ESG and missed opportunities in commercial buildings.

The last decade saw more businesses waking up to the need to operate within the context of the reality of climate change and the significant systemic risks it poses. This has given rise to the adoption by investors of corporate assessments based on environmental, social, and governance practices (ESG). 

The pandemic has magnified the focus and the next decade will see greater emphasis on firms having to adopt actions that make a difference across ESG and importantly to prove it. 

There is no universal agreement on how corporate performance to ESG’s will be measured and whilst they will vary from sector to sector, it is probable that reducing carbon emissions will be universal. Because it has the potential to deliver economic and reputational benefits it will be an early target. A focus on buildings, 6% of the worlds annual carbon emissions arise from commercial buildings, would you think be one of the easier ESG actions.

Not so, findings by GWTInsight suggest commercial buildings are amongst the most neglected areas of efficiency. Owners and occupiers need to take urgent steps to reduce carbon output. 

There are many reasons why commercial building systems operate inefficiently, creating waste and adding cost. In the first 40 buildings monitored by GWTInsight, unnecessary carbon creators were commonly found. 

Heating and cooling systems competing, (35%) out of hours systems operation, (65%), equipment operating at 100%, 100% of the time (60%) and no link between the weather and the building systems (80%). Systems or condition data was used to manage the building systems in only 2 of 40 buildings. 

The findings echo Innovate UK’s ‘The Building Performance Evaluation’ study which monitored the operational performance of 50 non-domestic buildings and found nearly every building had higher carbon emissions than predicted during the design phase. In some cases, total emissions were 10 times the Building Emission Rate calculated for Part L compliance.

The advent of technology that feeds real time data on building systems performance and conditions is opening opportunities and it is newcomers rather than traditional sources who are leading the way.

Reds10, one of the new breeds of successful modular construction firms focuses on customer experience and building performance marrying cost, quality, and carbon concerns from construction through operation. Using real time in use data, every source of carbon use is measured, optimised and insights captured to inform the next generation build. A measurable, quantifiable impact.

Recent interesting developments in the insurance sector where risk is home turf, have seen Zurich Insurance and AXA XL both invest in digital technology to capture commercial building systems data and build insights as a route to managing risk, improving resilience, and delivering value to their clients ESG approaches. 

Editors Notes 

GWTInsight is a commercial building data company established in 2018.

Patented technology captures real time data that other systems don’t access. Working with clients in the insurance and property sectors, GWTI combine technology and knowledge to unlock this unseen data to build insights and products that haven’t been previously possible. This creates potential for competitive advantage and the creation of disruptive products that allow users to mitigate risk, reduce cost and carbon and actively address ESG commitments. Contact Iain Wilcox on +44 (0) 7747 758 731. 

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Our technology and knowledge provide value for insurers.

Create real time insights to better inform risk pricing.

Enhance joint risk management, establish a more robust targeted risk mitigation plan.

Reduce losses on claims events.

Improve client retention.

Create a new income stream.

Enable services to corporate ESG commitments.

Shift from policy to service.

Our technology and knowledge provide value for built asset service providers.

Create real time insights to better inform clients.

Automate current services reducing costs of service delivery.

Develop new services impacting the cost and efficiency of building operations.

Enable services to corporate ESG commitments.

Improve design through reliable performance feedback.

Create new revenue streams.

6 Creating new products and services

Because GWTi-Observer captures data in real time, across time and from multiple building systems and operational equipment, it unlocks insights never seen before. 

For insurers it has opened the potential for automation of risk assessments and an opportunity for risk engineers and underwriters to reinvent the evaluation and pricing of risk. It has provided new revenue streams and improved client retention.

For companies designing, manufacturing, and assembling building portfolios it is creating the opportunity to deliver digital twin benefits and will in time, underpin performance guarantees.

For providers of mechanical systems for solar power, cellular telephone networks or remote building provision it facilitates a mercurial shift in cost to service and the ability to disrupt the current servicing market.

For innovative consultants there are many opportunities to combine expertise and knowledge with the potential offered by GWTInsight technology to create innovative and cost-effective ways to reduce cost, risk, and carbon emissions.

5 Strategic and portfolio performance advantage

Capital Allocations. A bank wishes to improve the basis of its £50m replacement capex programme across a range of commercial building types. Under pressure to maximise ROI the traditional sources of information, surveys, manufacturers recommendations and maintenance records prove expensive, difficult to assemble and compare and frequently bear little relation to actual performance of the building. Across time and the whole portfolio data on core system performance and cost to run significantly improves decision making. When combined with user feedback and space use, it creates a powerful tool for capital allocations.

Benchmarking. This has long been the source of value. GWTInsight solutions provide data at building equipment level facilitating performance comparisons across all building types, across zones within a building and across a portfolio.

