Realising the E in ESG – Green Tech and Building Trends

As the property industry continues its response to net carbon zero targets, new technologies are being harnessed to make buildings more sustainable. We wanted to explore the role that green tech is playing, particularly looking at energy management. Baulogic believes that technologies providing better understanding and control of energy consumption not only reduces energy bills and saves energy, but also generates building data with, as yet, untapped potential.

We wanted to interrogate to what extent energy management technologies are having an impact on building trends and how they are perceived by home buyers as well as the property industry more broadly. We also wanted to discuss how the industry should be reacting to the data now accessible via these green technologies.

Baulogic invited six leading property and financial industry experts to a breakfast roundtable event to discuss how we can use tech to transform energy management and make buildings more sustainable.

Our Guests:

Alistair Blackmore, Head of Sustainability, Bidwells

Andy Brading, Head of Estates, Urban&Civic

Natalia Dorfman, CEO & Co-founder, Kita

Joaquim Fillola, CEO, Encore

Chris Martin, Head of BTR, Utopi

Tomasz Romaniewicz, Associate Director, Bond Bryan

Stephen Chard, CEO, Baulogic

Chair: Neil Robinson, Director, Baulogic

 

Green tech in construction and property

Our guests were excited about the potential of green tech in the construction and property industries. They were encouraged by the overarching positive narrative where they are seeing technology tackle the climate crisis by developing greener buildings.

By combining an ecosystem of connected technologies and data collection, it was agreed that there is an opportunity to utilise the unique, broad set of metrics that can be aggregated to build an informed picture about building performance.

The power of data

It was acknowledged that data, including energy consumption, is invaluable to inform and educate not only residents but also developers and the property industry more broadly. It is vital for ESG reporting, however there are challenges in collecting and collating it accurately and making it meaningful.

“A very broad set of metrics is needed for ESG reporting and is unique in its breadth of data types and the range of technologies involved. Some are hard physical assets that need to be installed and the rest is up in the cloud, and you need to get all that together to build an accurate picture of your assets and your portfolio.” – Alistair Blackmore, Bidwells

“Data collection is key, as well as using that data in a meaningful day-to-day environment. Fundamentally if you don’t change peoples’ behaviours, you’re not going to make a difference.” – Chris Martin, Utopi

The role of energy management

Energy management technologies and smart controls can be used to automatically maximise energy savings, reduce energy consumption and help occupiers make better decisions about energy usage.

“From our perspective, it is key that occupiers can control their environment and consequently their energy consumption. Our technology helps occupiers make better, greener decisions. For example, using smart controls to run the heating more efficiently or automatically selecting solar energy. This all has a direct impact on energy consumption.” – Stephen Chard, Baulogic

 

Green tech and energy management in our everyday lives

From the resident’s perspective: education is key

The consensus was that in practice residents in the UK care about green technologies and sustainable buildings, but at this point they are probably unlikely to pay a premium. Studies on the US market accredit a 4-6% premium that people will pay to be in a sustainable building which is probably not evidenced over here yet. The lag between the US and UK market was attributed to lack of awareness and education.

“People don’t necessarily know what sustainability is as an end user, the message is not communicated to residents. It’s an issue for the industry, we need to educate residents better.” – Chris Martin, Utopi

“There is a demographic willing to pay more of a premium – but it’s an exclusive demographic, not your average purchaser. I think this will change over time.” – Tomasz Romaniewicz, Bond Bryan

“Only a small percentage of people will pay a premium for technology that’s going to benefit future climate change, but when rising energy costs impact their pocket and they can see the data, that decision will change.” – Joaquim Fillola, Encore

“There is a communications challenge. A large part of the population believe that a smart house is a scary thing and they are afraid that they won’t know how to use it. How do you communicate to most of the population that this is for them and not an aspiration for their children?” – Natalia Dorfman, Kita

 

Green tech and energy management in our everyday lives

Incentives and policy changes

Not only are greater incentives required to drive demand to live in sustainable buildings, but also policy changes are needed that will see the cost of renewable energy become cheaper.

