The post Is Sustainability the new key to Corporate Competitiveness? appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

Excerpt: A survey by global management consultants has produced a new measurement for business performance – and for the first time, companies demonstrate that those who invest in sustainability, win.

A new investigative study into corporate competitiveness by global management consultation company Accenture has uncovered a new key strategy to being the best in any field: well measured and implemented sustainability practices.

All sectors change continuously and as technology develops, the way in which companies seek a competitive edge against their rivals changes also. Now more than ever, businesses must act nimbly and be as agile as possible to integrate continuous improvement and stay ahead of others. Company performance is still measured in two traditional ways: Market Cap and Total Shareholder Return (TSR). However, these measures are fast becoming outdated and failing to account for more modern aspects of business performance.

Accenture instead created a Competitive Agility Index, taking into account growth, profitability, trust and sustainability. This is the first time the latter two have been included in such measurement. To create this, Accenture analysed 5,200 points of data from over 350 companies spanning 9 industries.
Rating businesses using the new Competitive Agility Index comparing them to their ratings on the two more traditional measures resulted in real movement. On average, those leading in terms of Market Cap dropped 21 positions, and those leading in terms of TSR dropped 8 positions. Instead, those companies that focused on the new areas of the Competitive Agility Index equally and simultaneously yielded greater revenue improvement and EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation).

In practical terms, the Competitive Agility Index demonstrated real earnings potential for those who chose to focus on sustainability alongside trust, growth and profitability. Raising the Competitive Agility Index scale by one point for a $30bn automotive company saw a 3% rise in revenues – which equals $1bn! Similarly, in the insurance sector, a one-point increase resulted in a 6% EBITDA rise and in energy, a 4.7% increase in revenue growth.
Once assessed against the new Index, companies were categorised into one of four areas. These were as follows:

• Striving to Survive (28%): aggressive intervention required to urgently improve performance, or the business will fail
• Over-Estimated (22%): companies whose value is over-estimated with current market analysis and could be at risk as a result
• Under-Estimated (21%): companies whose value and competitiveness has not been conveyed correctly to the current market

• Disruptive Competitors (26%): those who dominate their sector but must constantly review and adapt approach to remain at the top of their game.

Those who fit into the latter two categories are those who maintain a healthy business balance between the four key elements.
Accenture’s Competitive Agility Index is the first mainstream business performance measure to robustly demonstrate the real, tangible corporate value of sustainability and corporate social responsibility practices. It is hoped that now this will encourage those few businesses who are not considering sustainability thoroughly enough to finally seek advice and new focus on it within their operations.

The authors of the study had previously mentioned in a white paper that this growing interdependence is now ‘hard wired’, saying

“Accountability is no longer just to customers and shareholders, but to society at large. If a company fails to uphold its covenant with customers, it will never achieve profitable growth”. Indeed, even the study stipulates that those who fall within the ‘disruptive competitors’ must continue on the correct path of balance, which it stated “They must continually reinvent or reposition themselves while using an integrated growth, profitability, and sustainability strategy”.

The interdependence displayed between elements now leaves no room for discussion: sustainability is as key as profitability, and this will no doubt not be the last competitive analysis index that displays so.

The post Is Sustainability the new key to Corporate Competitiveness? appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

The post Mind the Gap: Energy Consumption to grow up to 50% over the next 25 years appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

Studies have shown that energy consumption across the globe is set to increase anywhere between 30-50% in the next quarter of a century. For many countries this will include soaring air pollution, oil consumption and greenhouse gas emissions – all of which, of course, lead to rising energy prices.

Whilst the roll-out of energy efficient technologies, products and methods offer real potential to help the problem be reduced and the associated environmental damages lessened, their take-up worldwide is yet to reach a level that could be considered acceptable for the future. This difference between the take-up and usage of such efficiencies and the potential damage current usage would still allow to be caused is known as the “energy efficiency gap” or the “energy paradox”.

