Buildings account for about 40% of all U.S. energy consumption and a similar proportion of greenhouse gas emissions (EESI). From decarbonization to weatherization to grid modernization, there is a vast universe of sustainable innovations capable of solving or significantly slowing this environmental disaster. Yet, until recently the slow adoption rates and rollout of these solutions have stymied the enormous potential for an energy conservation revolution.
Much of what is fueling this change can be boiled down to three letters: E-S-G (environmental, social and governance). Today, tightening regulations combined with growing demand from investors, users, and those working within the industry, are placing a premium on strong ESG performance. This has, in turn, spawned a revolution in new materials, systems, and technologies to meet ambitious goals of these stakeholders in reducing energy consumption, carbon footprint, and waste in the built environment.
Major American cities like Los Angeles, New York, and Chicago as well as the European Union and other governments around the world are taking steps to curb building energy consumption and emissions and to promote ESG goals. As an example, New York legislation passed in 2019, which sets emissions caps for buildings larger than 25,000 square feet, is expected to reduce large buildings’ emissions 40% by 2030 and 80% by 2050. To meet these aggressive targets, building owners are implementing energy efficiency upgrades and/or decarbonizing their energy supply. Similarly, San Francisco has pledged to transition large commercial buildings to 100% renewable energy and to create a decarbonization initiative for both new and existing buildings.
Global real estate investors and building occupiers are also stepping up – demanding truly sustainable buildings that meet new standards for performance. According to the Forum for Sustainable and Responsible Investment, prior to 2020, ESG factored into institutional investments in U.S. assets totaling $11.6 trillion. A huge number indeed, but small when considering that ESG was an investment determinant across $16.6 trillion in U.S. assets in 2020 – a 42 percent increase.
On the occupier side, in addition to energy efficiency and sustainability, tenants want buildings that are smart, clean and promote wellness – desires that have been underscored by the pandemic. A KPMG survey found that 83% of building owners expect an increase in tenants’ demand for sustainable and environmental-friendly buildings as a result of COVID-19 (KPMG).
Increased prioritization of sustainability and broader ESG considerations are influencing the way professionals and technologists are approaching building projects. From energy efficiency solutions to sustainable materials to modular and prefabricated construction methods, this spells opportunity for nearly every player in the built sector.
As part of a panel moderated by Christopher Hoyes, Principal at Roland Berger, attendees of the BuiltWorlds’ Buildings Conference will have the opportunity to learn more about the impact of ESG on the creation and adoption of new tools in building design and development. The panel will highlight the potential returns that come from viewing emerging ESG technology not only as the new normal, but as an advantage for their clients and the built industry as a whole. Panelists will include Susan Heinking of Pepper Construction; Kathleen Egan, CEO at Ecomedes; Ryan Spies, Vice President of Sustainability at Clayco; and Cara Kennedy, Vice President of Sustainability at Jones Lang LaSalle.
For more information or to register for The Buildings Conference, please visit: https://builtworlds.com/event/buildings-2022/