“On a financial level, if people know their bills are going to be lower in a sustainable building, then that is an incentive. However, we need some policy changes. The price of renewable energy is still linked to the price of gas. Surely one of the benefits of renewables is that it’s not only a lot more sustainable but also fundamentally cheaper for the consumer.” – Tomasz Romaniewicz, Bond Bryan

Attitudes are in transition

While the vast majority of residents in the UK would not pay a premium to live in a sustainable building, there are signs that attitudes are changing.

“With the increasing cost of utilities, we are seeing a welcome change in behaviour over the last year. When people purchase a property, the parameters of the decision is not just the location, and how the property looks, but also how much it costs to run. In the past, purchasers didn’t pay much attention to consumption or utilities, but now they are.” – Joaquim Fillola, Encore

“A recent research case study from a major residential home developer in England highlighted that homes built to future homes standard were estimated to be £13,000 more expensive to build but achieved a premium on the market of £5,000, showing that attitudes are still in early transition.” – Alistair Blackmore, Bidwells

 

Green tech and energy management seeding into design and planning challenges

From the perspective of developers, planners, architects, estate managers

The group agreed that green tech and energy management should play a fundamental role in the planning and design of new buildings.

“For us it’s at forefront of every decision that we make and has been for a long time. I am from the first generation of architects educated on net zero and sustainability from day one. The rest of the world is still catching up.” – Tomasz Romaniewicz, Bond Bryan

“The install of green tech within buildings has got to become standard. The biggest challenge will be retrofitting the older stock.” – Andy Brading, Urban&Civic

When discussing national house builders, the consensus was that they are experiencing huge challenges such as high land values and other external pressures which is impacting what they can do. Therefore, they are largely complying to building regulations rather than going the extra mile.

Building awareness within the industry

The group agreed that the industry would benefit from greater awareness of energy management technologies and educating on the key initiatives that could change behaviours.

“One of our greatest issues is educating the industry about overheating flats due to solar gain and there is a big move to automated electric blinds. Education is also required about controlling heat, as you use less energy by leaving the temperature constant. The temptation is to whack it up when you get home, which means heat pumps are overworking and this uses the most energy.” – Stephen Chard, Baulogic

Data Management

The group discussed the broad reaching benefits of collecting energy and building performance data with many examples given of improved outcomes that could be pursued industry-wide.

“My understanding is that net zero homes may be more expensive to insure, when obviously it should be the reverse. Insurance companies need data to understand the improvements these buildings enable and why they are more resilient”. – Natalia Dorfman, Kita

“Our client (Harrison Street European PBSA portfolio) saved over 20% on utility bills since they gained complete visibility over student occupiers’ energy consumption data. Usually utility bills are included, so our clients are now thinking of setting fair use policies, building it into contracts and incentivising on rent.” – Chris Martin, Utopi

Benchmarking opportunities

All agreed that if there was willingness to share data then the industry will be able to get to a point where it can contextualise the data, create benchmarks and start making comparisons.

“We’ve got to be able to benchmark energy usage against other similar properties. In BTR there are residents’ apps and they want to know that they are the best performing by making direct comparisons with other identical properties.” – Chris Martin, Utopi

“We are relying on the willingness to share info and to get to point of benchmarking and making comparisons we need data about green space areas, use of land and streets, and how people interact. So it’s not just buildings, its wider than that.” – Andy Brading, Urban&Civic

“Anyone with a blended portfolio is really struggling with data benchmarking. They might have set a net zero target but they have no understanding because a significant part of the data is modelled. Better Building Partnership is working on a data sharing protocol. It’s not agreed yet, but even though its commercially sensitive information, it is in everyone’s best interest to share the data.” – Alistair Blackmore, Bidwells

If you would like to find out more about Baulogic’s roundtable events, please email marketing@baulogic.com.