December 20th, 2022
Highly energy-efficient buildings are at the top of the list for institutional investors when it comes to selecting opportunities, particularly pension funds who are acutely focused on future proofing portfolios, given their long-term hold play. The macro-economic energy crisis pushing up the price of utilities has served only to heighten capital focus on energy performance and the push for developers to bring forward those opportunities presenting the highest possible ESG credentials.
But designing and building a market-leading energy efficient building is one thing; operating it to its optimum performance is quite another. Its ultimate success requires the operator and residents to be fully educated and aligned in how to use the building effectively. This will rely on the use of technology, to minimise energy use and optimise performance. So how can we identify and rectify the inevitable gaps between stakeholders (capital, developers, contractors, professional team, operators, and residents) and successfully influence behaviour to not only create highly energy efficient buildings, but maximise their potential for in-use energy performance?
This was the topic I and my co-panellists, Polly Simpson (Head of Multifamily Development at Savills), Sam Winnard (BTR Operations Head at PIC) and Simon Bayliss (Managing Partner at HTA) tackled at the recent UKAA Conference. We agreed there has long been a perception that creating “green” buildings has a significant impact on the financial viability of a project, but if embedded within the strategy early and incorporated into design at the outset, then the cost impact can be limited. In fact, it will be financially accretive given the capital’s move towards a “green premium” / “brown discount” mentality.
By creating an air-tight building and incorporating passive measures, with highly efficient energy systems and maximum on-site renewable capacities for generation and storage, operational energy requirements are immediately reduced, making the challenge of operator and resident collaboration more manageable.
But from that point forward, it takes a combination of technology, clear information and education to drive meaningful long-term change in resident behaviour. Smart BMS systems and sensors that monitor in-use energy and provide KPIs to the operator and residents, must be used alongside resident education, providing clear, jargon-free information about personal energy usage patterns. Friendly competition can help, as can bonus systems to reward responsible energy usage, but the key is providing solid information that gives residents a simple overview of their carbon footprint and helpful recommendations for reducing it.
The impetus is now on operators to empower, educate and encourage residents to reduce energy wastage. New research just released by independent study Changing Behaviours found that encouraging residents to make more sustainable decisions in their accommodation can help reduce a building’s carbon emissions by up to 35%. We know that a strong sense of community is key when engaging people in behavioural change, so the work we do to create social value, collaboration and a sense of a common endeavour also feeds directly into the environmental performance of the building. Encouragingly, the report suggests that 65% of millennials and 70% of Gen Z would be prepared to make major changes to their lifestyles to help combat climate change – so perhaps it’s possible to believe that before long, a property’s sustainability credentials and energy efficiency will be up there at the top of the priority list for prospective residents, along with price and quality, when it comes to choosing a place to live.
This article was first published in BTR News on 15th December 2022.