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There is a dramatic shift occurring in the way companies think about energy. The conversation is no longer just about reducing energy use and greenhouse gas emissions by some percentage. Leading companies are now aspiring for something greater—net-zero energy across company operations. This means generating renewable energy (on and/or off site) equal to the amount of energy used for the operation of buildings across a company’s portfolio or, in other words, a 100 percent renewable-energy-powered buildings portfolio. These aspirations have big implications for corporate real estate.
CoreNet Global, the world’s leading association for corporate real estate and workplace professionals, issued an advocacy statement in 2013 for net-zero energy corporate real estate. Inspired by this advocacy statement, RMI and CoreNet Global have engaged in a broad collaboration to scale investment in next-generation energy management that approaches net-zero energy. As part of the collaboration, we jointly produced two Next-Generation Energy Management reports this year.
The first report—A Roadmap to the Next Level of Performance (released in April)—presents an initial assessment of key drivers that support and demand the successful execution of next-generation energy management and performance. The second report—Solutions for the Next Level of Performance in Corporate Real Estate (released in October)—follows on the first report with clear evidence about the benefits
of taking action now, and offers eleven strategic solutions to enable corporate real estate professionals to set and achieve the highest goals practical and profitable for building energy performance.
The emergence of net-zero energy
Take a moment to put yourself in the shoes of a corporate real estate professional. Then consider several questions that might keep you up at night: What are my responsibilities? How will my work be evaluated? What can help me do my job better?
What rises to the top of the list in response to any of these questions is unlikely to be net-zero energy. Historically, corporate real estate teams have considered a basic level of energy management as important to controlling costs. The world has, however, changed significantly over recent years in ways that provide greater motivation and support for pursuing much more ambitious energy performance goals in corporate real estate.
Market drivers incent and support net-zero energy
Put yourself back in the shoes of a corporate real estate professional. Even though peer organizations like CoreNet Global advocate for net-zero energy, you may still be reluctant to take action today. You might also react initially with questions about the costs of reaching net zero and how this relates to your job responsibilities.
However, these concerns become alleviated when you consider the characteristics of your ideal corporate real estate portfolio and what can help you achieve it. This ideal portfolio is likely one that ensures low, predictable operating costs indefinitely; meets the current and future business needs of your company and maintains flexibility; not only attracts and retains employees but also enables employee engagement, productivity, and health; demonstrates your company’s values and brand to stakeholders; makes use of the best available technological and financial innovations to maximize profits; offers resilience in light of current and forthcoming regulations; and meets your company’s commitments to stakeholders.
It turns out that a net-zero energy company strategy can help achieve this ideal corporate real estate portfolio. Although net-zero energy may have been unrealistic or inadequately understood previously, some emerging drivers are now making net-zero energy in corporate real estate a realistic option:
- Innovation: Better and cheaper technologies, new financial mechanisms, increased adoption of workplace transformation programs, growing recognition of the value of healthy and productive buildings, and an increasing number of net-zero communities
- New risks: Customer and shareholder demands, national and local regulations, the need to attract and retain Millennial employees, threats to electric power reliability, and the desire to keep up with other companies
- Changes in the electricity grid: greater customer choice and the improving economics of customer-sited distributed energy resources
Strategic solutions for a net-zero energy real estate portfolio
a company’s pre-existing energy management program, the eleven strategic solutions offered in Solutions For The Next Level of Performance In Corporate Real Estate enable companies to advance towards net-zero energy across their corporate real estate portfolios. The solutions, which were developed through analysis of third-party research and guided by insights from interviews with fourteen key industry experts, fall into three steps for action: organize—lay the appropriate foundation for pursuing the next step in building energy performance, capitalize—seek out opportunities for profitable energy management investment, and optimize—wring the most value out of the other solutions. The eleven solutions include:
1. Garner C-Suite support for next-generation energy management
2. Emphasize efficiency before generation or offsets
3. Establish a multidisciplinary team with clear accountability
1. Invest in smart building management
2. Emphasize strategies for health and productivity
3. Fully utilize the suite of available external funding options
4. Support workplace mobility and density efforts
5. Work with landlords to accomplish energy goals
1. Enable a more holistic and value-based approach
2. Allocate investments across the portfolio
3. Support collaboration efforts
Real-world examples demonstrate the practical and profitable nature of the strategic solutions outlined in the report. Deutsche Bank has maintained carbon neutrality in operations since 2013 by pursuing energy efficiency investments and on-site generation. The company then offsets remaining carbon emissions by purchasing electricity from certified renewable energy sources. Kohl’s implements energy efficiency with a multi-disciplinary team and now secures consistent funding for energy efficiency measures after adding a person from the finance department onto the energy team.
Tesco uses smart building technologies to reduce energy use and costs. The company learned from a pilot in one of its stores that advanced data analysis tools for refrigeration energy use could save Tesco about $25 million annually in energy costs if scaled across its 3,000 stores in the UK and Ireland. These technologies also supply its 1,000-person maintenance team with information that helps maintenance personnel respond more efficiently to issues that arise.
AT&T, in addition, integrates energy efficiency’s multiple benefits into decision making to drive investment in what the company calls the intelligent integration of multiple benefits into a single expenditure. When AT&T thinks about the business value of LED lighting and building controls, for instance, it considers the multiple benefits the investment provides and the company stakeholders that would receive them. Because multiple departments have something to gain from these benefits, there is broad-based support for the measures. This multiple benefits approach has encouraged stakeholders across different departments to contribute to a pool of funding to ensure further investment in LEDs and controls and saved AT&T $191 million annually in energy costs alone during 2010–2013.
A call to action
The eleven strategic solutions proposed in our latest report are each being used individually today by companies. Corporate real estate professionals should pursue a net-zero energy portfolio comprehensively—amassing the best of what other companies are doing into a single overarching strategy—that integrates the strategic solutions to maximize the value they create for their respective company. In so doing, corporate real estate professionals will see their portfolios embody the characteristics of the ideal.
There has never been a better time to demonstrate leadership in corporate real estate to address company needs and broader societal needs like climate change. As such, RMI and CoreNet Global seek to collaborate with companies in ongoing interactions, engagements, and events to scale the adoption of net-zero energy real estate portfolios. Should this leadership opportunity be of interest, please contact the authors at email@example.com and firstname.lastname@example.org.
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