Government policies are pushing homeowners to meet new sustainability requirements, putting pressure on investors to support their efforts to go green.
In response, more owners are relying on AI and other technologies to help them meet the challenge and avoid steep financial penalties, according to a JLL article.
Platforms, such as Hank, which was acquired by JLL earlier this year, work by creating a digital twin of a building to learn how it works, then generating a full system audit that details where it can bring efficiency adjustments and autonomously carry out actions that cover energy savings, asset longevity, comfort scores and indoor air quality.
“From regulation to local laws to investors demanding more transparency around capital allocation, there is a huge push on impact investing,” said Ramya Ravichandar, vice president of products at sustainability at JLL/T, in the post.
“While sustainability is the big theme across the board, we see technology like Hank—the first of many disruptive technologies that we will possess—as a necessity if you want to move through space. Their abilities to improve tenant comfort, reduce energy consumption and improve indoor air quality are just the beginning.
But it’s not just new regulations that are driving change.
“When it comes to socially responsible investing, it’s not just the stick—it’s also the carrot,” Omar Rihani, vice president and head of residential, Project Management Advisors, told GlobeSt.com. “The reality is that you cannot force change just by adopting new codes and ordinances.”
Some of the world’s largest building owners have already pledged to achieve carbon neutrality and zero emissions goals, signaling that ESG goals are championed by the investment community, he said. “Yes, codes and ordinances can catalyze change, but perfection cannot be the enemy of progress.—owners and investors will take the necessary steps to become better stewards of all our resources. »
Fines totaling hundreds of thousands
Still, there’s no denying that some of these new laws pack a punch. Take New York’s Law 97, which goes into effect in 2024. It applies a financial penalty to buildings that violate a set limit, with potential costs running into the hundreds of thousands of dollars, JLL notes.
These regulations target aggressive energy reduction measures for commercial buildings which are typically capital intensive. Examples include everything from moving space temperature setpoints for offices to upgrading expensive heating and cooling infrastructure.
Councilors, meanwhile, are beating the drum on the new regulations.
Conor McGuire, LEED AP, WELL AP, CPHB, Director of Sustainability, N. Reading, Massachusetts, a Columbia-based construction management company, told GlobeSt.com that he sees a disconnect between the BERDO 2.0 of Boston (Building Energy Reduction & Disclosure Ordinance) released in fall 2021, impact on homeowner decisions and enforcement beginning in 2025 and beyond.
“Even though the buildings will not be grandfathered, most of the projects we are working on were well into design or construction as of fall 2021, so we are not yet seeing many project-specific impacts from BERDO. 2.0, but we are bringing it with all customers in Boston (and the Boston area) to help them prepare for this seismic change for energy ratios to emissions requirements,” he says.
Directing capital to green technology
Some developers, of course, have been well ahead of the curve.
For example, a 16-story tower on Manhattan’s Hudson Square, when completed next year, will exceed New York’s 2030 climate targets for office buildings by 45% and align with the carbon-neutral goals of 2050 of the city.
However, countless existing properties in the city still have a long way to go to comply with Local Law 97, which will apply a $268 penalty to each tC02e over the set limit.
JLL cites as an example a 300,000 square foot office building that uses 7.5 million kWh of electricity per year and 80,000 therms of natural gas. This building would exceed the original limits by 54.1 tC02e, a penalty of $14,500, rising to $330,470 in 2030 as the limits tighten.
Ravichandar says as energy reduction mandates are becoming more common, investors need to have policies in place as anchors.
Asset managers are increasingly tackling mandates by investing in AI platforms that help them understand how energy is used in their buildings and enable them to create more efficient systems through predictive technology .
Sustainability measures affect employees
Kurt von Koch, CEO of FM:Systems, tells GlobeSt.com that hWe have seen the demand for quality environmental data in all buildings grow rapidly over the past few years.
“Before Covid, the ability to track environmental data and analyze it over time was primarily used to improve employee experience and productivity,” von Koch said.
“Employees could choose where they wanted to work in the office based on data showing the most optimal light, temperature and even noise levels. COVID-19, of course, has magnified the added benefits of environmental sensors’ ability to track indoor air quality (IAQ) to support employee health and well-being and ultimately their security.
And now, with increasing pressure on owners to meet new sustainability requirements, combined with buildings already accounting for around 30% of carbon emissions, this level of reliable environmental data will go a long way in understanding performance. actual facilities, he said.