It’s time to prepare for the near future.
As the world slowly and unevenly emerges from the two years of pandemic lockdowns, we are entering a new normal that is increasingly defined by a few critical and unprecedented factors. Environmental, Social and Governance (ESG) values and climate action will be pre-eminent among them, but against a backdrop of rapid technology innovation, potentially large-scale regulatory shift as part of climate action and changing attitudes towards the metrics we value in society.
Traditional values embedded in what has largely been a capitalist and globalised world will change – and quickly. The foundation of the exclusively profit-driven focus at all costs will gradually diminish in importance as society grapples with declining natural resources, increased pollution, a volatile climate and more infectious diseases. This watershed, transformational moment for mankind demands an urgent change as well as new tools at our disposal to deliver cross-disciplinary solutions.
“Geography, natural resources and ‘climate randomness’ will define the prospects of individual nations”
In the meantime, the world is also emerging from a dramatic fall in global economic production during the post-pandemic era, having never fully recovered from the financial crisis of 2008. Complex supply chain issues have led to high inflation that seems both stubborn and pervasive, along with high levels of corporate and government debt, indicating that the low interest rate environment that the world has enjoyed for the past decade will change. In addition, geopolitical relationships are entering a new phase, with less cooperation and more competition, as well as less multilateralism and more self-interest. In this unequal international system, geography, natural resources and ‘climate randomness’ will define the prospects of individual nations. As we saw during the recent vaccine rollouts, those countries and businesses that can lead in research and afford them will fare better.
In this new world, we need to enact urgent climate action and embrace ESG values. To date, climate action has been an issue of choice. In the near future, it will be required to be compliant – a very different calculus.
A key area of focus will be the built environment that functions as the indispensable physical shelter and spatial framework in which we live and work. Collectively valued in excess of US$240tr, the building stocks are by far the largest asset class and store of financial wealth worldwide, yet they are also the largest contributor to carbon and green-house gases, generating approximately 40% of the carbon on the planet. Buildings are also woefully behind in technology adoption, with less than 1% considered smart buildings – defined very simply as having building management systems (BMS) – that can connect and control the devices and technologies inside the building. Even within the commercial real estate sector, which makes up around US$32tr of the total value of building stocks, only about 5% of buildings globally are considered smart. In the past, the voluntary adoption of technologies to reduce carbon emissions has been a missed opportunity to become more efficient; in the future, building owners will run the risk of severe financial impairment of asset stranding as regulatory change, driven by climate action and ESG objectives.
Technologies already exist that can optimise energy consumption across air conditioning and lighting, which make up nearly 60% of typical energy usage in commercial buildings. Intelligent features exist or are being developed, layered on top of a typical BMS that can inform multiple users by deploying basic data on how the building is performing against a growing range of metrics.
“The built environment will need to be environmentally friendly, adaptive to its surroundings and physically secure”
Not only do we need to make buildings more efficient in their use of energy and their impact on the environment, but we must also prepare them for a very different future – one where the built space will be places of human refuge from climate uncertainty. Demands from the people who occupy them will change. The built environment will need to be environmentally friendly, adaptive to its surroundings and physically secure, with air-quality management systems, including bio-security. In time, it will become ‘living ecosystems’ that automatically adjust to changing human needs and external factors, moving from manually reactive to autonomously predictive. Failure to make changes means the places that we depend on for refuge will not be there when the environment becomes more hostile.
Is building a resilient and robust environment possible with existing technologies? Not entirely, but we are very close and developments are underway that will deliver viable solutions. The key will be the rate of technology adoption, which is determined by a combination of regulatory change, the ability to finance and retrofit legacy buildings, and peer pressure and public awareness at many levels in society.
What should a future commercial building look like regardless of its function or spatiality?
A living connected ecosystem that is modular in design, adaptive, predictive and informative; in harmony with its environment and the well-being of its occupants; autonomous in operation, data-driven and providing occupants, owners, users, operators, engineers and regulators with near real-time performance data and financial tools to safeguard multifaceted value propositions and improve financial performance.
A very low carbon footprint, for both embodied and operating carbon.
Reliance on renewable energy sources, with battery storage where beneficial, with energy being optimised.
Air quality management systems delivering stable, clean air by removing chemical, particulate and pathogen hazards to improve human well-being and productivity.
Real-time environmental performance analytics from the individual device level to complex impact analyses that inform management, governing boards, shareholders, regulators and others on key metrics.
Sophisticated lighting systems that reduce energy usage, but also incorporate state-of-the-art human health lighting technology that increases human wellness and productivity.
Fintech, ESG, regulatory and shareholder reporting and audit tools on a consolidated basis across a complex international portfolio of properties.
Predictive and remote maintenance driven, ending the days of expensive engineer callouts to address an unknown problem.
Efforts carried out on an agile technology platform that safeguards data privacy and proprietary IPs.
All of this is possible, but today even the first step is a challenge. Different systems, equipment and devices are used in various existing buildings. Creating a consistent and effective knowledge system to categorise and assess the levels of energy consumption and resilience of existing buildings is difficult. It takes time and resources (ie, manpower costs) to even identify the performance of systems, equipment and devices in most buildings, of which only 5% are equipped with a BMS. With climate action commitments for 2030 based on United Nations’ Sustainable Development Goals (SDGs) – which is only eight years away – our challenges are immense and progress will only happen once we can overcome even basic obstacles in order to align our awareness and vision.
