look at that building stuff and make sure we're utilizing it efficiently.”

“Optimize, don't retrofit. Retrofit, you're putting carbon back into the building. Optimize first, find the problems, find where the carbon is really a problem, and then put investment in. We're so quick to quickly throw money at a building but it's not practical [...]. You can save 30/40% of your operational energy just by optimizing the building. It's incredibly important that we operate buildings correctly, especially the new ones, because some of the new ones are coming online with very complicated systems. Heat pumps are not easy to control. They're not boilers. They don't just turn on/off. You need to control them properly in order for them to meet operational targets.”

Rowan - “Society has been pushing for decarbonisation, from the bottom up. I think from the top down, we talk about regulation, but that's government level. It’s global money that has really come to the fore [...]. We've seen a lot of pension funds, private equities coming to market with serious sustainability criteria. So I think decarbonization gets a lot easier when the money from the top says that they want to see the boilers removed, as much as then the regulation starts saying it, and then as much as the occupiers are saying it. So it's nice when you see all three.”

“I said to my team, if you've done an energy audit in the last 10 years and the answer was no, I would knock the dust off and try again because I think you'll probably get a maybe or yes now. And that's quite exciting.”

2) Impact Assessment: How can property owners assess the environmental impact of their assets to identify the opportunities for decarbonization?

Annie - “We're still at the point where we don't accurately know what the floor area of our buildings are, let alone how much energy they're using. So the first step is to understand the baseline. Unfortunately, every building is pretty much a snowflake. They all have independent things that happen that make them slightly different from the next, but there are some generalisations. But the best thing to do is first of all look at and understand your building, don't throw things at it straight away, and then you can start thinking about ‘what can we do in this building?’. I'd always go to optimization - what kind of changes can we make, pre-investment. You can really look at the best place to invest, where you're going to maximise your return.”

“Unfortunately, one size doesn't fit all [...]. There's no easy solution but there are solutions. There's no sort of one ‘let's do industrial units and save the world’ - it's not as easy as that. But then it wouldn't be fun!”

Rowan - “When people come to me and say how to get on with decarbonizing, I always say keep it simple. Go and find one suggestion made, whether through an audit or through a study etc. Let's say it's heating. Focus just on the heating - get your understanding, get your experts around the table and just do heating. Because if you try to do heating, cooling, lighting, decarbonization, and biodiversity, it gets overwhelming. Then once you've done heating, you move on to the next, say cooling. And once you've done cooling, you move and so on [...]. Also, there’s the industry saying we have to hit certain targets, and those are all aggregated targets and sometimes that can be quite daunting. Instead, just go and know your own numbers. Learn your own building and just drive that number down.” 

Simon - “It's really important to look at your energy audits as the foundation of a business case, firstly, because fundamentally you need to know how it all ties in together in your specific case [...]. The fact that it's a hotel, for instance, and the fact that it has this system and that system, just like the next door hotel, mean nothing for your actual decarbonisation plan.”

“I think you need to be looking at both the operational side, which is the actual building, how it's controlled, how it works, and what you can really do to bring that down, and also look at the carbon payback of what you're doing. Are the efforts to improve operational carbon worth the carbon associated with them? What impact is it going to make? Does it only have an impact if you actually rip out all your pipe work and install a whole new system? And that starts to already shed a different light.”

3) Tenant’s Responsibilities: What role do the tenants actually play in the successful implementation of sustainability initiatives in real estate?

Rowan -  “Tenants are really, really important. A lot can be done with just pure engagement with tenants, finding low-hanging fruits way before we talk about CapEx or solutions or boxes on walls. So I think tenants play a huge part [...]. Tenants firstly play a part in helping you with the business case, but then they critically play a second part, which is to ensure the sort of compounding benefit of the carbon reduction.”

“I'm sure we've all experienced when you have solutions on solutions, but the energy use doesn't reduce. I think a lot of it has come down to the behavior, attitude, and engagement of the tenant over time. And so if they aren't on this journey with you while you're putting all these fantastic pieces of kit in, whether it be new or existing, I think they can undo a lot of the decarbonization.”

“Every building is different. Even with the tenant responsibility argument, each building will have a different answer, so you can't really tackle it with a generic position. And I hope that's coming through with everybody that, you know, the individuality of the buildings is actually a strong aspect to all these answers.”

Simon - “What role do tenants play currently? Not enough [...]. Real estate’s contribution to climate change is about how buildings are actually being used and I think that that is heavily driven by tenants. The commercial arrangement between landlord and tenant is really important but is a real weak point in how real estate runs as a business. Traditionally, there is such a strong disconnect between landlord and tenant. It's very much this is my side of the picture, this is your side of the picture. However, landlord-tenant relationships that are collaborative and spoke to each other are the ones that are more productive. That is really important for data sharing and reporting on ESG and actually making progress towards decarbonization.”

Annie - “Landlord-tenant communication is very important. A building isn't two separate entities - landlord and tenant are locked together, they don't operate independently and so communication is vital. We need to constantly monitor buildings and make sure that they are optimising the systems we put in to improve the situation [...]. Now for the controversial bit, and a little bit tongue in cheek to be fair, I don't think the tenant has any responsibilities at all. Okay, it's not entirely true but tenants quite literally don't hold the power. So they are dependent on landlord systems. The built environment is for the occupant to be comfortable and work in or live in or whatever. If we provide them an uncomfortable environment, you may as well just go outside and sit in a field. That's not the purpose of the environment. The environment is built to make the tenant and the occupant comfortable. I will put a caveat that I do believe behavioural change does help. It does help if you turn the lights off before you leave the building. But fundamentally, it's that control and it's understanding that these systems are symbiotic.”

4) Decarbonisation Strategies: What are three cost-effective decarbonization strategies that can be implemented quickly in existing real estate assets? 

Simon - “Stop looking for silver bullets. There isn't one. Consider your own building - that’s point number one. Point number two is that the performance gap of systems is a really big driver. And it's the lowest hanging fruit too. This is a lower/no-cap-ex item a lot of the time. It does need care and consideration, and potentially some skills and behaviour though [...]. This is not a ‘go through all your assets and document everything in every building’ plan. Instead, as buildings change and as things happen, build up material passports for your building. There are platforms out there that enable you to do this and, yes, you do also need skill to identify stuff. This passport enables embodied carbon and circularity to be visible on the table when you're making decisions. Fundamentally, if you don't see it, you can't consider it. So get that data in front of you.”

Rowan - “Visit your buildings at night time. It’s one of the quickest, most cost-effective, ways to start decarbonisation tomorrow. Have a look at it, but also have a listen, because night time's quiet. You’ll hear fans and pumps, you'll hear water running behind walls. Meet  the security guard who actually keeps everything safe - that's quite nice for human connection. And this approach is a freebie.”

“80% of our stock is going to be here in 2050 - let's not just put more materials into the building or knock them down, let's try and just use all the stock a lot better. And lastly, know your numbers. Keep it simple, just know your building, and keep it fun. And then as you grow and get through that materiality, where it really matters, then you can get into the deeper, darker, more complicated side.”

Annie - “Controls, controls, controls. We don't need to do everything. Use the experts you've got.  You're never going to get one answer for everything. You're never going to get one solution for everything. And monitor your existing buildings. We spend so much time and expertise in the design phase, and then we leave it to a facility manager to visit the building once a week to run the whole thing. You're obviously not going to get the same level of control or energy that you thought you were. So look at a way to understand it. Look at a way to monitor it. Look at a way to love it a bit more. And hopefully, we can maintain those savings and get to zero.”