The first major detailed study into this area has just published, coined by Professor Richard Newell at Duke University and , sponsored by the Alfred P Sloan Foundation. The investigations aimed to uncover the possible explanations for the paradox and as a result, to identify how to best implement and spread efficiency technologies. The study, called Assessing the Energy Efficiency Gap, draws in work with leading social scientists and US-based scholars, and has been co-authored by a pre-Doctoral Fellow of the Harvard Environmental Economics Program (HEEP), Todd Gerarden.

It has found stark contrast between private and social optimality of efficiency technologies, examining the assumption that some such technologies would not be adopted, despite the fact they would pay off financially, and the assumption that some such technologies would not be adopted despite their projected social payback.

Investigations began by dissecting cost-minimising energy efficiency decisions into their fundamental elements: whether or not they are economically efficient; whether energy operating costs are priced appropriately and understood; whether or not product choices are currently cost-minimising or whether they’ll be affected by later external factors; and finally whether other non-observed costs may inhibit the decision to adopt efficiency measures.

Once these four elements were studied, these are understood in terms of market failures, behavioural effects and modelling flaws. These include the explanations for failed adoption as informational issues, energy market failure, capital market failure, attitudes and business appetites, understated and misunderstood costs, ignored and misunderstood product attributes and the use of incorrect and misunderstood pricing.
Needless to say, Assessing the Energy Efficiency Gap finds all three explanations for method and measure adoption failure to be theoretically sound with some empirical evidence for every category.

The validity from each explanation can now be used to influence future policy and planning around the paradox and be used to justify and effectively bridge the gap that current measures (both adopted and un-adopted) leave behind. High priority should now be given to research that evaluates the effectiveness, cost-effectiveness and economic efficiency of such policies, to not only develop new ones but also to enhance, improve and develop those already in place or planned for the future.

The post Mind the Gap: Energy Consumption to grow up to 50% over the next 25 years appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

The post New Knowledge Transfer Partnership aims to correct Building Energy Simulation Systems appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

A new partnership between the ESRU (Energy Systems Research Unit) at the University of Strathclyde and software provider Arbnco has been launched to calculate and investigate why the energy performance of buildings so often falls below design and intended expectations.

Research undertaken by Arbnco has shown that many initiatives investigating gaps in energy performance are now making use of simulation tools to analyse and estimate shortfalls or overshoots, but these are often not as accurate as they could be; and frequently buildings still don’t match up to expectations set during the design and construction processes. This is all too common a problem, and for developers and property owners leads to higher costs, higher energy consumption, unhappy clients and tenants and distrust in sustainability and energy efficiency systems and products.

Such building simulation systems differ from traditional compliance type models and are not the norm currently in estate management. This crown is currently held by SBEM (the Simplified Building Energy Model). However, the increased usage of simulation systems is likely only to growing and so needs to be investigated. It is this, amongst other efficiency methods, that the new knowledge transfer partnership will be looking into.

The current issue with building simulation tools is often the lack of prior calibration to match the tools’ predictions against current performance. To address this, the new partnership will develop a new software tool that will carry out calibrations to better match estimated and actual performance better automatically, without any manual human input. The aim of this software is to promote high-quality and more meticulous building simulation models. The use of these will be posterior, and should in turn result in more accurate energy analysis and easier decision-making for those who need to call the shots in the operation, maintenance and retrofitting of estates.

This software will work differently to existing simulation tools in that it will employ actual performance data from both the energy and indoor environments to routinely calibrate and re-calibrate models before energy analysis is completed. Alongside this, the program will include an element of ‘wellness’, with both the University’s ESRU and Arbnco studying more into the potential uses of such models to evaluate the synergies between thermal comfort, indoor air quality and energy usage.
Long term, Arbnco intends to integrate the new simulation software created into its product suite.

The director of the University’s ESRU, Professor Joe Clarke spoke of his excitement of the new knowledge transfer partnership, saying: “This KTP will contribute towards closing the energy gap and understanding its causes. KTPs are an exceptional knowledge transfer mechanism, allowing academics to convey research outcomes to a business via a recent graduate. In this way the business can accelerate the transformation of research to new commercial products and solutions.”

