Bad Education: Sustainability Systems Do The Square Root Of Nothing If Managers Just Turn Them Off

As the real estate industry comes to grips with the challenges of decarbonisation, it is starting to face a new problem: You can develop the most energy-efficient building in the world, but it won’t reduce carbon emissions if the person running it just turns off sustainability systems at the wall. 

“We developed one building, and when it was operational, we found that it was using double the amount of energy in practice than had been anticipated in its design,” Edge Executive Managing Director UK Fons van Dorst told the audience at Bisnow’s UK ESG Agenda event, held at Deka’s Kings Place mixed-use scheme near King’s Cross. 

Edge is renowned as one of the world’s most sustainable developers, and its buildings have won numerous awards and achieved high sustainability certification scores.

But in this instance, it ran into a problem of education, behaviour and understanding. 

“The facilities manager on-site was doing everything manually,” van Dorst said, adding that rather than using the building’s sensors and software, “he just turned off his computer.

”He had the heating and the cooling on at the same time,” he said. “The way our buildings are designed, they are computers with roofs on them. We realised we needed to operate them ourselves or educate the people who are operating them.”

The management of buildings and the systems put in place to make them more energy efficient is where the rubber meets the road of sustainability, panellists said.

Certifications are of little use if the building does not perform in practice as it should in theory. And that's something organisations like BREEAM are addressing with a move to “in use” certifications that measure how much energy a building actually uses on a regular basis. 

Real estate professionals are becoming more adept at understanding how environmental, social and corporate governance factors will affect the financial performance of an investment. “

You can’t separate sustainability and finance when it comes to underwriting and due diligence,” Aviva Investors Sustainability Director for Private Markets Sylvie Sasaki said. “But there’s an education gap when it comes to ESG data, which is a big barrier,” she added.

Organisations like the Better Buildings Partnership, in conjunction with specialist ESG consultancy Hillbreak, run training courses for real estate firms to educate their staff on various elements of decarbonisation, including building management.

But until such knowledge is widely dispersed across the industry, the process of reducing real estate’s carbon emissions will be slower than it needs to be, not because of lack of money or lack of intent, but because of lack of knowledge. 

Existing technology to manage buildings and measure factors like heating, cooling and lighting can mitigate the consequences of how people use — or misuse — it.

Utopi Chief Technology Officer and co-founder Falk Bleyl spoke about one student in a block using its technology who had the thermostat set constantly to 35 degrees Celsius even when away from the building. 

Flagging this allowed the building’s managers to educate residents on better ways to save energy and money. 

Behaviours among investors that finance real estate are changing, panellists said. A younger generation, educated about the climate crisis and with a desire to do something about it, is increasingly in charge of investment decisions. Those investors are likely to channel capital accordingly.

“There is a younger generation of fund managers and asset allocators looking to invest capital in a way that aligns with their personal values, and that will change the nature of the investment business,” Fiera Capital Head of Sustainable Investing in Private Markets Jessica Pilz said. 

“As the climate crisis becomes more urgent, you’ll increasingly see it impact investment strategy.”