Smart Building Tech: The Key to ESG Compliance and Sustainable Operations
The growing need for suitable Environmental, Social, and Governance (ESG) frameworks is reshaping how building owners and operators view sustainability and compliance. While benefits like improved tenant attraction, enhanced reputation, and long-term cost savings drive interest, regulatory pressures are emerging as the leading motivator. Additionally, new regulations are setting the stage for stricter standards across many parts of the world. By leveraging smart building technologies, organizations can not only meet these regulations but also optimize energy efficiency, reduce emissions, and enhance reporting accuracy.
What Is the True Reason for Increased Interest In ESG?
Numerous reasons are often referenced regarding the growing interest in ESG frameworks by building owners and operators. This often includes attracting higher quality tenants, improved community impact, brand reputation, and long-term cost savings. However, when you dig deeper as to why there is a significant uptick in ESG interest, growing regulatory pressures is far and away the biggest driver.
New regulations like the EU’s Corporate Sustainability Reporting Directive (CSRD) and California's climate disclosure laws, both taking effect in 2023 and are setting a precedent for further federal, state/province, and local regulations across other parts of the world. For example, The U.S. Securities and Exchange Commission (SEC) has been working on regulations requiring public companies to disclose their greenhouse gas emissions so that investors can understand the business’s climate-related risks that could impact their financial condition. Failing to accurately comply with these disclosures could result in fines, lawsuits, and even delisting or halting the trade of the stock from major exchanges.
While building emissions are only a part of the overall greenhouse gas emission story for most public businesses, they do factor in as buildings with large energy footprints contribute significantly to ongoing operations and maintenance, heating, cooling, and lighting.
Innovative Efficiency Meets Rigorous Reporting
A two-pronged approach is needed when approaching ESG from a regulatory standpoint. The first is to implement innovations that reduce their carbon footprint, lower greenhouse gas emissions, and curtail waste production, among other goals. The second is to deliver the necessary visibility and reporting capabilities to prove regulatory goals are being met. In both cases, choosing the right technologies will play a major role in achieving these goals.
To reduce energy consumption, waste, and greenhouse gas emissions, building management systems (BMS) are often considered the heart and soul of ESG initiatives. These systems manage and optimize building operations like heating, ventilation, and air conditioning (HVAC), lighting, and energy usage. To further optimizations and ease the management burden, these systems are now incorporating modern technologies like cloud-based management, artificial intelligence, and machine learning (AI/ML), and IoT devices. Combined, these technologies allow for improved visibility, centralized data control, and autonomous maintenance intelligence. They also deliver predictive maintenance, preventing building system inefficiencies from further waste while also elongating the lifespan of expensive building equipment.
Equally important is the deployment and use of powerful ESG reporting tools, which provide insights into energy usage trends and support governance regulation requirements through transparent reporting. Again, advancements in AI and the ease of reporting tool integrations using application programming interfaces (APIs). This helps to ensure that building owners and operators meet current regulatory reporting requirements more efficiently, with improved accuracy, and are better prepared for future regulatory landscapes.
Leverage Smart Tech to Achieve ESG Success
Embracing smart building technology is essential for meeting ESG regulatory requirements while optimizing efficiency and sustainability. By integrating advanced systems and reporting tools, building owners can lower their environmental impact, stay in compliance, and remain ahead of the curve in an evolving regulatory landscape.