Similarly, Maureen Eisbrenner, co-founder of Arbnco, explained:

“People’s health and wellbeing should be at the core of everything we do and we need to ensure buildings are not only energy efficient but a positive environment to work in. The KTP aims to highlight poor performing buildings and, more importantly, the reason behind poor performance. With the project now underway, the software will start being developed shortly. Watch this space for more information”

The post New Knowledge Transfer Partnership aims to correct Building Energy Simulation Systems appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

Continue reading "The ROI of Sustainability"

The post The ROI of Sustainability appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

Excerpt: Sustainability and Corporate Social Responsibility are increasingly becoming business as usual practices but as with anything, they need justification. Yet the return on investment can be difficult to calculate… and it’s not all money off energy bills.

Sustainability is an increasingly popular topic in all business sectors and more companies than ever are moving toward integrating sustainable practises and policies in their day to day operations. However, as with any project internally in an organisation, a business case and projected return on investment is normally required to justify investment and resource. But in the case of sustainability initiatives, it can be complex to calculate this return.

In the US, 40% of the country’s total energy consumption is accounted for by buildings, so most commercial property owners and developers recognise the importance of investing into sustainable upgrades to increase the longevity and decrease the maintenance bills of their portfolio. A survey by Partner carried out in 2015 demonstrated that commercial property professionals rated energy optimisation as the most promising area of investment within their portfolio. Indeed there are plenty of products on the market that now promise a financial return on investment within set periods from 3 years onward.

Opportunities for financial payback for investment within sustainability are stronger than they ever have been, with more benchmarking and practical examples available. Developing a business strategy based on the benchmarking of a property’s energy outputs will result in a considerably more efficiently operated asset. The knock-on impact of this yields higher rents, lower vacancies, faster absorption and lower operating costs. Depending on the country of operation and rebates and incentives available, the costs of implementing energy efficiency systems within properties can be negligible: government incentives should always be researched into.

To reconcile the complete picture of ROI of sustainability measures, factors other than finances need to be taken into account. Regulatory, social and market factors should all be considered. These include, but are not limited to:

Reducing operating expenses
The reduction in energy usage has an obvious result in lower utility bills, but there are other operational expenses that can be decreased by implementing sustainability measures.

Dependent on the area in which the property is, there may be government or state-sponsored initiatives and incentives to lower other costs. Low-Income Housing Tax Credit is one such examples, encouraging greener building usage by offering extra credit to properties with lower emissions. Incentives vary from country to country but can account for up to 35% of property tax savings – a large discount to overall expenditure.

Access to better funding.
Several financing programs available (from both public and private sources) have pre-requisite requirements that now stipulate or favour more eco-friendly building practices. Benefits can include discounted interest rates, additional loan proceeds or preferred pricing.
Greener lending programs often favour multi-property portfolios to encourage accountability and corporate social responsibility.

Compliance updates
As building stock ages, it is often the case that improvements need to be made to meet newer energy and efficiency standards and requirements. Many countries and authorities are, as a result, introducing legal requirements for benchmarking and usage disclosure to ensure that property owners correctly quantify and calculate property performance – and improve it where required.

Requirements vary but stricter rules are already implemented in some cities. In New York, energy audits, retro commissioning and benchmarking is a legal requirement on all commercial buildings over a stipulated square footage.

Valuable demonstration of corporate responsibility
Building energy performance is now increasingly measured alongside other efficiency measures in one corporate social responsibility metric. There is now an expectation that all businesses will have in place CSR policies, procedures and reporting. CSR is now considered as mainstream as investment, leasing and financial decisions are.

External pressures
Institutional investors alongside potential staff and existing stakeholders all increasingly expect a solid commitment to be made to CSR and sustainability. Indeed external pressure fast making this the ‘norm’ in business practices is resulting in the creation of assessment and consultation companies who specialise in assessing, recommending and implementing sustainability best practices and measures. Property owners having a favourable portfolio-wide sustainability assessment carried out is becoming an increasingly important metric to attract investors, who are receiving pressure from their capital stack to demonstrate commitments to green practices.

