Turning Environmental Regulatory Challenges into Opportunities

The built environment is the largest emitter of the greenhouse gases (GHG) that cause climate change. It’s no surprise, then, that governments around the world have targeted commercial real estate (CRE) with regulations aimed at reducing those emissions. Unlike in most other countries, however, the U.S. government has left it up to individual states and municipalities to develop, implement, and enforce their own rules. Some of these laws even overlap; for example, a company headquartered in Manhattan that also operates in Los Angeles could be subject to both New York City’s local laws and California state laws. This has resulted in a confusing and constantly changing environmental regulatory landscape.

For businesses with substantial office space portfolios, the time, effort, and expense required to stay on top of these regulations is significant, and there’s no relief in sight. Passage of a federal statute that would standardize environmental laws is not likely in the near term. If anything, the regulatory landscape may become even more nebulous as ongoing litigation plays out and the new U.S. administration tries to make good on promises to cut red tape. The answer to simplifying compliance and navigating the uncertainty ahead lies in technology.

Here’s a closer look at these regulations and how organizations can use workplace management and smart building solutions to turn the challenges they represent into opportunities.

Two Types of Real Estate Environmental Regulations

Across the country, there are dozens of state and municipal laws compelling CRE stakeholders to reduce their carbon footprint. These laws generally fall into two categories: environmental reporting and building performance. The former involves monitoring, quantifying, and disclosing information about the GHG emissions a building generates through its construction, operation, and maintenance. The latter focuses on the structure rather than the organization, mandating that emissions associated with individual buildings be reduced to meet certain thresholds.

Complying with these regulations requires the collection of large volumes of accurate and timely data from multiple sources. The most effective and efficient way to gather information about the operation and maintenance of office real estate, and streamline the reporting and compliance process, is by leveraging the one-two punch of Internet of Things (IoT) devices and integrated workplace management systems (IWMS).

IWMS and IoT: The Dynamic Duo

An IWMS is a software platform that centralizes the operation, maintenance, and optimization of spaces, buildings, and portfolios for stakeholders. Over the past 20 years, IWMS have gone from superfluous to essential.

The lifeblood of an IWMS is data, which it gathers from sources both internal—like desk booking solutions and visitor management systems—and external, such as finance software and vendor statements. An IWMS combines all of these inputs to provide a holistic view of operations and reveal actionable insights. Perhaps the most valuable source of data that can be incorporated into this “single source of truth” comes from IoT devices.

Smart building platforms use IoT hardware to monitor building components, conditions, and operations. Smart meters, for example, measure water and gas flow. Vibration and moisture sensors can be deployed to give facility managers early warning of equipment performance problems. Occupancy sensors and people counters drive utilization insights. And environmental sensors monitor temperature, humidity, noise, light, and particulates to help identify indoor air quality (IAQ) issues.

A Game-Changer for Organizations Struggling with Compliance

Tracking and recording information on all of these factors delivers a big slice of the data pie that organizations need to satisfy environmental reporting requirements and measure progress toward building performance goals. Advanced platforms can even automate reporting and be customized to pull in new data streams or exclude information that’s no longer required. This gives companies the ability to adapt more easily to changing regulatory requirements.

That adaptability is crucial, as the guidelines and parameters of environmental regulations in the U.S. are far from set in stone. Some changes are intentional and planned far in advance; for example, in New York, buildings subject to LL97 will face stricter emissions limits beginning in 2030. Other amendments may come unexpectedly, as a result of new rulemaking packages, litigation, or intervention from a higher governmental authority. IWMS and IoT platforms can help organizations not only respond to these changes but, in the case of limits and targets that become harder to meet, identify new opportunities for reducing emissions.

Benefits Beyond Compliance

In addition to supporting compliance efforts—in whatever form they take—the real-time insights these solutions provide can help organizations pinpoint areas for improvement in costs, utilization, efficiency, and sustainability. For instance, analytics can be combined with energy usage data to help identify what’s driving usage spikes and energy waste. Energy usage information can also be paired with data from occupancy sensors to reveal when energy is being consumed to cool or light empty rooms. Meanwhile, readings from environmental sensors can highlight hot, cold, noisy, or humid spots that might indicate a fault in mechanical, electrical, or plumbing systems.

All of these added capabilities, whether they are used to help avoid costly fines, prevent expensive and disruptive system failures, improve operational efficiency, or optimize portfolios, boil down to one thing: saving money. Those efforts can be amplified by expanding IWMS and IoT deployments so that use cases that were successful in one building can be easily replicated to additional buildings, and even over an entire portfolio.

Conclusion

FMs and other CRE stakeholders can be left feeling overwhelmed by the intricacies and ever-changing nature of environmental regulations in the U.S. Due to ongoing litigation and big changes in governance coming next year, that picture is likely to get murkier before it gets clearer. But real estate teams can use smart building solutions, like IWMS and IoT devices, to stay ahead of these changes, adapt quickly to evolving conditions, and streamline compliance.

Fortunately, these same solutions can also help companies reduce costs and waste, optimize space and portfolios, and streamline operations, among many other benefits.