An outsourcing FM firm wishes to find the sources of added value and to be able to demonstrate to clients why action is necessary and the benefits it can bring. A pilot identified that a focus on large scale energy users like HVAC systems can deliver ROI within months and significant financial and environmental benefits over time.

Optimising use of space. Traditional methods of assessing space rely on point in time surveys or more recently sensors that count the number of people on a floor. Both methods miss essential information about behaviours and changing patterns in use. A pilot project with a leading building environment consultant in the UK, a combination of GWTi-Observer, GWTinsight-Maker and Ubiqisense sensors was able to:

  • identify and immediately allocate a unique code to an individual avoiding privacy issues and double counting often created by movement triggered sensors
  • identify very specific behaviours
  • identify ‘nesting’ where coats, bags and computers are left to claim desks that are otherwise not used
  • identify availability of desks and meeting rooms in real time
  • identify changing patterns of use over time.

The applications range from automating time bound surveys to real time availability of space and rooms delivered to a smart phone.

4 Reducing risk

The realisation of a risk in commercial buildings can create danger to people, reputational damage, disruption to operations, reduced revenue, and the challenge of renewal. Insurance companies share the burden of commercial building failures and have embraced the opportunity to work with clients to better identify and mitigate risk. 

The adoption of a digital solution across portfolios of buildings is now affordable thanks to the innovative GWTI technology. Whether focusing on the building systems or those critical to operations, known risks can be effectively mitigated by real time and over time insights with cost and operational benefits realised.

AXA XL and Zurich Insurance, global insurance companies have embraced the technology which underpins a new and disruptive digital approach to risk engineering. Other Insurance companies are embracing the technology to improve risk assessment, pricing, product offering and cost reduction inside of their operations.

Mutual benefits for clients and providers include:

  • the reduction in losses as any failures are identified in real time
  • reduced claims
  • avoidance of risk through early warnings or identification of hidden risks
  • reductions in balance sheet retentions
  • increased feasibility of self-insuring tier one and lower cost of premiums.

3 Reducing costs and carbon emissions

6% of the worlds carbon emissions are estimated to be caused by commercial buildings in use. The majority is created by energy consumed by building systems. ESG commitments make tackling this area a priority.

Heating, cooling, and ventilation systems (HVAC) in addition to the increasing technology loads and the impact of multiple visits to buildings by those responsible for maintaining them are the key carbon creators. Of course, carbon reduction is not a zero-sum issue, tackling inefficiencies in building systems, eradicating waste, and reducing system failures and the need for maintenance also reduces cost.

Our most common findings leading to action which delivered cost and carbon reductions are:

• Out of hours unnecessary energy consumption
• Systems competing against each other
• Poorly configured systems with few controls
• Failing equipment increasing energy consumption
• Underperforming equipment increasing costs in other systems
• Risk avoidance, the discovery of failing systems and mitigating action.
• Abuse of controls by users

These tactical observations and fixes enable broader cost reduction benefits including improvements in:

• FM strategy optimisation
• Reduced maintenance visits and costs
• Capital allocation and renewal decision making.
• User education and use

2 Meeting contract or regulatory requirements including ESG related reporting

What better way to identify performance and provide proof of delivery than real time and over time reporting on a simply accessed dashboard shared with all parties to a contract? This is exactly what GWTInsight technology can do.

A good example is a project where fines were being incurred for non-performance in a Public Finance Initiative (PFI) contract for a collection of schools. Classroom temperatures were consistently poor leading to multiple complaints from teachers and pupils. Attempts to correct it had failed. A GWTi-Observer and GWTinsight-Maker were used in a pilot project and quickly identified several system issues. The deployment of additional sensors increased insight and solutions were identified.

Sharing the findings with reliable data aligned the client and provider and facilitated the benefits which included better classroom environments, fewer carbon emissions, fewer site engineer visits and reduced energy bills. The financial penalties stopped.

Equally consultants advising on potential for improvement and tracking KPI’s in outsourced contracts can baseline performance with accurate data and then monitor performance over time.

The application of the system in commissioning of commercial buildings is also possible. The use of real time data on installed systems over a test period goes beyond simply checking the building management systems (BMI). The use of sensors combined with building systems completes an accurate picture which can be documented, proven with ‘independent data’ and tracked through occupation.

1 Meeting basic safety standards

From the outset and working with clientsclients, multiple instances of safety systems not working were found. Commonly occurring instances include:

• Low pressure in fire sprinkler systems
• Heat pumps working at 100%, 100% of the time
• Security alarm systems switched off after hours
• Dangerously high temperatures in computer rooms
• Critical safety equipment switched off whilst machines are working
• Machinery consuming high levels of power indicating a fire risk
• Legionella disease protection
• Carbon monoxide and carbon dioxide monitoring

These basic key safety issues can be identified by GWTi-Observer and GWTinsight-Maker technology reducing the risk of danger to people and business operations. And importantly, our technology allows users to monitor systems and set triggers for early warnings or real time alerts.