Here’s why sustainable offices make more economic sense

With changing climatic conditions and the evolving needs and expectations of occupants, businesses are increasingly adopting a more sustainable, occupant centric approach to their workplaces. And for good reason too!

Energy consumption in India rose by 4 per cent last year alone, as against the global average of 2.3 per cent, according to the International Energy Agency’s Global Energy & CO 2 status report. India, US and China together account for almost 70 per cent of the rise in energy demand in the world.

Commercial buildings play a big part in this rising demand for energy as they account for almost a quarter of all the energy consumed annually. A Deloitte report also cites the US Department of Energy’s statistics where it says that commercial buildings account for “40 per cent of carbon dioxide emissions, and 88 per cent of potable water consumption.”

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At the same time, millennials, who form a major chunk of the workforce, are more environmentally conscious and know that the workspace can impact their health. Engaged and healthy workers mean greater productivity and improved performance — a boon for companies hiring them. Hence as businesses attract better talent, they are also working towards creating a ‘great place to work’ and being efficient and sustainable is clearly becoming a key differentiator.

Think smart, save energy

Commercial buildings with upgraded smart solutions that harness the power of advanced technologies are significantly smarter, healthier and more sustainable. As the UNEP notes, with proven and commercially available technologies, the energy consumption in both new and existing buildings can be cut by an estimated 30 to 80 per cent!

For example, using solutions that can harness the power of IoT and maching learning to proactively monitor, manage and control a building’s HVAC and lighting systems, organisations can help eliminate inefficiencies and optimizes energy consumption,

Provide optimal occupant experience

It’s a well-accepted fact that a healthy, happy workforce is a crucial component of a productive, successful business. Studies show that aspects such as indoor air quality, thermal comfort, lighting, etc. significantly impact employee health, cognitive abilities, problem-solving capabilities, concentration, and ability to innovate.

Intelligent building management can help building managers handle indoor environments for optimal occupant experience and operational efficiencies.

For example, sensors can use IoT and smart algorithms in the cloud to not only monitor energy consumption but uses the input from these sensors to proactively adjust HVAC  settings for maximum employee efficiency and increased energy savings.

Sensors detect which part of the building gets the most amount of sunlight in real time and directs the HVAC system to improve the cooling in those areas. Similarly, sensors can tell if a room is filled or if it is unoccupied. Based on these inputs, the system can decide which areas need more or less cooling.

With benefits like fresh air, comfortable temperatures and better lighting, green buildings make employees more comfortable. And for employers, having comfortable employees directly impacts the bottom line. When daylight harvesting is used, for example (a practice which maximizes the use of natural light), one study found that workers were up to 23 per cent more productive.

Productivity increased another 11 per cent from better ventilation, and 3 per cent from being provided with individual temperature controls.

Save on operating expenses

Green Buildings, whether new or retrofitted, are significantly less expensive to operate than traditional buildings. Misconceptions about costs have often deterred the adoption of sustainable technologies.

A 2007 opinion survey by the World Business Council for Sustainable Development found that green buildings were thought to cost 17 per cent more than traditional buildings. But according to the World Green Building Trends 2016 Smart Market Report, green buildings are 14 per cent less costly to operate than traditional buildings – with newer buildings saving significantly more in terms of energy costs.

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Additionally, on average, green buildings are worth 7 per cent more than traditional buildings – with market demand for green buildings doubling every three years.

As Georg Kell and Bruno Berthon write in the UN Global Compact- Accenture CEO Study 2010, A New Era of Sustainability – “Good performance on sustainability amounts to good business overall: the imperative to act has shifted from a moral to a business case”.

Boost ROI, rental and sales value

We now know that smart buildings are good for employee productivity, health and comfort. We also know that they contribute to energy savings and a company’s bottom lines. If firms or building stakeholders think smart building technologies are expensive, they should now banish any such thoughts, because the returns in terms of operational costs and energy savings are bigger than the investment.

Payback is expected in three years or even less. The simple formula is P = Vi/S, where P is the payback period, Vi is the initial investment value and S is the estimated annual savings.

Yet another huge advantage of smart office space is that they attract and retain tenants. Vacancy drops while lease revenue goes up. This can enhance lease cost per square foot.

According to a European Commission report on the macroeconomic and other benefits of energy efficiency, the potential increase in sales values goes up to 35 per cent while rental values of smart and efficient buildings can go up by 12 per cent.

Every building, old or new, should adopt sustainable technologies for the mutual benefit of the planet, profit and people. One of the smartest office spaces in the world, The Edge in Amsterdam, is a great inspiration. The future is here and it’s time to get your building up to speed!

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Gaurav Burman -is the VP & APAC President of 75F

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