It is no longer just investors demanding greener spaces, but also tenants and estate agents. Greener, more eco-friendly buildings will often be worth paying a premium for, and so it is important that property owners stay on top of the latest developments in the sector to benefit from this.
Indeed the ROI on sustainability is not just savings on energy bills – and keeping at the forefront of green initiatives is the most certain way to benefit from payback all ways round.

The post The ROI of Sustainability appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

Continue reading "Scottish Councils to benefit from £4.4m funding into Energy Efficiency"

The post Scottish Councils to benefit from £4.4m funding into Energy Efficiency appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

Excerpt: The new Scottish Energy Efficiency Programme of funding is enabling not just new efficiency and sustainability measures throughout the country, but also ground-breaking projects not seen before North of the border!

The Scottish government has granted local councils £4.4million of funding in a new drive to promote energy efficiency. Fifteen local authorities will benefit from Scotland’s Energy Efficiency Programme (SEEP), that will deliver innovative solutions to reduce emissions and tackle fuel poverty for homes, businesses, public buildings and community projects across the country.

The new programme will coordinate to improve energy efficiency across commercial, public and industrials sectors and funding will be granted in 2018. The fresh funding will coincide with fresh powers over the regulated energy supply sector for the Scottish Parliament.

SEEP will be implemented in two phases. The first has already has successful pilot projects underway spanning eleven local authorities, with £9.1m being awarded. These pilot projects will complete in December 2017, and then fresh pilots for the second project phase will take place, completing in February 2019.

Phase 2 sees some exciting innovations and progress to take place. This includes, but is not limited to:

• Aberdeen working as a lead partner alongside Stirling, Highland, Perth & Kinross, Edinburgh and Dundee to develop Local Heat and Energy Efficiency Strategies
• Argyll & Bute to introduce a district heating system with energy efficiency measures included
• East Ayrshire to install renewable heat measures into a community hall and work with energy efficiency in off gas grid area, working alongside the property and land owner occupiers
• Edinburgh to install retrofit energy efficiency improvements to the Edinburgh Bus Station and Museum of Edinburgh, as well as the installation of large scale ground source heat pumps to provide renewable heat to Saughton Park (a first for Scotland)
• Falkirk to extend their district heating network to three tower blocks, and private wore network to seven tower blocks and a number of council properties
• Orkney to install energy efficiency measures into schools
• Shetland to develop a Local Heat and Energy Efficiency Strategy (LHEES)

Paul Wheelhouse, the Minister for Business, Innovation and Energy spoke of the upcoming projects with excitement, saying to the press: “The SEEP Pilot programme is testing new approaches to improving energy efficiency and new ways of working in the public sector. A number of these projects will have a material impact on people’s lives, ensuring they have warm homes, businesses and community centres, while others will help develop essential strategies to support the effective deployment of investment to meet our ambitions to expand renewable heat and address fuel poverty.”
Similarly, Stephanie Clark, Policy Manager at Scottish Renewables, said:

“Scotland’s Energy Efficiency Programme aims to both reduce the amount of heat which is lost from homes and businesses and to decarbonise the way that heat is supplied. Both those aims are important if we are to tackle climate change while helping the 31% of Scottish households in fuel poverty.”

The success of any such projects under the SEEP initiatives are likely to have knock-on impacts for not only future energy efficiency in Scotland, but elsewhere in the UK too, and could influence commercial epc all across the UK.

The post Scottish Councils to benefit from £4.4m funding into Energy Efficiency appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

The post Brexit to give continued uncertainty to Sustainability Professionals, JLL warns appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.

Excerpt: JLL UK is leading the way to call for governmental intervention and planning to give better certainty and stability to sustainability professionals in the wake of ongoing political and business uncertainty.

