On how to make an energy efficiency market rock, with the BuildingIQ float potentially worth $100 million; Deb Noller of Switch Automation and why she says her industry is a gold mine; and why honesty hurts but does good.
News from BuildingIQ rocked the market this week. This Aussie generated company that does energy efficiency with software originally developed by the CSIRO is poised to list on the Australian Stock Exchange with expectations that the venture capitalists who underpinned it could turn their investment into $100 million.
Deb Noller of Switch Automation calls this industry and the related areas her company is involved in the US a massive gold mine that most CFOs of huge property portfolios have no idea they’re sitting on.
The trouble, she says, is that they can’t actually see the value and potential because so much of the information is tied up in silos with software and other data management that doesn’t talk to each other.
That’s where Noller and her team come in. Their “enterprise” software is like a geological surveys that go off into the wild to find where the good stuff is buried.
Under the noise and obfuscation are huge savings, from energy use, risk management, corporate social responsibility practices, and all manner of efficiencies. In other words a gold mine. The rest of the world and just about every economic enterprise on the planet has been rationalised, outsourced and otherwise trimmed to within an inch of its life, she says. But not the property industry.
The good thing is that many of the savings that property can yield almost always produce some kind of environmental gains, or broader sustainability gains.
So what does Noller think of the markets in Australia and the US? And is it feasible that an energy efficiency company in Australia could be worth $100 million?
On BuildingIQ, Noller won’t comment.
On the two markets, there are vast differences, she says.
Does she agree as the comment from BuildingIQ indicated earlier this year that the outside of California and other green hot spots, the US market isn’t so interested in energy savings?
Not at all. “We’re doing awesome in the US,” she says. “We’ve started hiring.”
That will be up from five full time US staff, with the rest of the 21-strong staff based in Australia.
What you need to do to work both markets, she says, is to position your offer in vastly different ways. In the US in particular, there are nuanced differences between markets and you need to develop strategies that respond to that.
But both markets are “unfolding slowly”. Her company has also been encouraged to list on the ASX, but Noller is holding firm. She thinks the ASX is running too hot for her liking.
“The ASX is no place to be if you need to ‘react in your own time’ to a slowly unfolding market.”
Instead she’s accepted her first outside investment of $1.25 million from the Melbourne based Scale group of angel investors who target their support to women entrepreneurs.
The big differences between the two markets are that Australia, because of mandatory reporting is strongly focused on sustainability reporting first and also corporate social responsibility second.
“In the US it’s a more cost driven model and it’s not operating in a deregulated energy market.”
The energy side of savings is just barely two per cent, Noller says, but outside of energy there is so much potential for cost reduction in operational areas of business.
Energy, she says, is these days a much smaller part of her business.
“I see this as the tip of the iceberg and the companies we’re talking to are market leaders.”
What about the Asian potential?
For another view on energy efficiency and the global market, see our story with EP&T Global’s Keith Gunaratne who’s been working on expanding his Australian company in the other global direction, to London and now Asia.
Gunaratne also emphasises the importance of local difference, especially cultural, but he also points to the need to understand political influences and even the revolution in social media when it comes to stimulating market transformation.
Some background we didn’t get in the story is worth mentioning.In London he’s come to appreciate the strength of the UK’s recovery from the GFC and says much of it was based on the strength of the local media in particular the BBC (who his company consults to) because it’s important for business to get the messaging out correctly and strongly he says. (Our politicians should note this as they slash the budgets of our national broadcaster). Gunaratne says London today is the magnet that draws wealth from other fragile economies from Greece to Russia.
London Mayor Boris Johnson, he says, doesn’t say, “London is full”, he welcomes new residents with open arms, saying that “eight million people is nothing; we can accommodate many more and we will build the infrastructure to make sure London is the most attractive city in the world”.
There’s the market knowledge but also human nature and what motivates change – a carrot and stick approach, he says, but more carrot than stick. There’s also politics, social media, and in the area he’s trying to break into, in Asia, a good deal of cultural history as well.
Why it’s important to share the bad with the good
Earlier this week we published the first part in a series detailing sustainability guru Michael Mobbs’ disconnection from the electricity grid at his Chippendale, Sydney home, moving instead to a solar system with battery storage.
Ever the trailblazer, his move could be the beginning of what many speculate will in the not-too-distant future become a mass exodus from the grid – a death spiral – as consumers become fed up with dirty carbon-intensive energy, unfair network charges levied for having solar panels and scrooge-like prices paid for solar energy fed back into the grid.
Mobbs’ disconnection didn’t go to plan, however. At all.
Sitting in the dark, unable to use the shower or toilet, and disconnected from internet, he began to pen – perhaps literally given the lack of power – a piece for The Fifth Estate detailing the system failure and its unflattering consequences.
In a similar vein, we published news of another first this week – Australia’s first JUST certification, awarded to sustainable property consultancy Viridis.
The certification, provided by the International Living Future Institute, looks at 22 indicators across equity, diversity, workplace health and safety, supply chain, local control and content, investments and transparency.
While Viridis scored extremely well on a lot of factors, the public nature of the rating meant that when Viridis got 0 points for staff happiness, there was nowhere to hide.
Another first soon to be reported on in detail in The Fifth Estate is Grocon’s development of a biomass gasification system for its Legion House building in Sydney, designed to turn recycled paper/plantation woodchip briquettes into gas to generate electricity, with the end goal being a carbon neutral building.
The process was marred by regulatory and technological hurdles, and the system had to be redesigned, causing lengthy delays.
What all these firsts have in common is that they’ve attempted to push the boundaries of business as usual, whether through technology or governance.
Another common ground is that things haven’t exactly gone to plan.
But the most impressive thing these examples have in common is that they companies involved have been candid about the challenges faced.
Why, you may ask, risk the embarrassment and other consequences of such an admission?
For Mobbs it’s about helping him “grope towards understanding, to accept my choices”.
“Generally, the populace, the culture of a people, depends, surely, on its capacity, individually and collectively, to be honest with itself about how it uses the resources upon which it depends for its survival,” he writes.
For Viridis, it’s brought up issues the company has never thought about before, and while some difficult conversations needed to be had, the company’s honesty is seeing increased levels of staff engagement, and has also benefitted from a broader business perspective, with a number of companies having contacted the firm to talk about certification, as well as the positive things the rating had to say.
And for Grocon, lessons learned may help to equip the wider property industry with knowledge that can inform better sustainability initiatives and progress the business case.
Indeed, with firsts comes valuable lessons that help us to grow, and collectively reach towards better standards, and a better world – but only if we’re willing to share them.
And in the sustainability industry it’s of particular importance we share our experiences – good or bad – because we don’t have that much time to get things right.