There’s soaring growth in demand for building performance increase in recent times, but the best performance of all is to repurpose an existing building, say one consultancy with a new framework to help owners navigate the challenges
Historically, financial returns have been the key performance indicator that investors used to benchmark asset health. But environmental sustainability and human health and well-being are now taking first place for owners, tenants, and regulators.
Engineering consultancy Cundall is seeing soaring growth in demand for building performance services as more and more owners shoot for net zero.
According to Mathuran Marianayagam, the company’s principal consultant sustainability: “There has been around 30 to 40 per cent increase in recent years, well above normal organic growth of 15 per cent per years.
But to be more sustainable, he says, “try to repurpose existing buildings. That is the most sustainable form of the built environment.”
The company last week released a new guide for asset owners and portfolio managers to assist. owners and managers improve building performance, plan upgrades and target net zero.
Mr Marianayagam said that many people do not have an understanding of what sustainability benchmarks and strategies are needed in order to avoid a building from becoming a stranded asset in the near future.
He said that the guide brings together the sustainability frameworks needed in a way that has never been done before, helping owners and stakeholders of a building realise that sustainability is possible.
The guide recommends five steps to achieving “building health” in any building:
- Measure and benchmark the asset using existing sustainability ratings tools. Measure: energy and water performance, carbon and greenhouse gas emissions, waste, indoor air quality, occupant comfort, health and well-being, productivity, commuting options, climate change resilience and pandemic responsiveness
- Have a sustainability strategy. Building owner or investment manager must specify the environmental, social and governance (ESG) goals and targets for buildings, and the climate risk, using existing league table metrics, including: Global Real Estate Sustainability Benchmark (GRESB), Carbon Disclosure Project (CDP), Global Reporting Initiative (GRI), Taskforce on Climate-Related Financial Disclosures (TCFD), Science Based Target initiative (SBTi), and Social Value (SRIO)
- Define a clear roadmap to maximise building performance and achieve ESG goals. The roadmap must include costings, program timelines and identified stakeholders that will help those ESG targets be achieved
- Conduct exposure assessments to understand climate risks to life, material, operations and finances. “Climate risk” is projected through various future climate scenarios, based on pathways developed by the IPCC and other governmental research organisations
- Continually updating ESG strategies and sustainability roadmaps. Governments and regulators are quick to put out new regulatory requirements and higher standards. Cundall stresses the importance of conducting health checks often.“I don’t think any other organisation has made a roadmap like this for existing buildings”
“Working with industry and asset owners or asset managers, expectations of building performance varies,” Mr Marianayagam said. “This is because they come from a financial standpoint. In general, people have an understanding of building performance – but it’s not so clear what they have to look at exactly, their understanding is vague.
“The simple five step plan is a helpful tool to bring all of these measurements and strategies together, and streamline it to help effectively achieve performance targets.
“Building performance services have been here for a long time. But now we are not only working on building services (like mechanics and electrics), but also the building after it is built – as a whole living creature. And then you see how the sustainability and social aspects come into play, and how this interacts with financials, and tenant health and wellbeing.
“If you don’t spend money now, your asset will become a stranded asset, an unwanted asset,” Mr Marianayagam warns.
“For example, if the owner has a multi-million dollar asset, they’re looking for the building to gain and not drop in value. If the building is not prepared for climate risk, let’s say in 10 years time the temperature has gone up by 1 degree, can the airconditioning system cope with this sort of scenario? If you don’t have a plan for that, in 10 years time it won’t be useful. The value of the asset will fall.”
A recent Global Alliance for Buildings and Construction 2020 Global Status Report stated: “Financiers in even the toughest markets now recognise that green buildings have higher value than standard structures as they have lower fiscal, regulatory, and reputational risks.”
Owners are now looking to measure up to sustainability targets, and Mr Marianayagam said that property managers are now coping with delivering those targets.