Investment management firm JLL UK has warned that the country’s prolonged period of political and business uncertainty in the wake of the Brexit vote will continue to affect sustainability professionals, and suggests they must be more flexible in their pursuit of long-term corporate social responsibility objectives and goals.

Talking to edie, JLL UK’s Head of Sustainability Sophie Walker said that she believed those working in sustainability would have more difficulty adjusting to the period of uncertainty compared to those working in other areas of business – because the nature of their goals are long-term and the attitude of other sectors currently is very focused on short-term aims. She said of the research JLL had conducted:

“Post-Brexit, I think we’re operating under assumptions of EU roadmaps on a variety of business issues, including sustainability. Things are up for debate and discussion over the next few years and everybody in every sector has to be more flexible than they’ve had to be in their entire career. You have to be brave, bold and ambitious when setting out your targets. At some point, you’ll have to take that step. But, you have to be prepared to pivot and be more nimble. It’s an interesting challenge for sustainability professionals, who always try to take the longest view possible but are now being asked to think across a three to six-month spectrum. It’s definitely a tension.”

Dissimilarly, Walker claims that the recession was, inadvertently and unexpectedly, a positive event for the sustainability sector, as it placed focus for the first time on the financial aspects of sustainability to drive long-term business value. Whilst she admits this does stifle companies spending on “green bling”, she believes the required re-focus on long term strategy made sustainability more integral and central to businesses rather than staying as a ‘nice to have’ add-on. JLL UK were just one such company to shift this focus, and several of their clients have moved in the same direction.

JLL only recently announced their own sustainability goals to meet by 2020. These include a 100% renewables targets and aspirations to send zero waste to landfill. However, since the Brexit negotiations have begun, Walker believes the focus could well change again.

“I fully anticipate that within the next six months I’ll have to pivot again and slightly change focus. Business hates uncertainty, it makes it really hard to make investment decisions that are effective, and you can waste time second-guessing what might happen,”

Walker said. “But, we are in business to serve our clients and provide them with real-estate solutions. Ultimately, that isn’t going to shift, Brexit or no Brexit, and we have to align our sustainability trajectories to support that ambition and purpose. Our clients aren’t going anywhere and they continue to need our support. It’s a helpful mindset to keep, to try not to worry about all the shifting parts.”

However, periods of uncertainty are not without risk, and Walker acknowledges this. For companies operating within the built environment, legislation and regulation manages the requirements for environmental protection and standards, and is being constantly updated worldwide to move with new market developments, gain strength and become stronger. Walker described the need for such regulation to stay in place to provide a “safety net” for such businesses.

Within the EU at present, buildings currently account for 50% of extracted materials, 50% of energy consumption and a third of waste generated. The European Commission has a Circular Economy Action Plan to focus on the lifetime of buildings and ensures that new regulation and legislation introduces design improvements to increase the lifetimes, energy efficiency, durability and recyclability of properties and their components.

This circular economy model will no longer apply to the UK once it has left membership of the EU, but the government has yet to adhere to the package and has not announced plans to introduce any new legislation – similar or otherwise. It is this lack of clarity of a long-term involvement within the plan or announcement of a new one that contributes greatly to the aforementioned uncertainty. Indeed, JLL UK is one of several companies who are currently backing Business in The Community’s (BITC’s) new circular offices campaign that aims to introduce circular economy principles to the private sector.

“I don’t think anyone knows about the timeline for circular economy,”

Walker added.

“It does have the potential to have a really significant impact on the UK, but only once resource input prices become very expensive or volatile. We do need to start to see some of the really simple legislation come in. Those simple things could create quite a lot of momentum, and it is definitely in the government’s gift to make happen.”

How this will impact on the sector moving forward remains to be seen, but one thing remains definite: more planning is needed to ensure the safeguarding of sustainability.

The post Brexit to give continued uncertainty to Sustainability Professionals, JLL warns appeared first on JOBS + NEWS: ARCHITECTURE BUILDING SUSTAINABILITY.