Sustainability Starts with Energy Management

In recent years, many companies have worked to cut costs and reduce their environmental footprints. Now, with research showing that the physical risk from climate change will continue to accelerate unless the world achieves net-zero emissions by 2050, no business can afford to hesitate on the path toward this mission-critical ESG goal. Every journey along that path must begin by addressing Scope 1 and 2 emissions, both of which a company can take steps to eliminate through its own direct actions related to energy management.

Scope 1 emissions originate from facilities or equipment that your company owns or controls. Scope 2 emissions consist of indirect emissions from the generation of purchased energy. Given the urgency of the Paris Agreement’s international mandate to limit the mean rise in global temperature to less than 2 °C above pre-industrial levels, Scope 1 and Scope 2 emissions represent quick-win opportunities for decarbonization through best-in-class energy management. At the same time, Scope 3 emissions—emissions resulting from the full supply chain—must undergo mitigation and eventual elimination via the implementation of a robust, holistic sustainability policy integrated across a company’s entire footprint.

To put it simply, a better future must start with energy management.

Everything Begins with Energy

The economy today remains carbon-intensive and must transition rapidly—a transition that takes energy use and generation as its starting point. Commercial real estate leaders understand the risk, given that the built environment accounted for 40% of global energy use and 33% of global energy-related CO2 emissions in 2019. CBRE’s partners understand it as well, with more than a third of our top 75 enterprise occupier clients having announced science-based plans to achieve those targets.

The right approach to energy can differentiate a company from its peers—an approach that must encompass cutting-edge asset management, building systems monitoring and energy procurement. In addition to supporting the energy and sustainability goals of our clients, CBRE  values this holistic approach having announced its own science-based target in 2020, committing to a 79% reduction in occupier emissions by 2035, achieving 100% renewable energy by 2025 and transitioning its vehicle fleet to electric vehicles.

Lessons from the Pandemic: Investment in Energy-Saving Infrastructure Pays Off

Unfortunately, energy reduction efforts of all kinds encountered a major obstacle in 2020, as the COVID-19 pandemic necessitated urgent and not always eco-friendly changes to energy management procedures. Companies had to develop a better understanding of air quality’s role as a critical component of employee well-being, productivity and safety. This meant that energy efficiency and savings goals needed to account both for the fresh-air requirements of employees as well as the increased costs imposed by those needs.

Fortunately, advances in energy technology had already enabled companies to curtail energy use prior to the pandemic, thereby cushioning the blow of cost increases resulting from the intake of more fresh air.

Joseph Gomez, CBRE | ESI Smart Buildings Business Leader for the EMEA region, assessed the impact of those cost-saving technological innovations.

“The past few years have seen the emergence of several strong drivers for cost reduction: decarbonization of utilities procured and used, decentralization of local energy needs where off-grid solutions are viable, and improved technology supporting automated fault detection and diagnostics to resolve building services anomalies efficiently,” Gomez explains, emphasizing that these investments can achieve savings capable of offsetting the impact of other unexpected business disruptions.

The Road to Net Zero

Together, these innovations point the way toward net-zero carbon emissions. But without a clear plan, piecemeal investments even in the latest innovations may fail to yield optimal results.

“Everything here depends on your methodology, which is why we’ve spent so much time refining ours,” says Patrick Johanning, Senior Managing Director of CBRE’s Asset Performance and Energy Excellence Services (APEX) group. “We follow a phased approach to reaching net zero. Although solutions vary by size and scope of the client, this typically has our energy team addressing utility bill payment and procurement in phase one, building management and automation systems as well as central utility plant upgrades in phase two, on-site renewable energy installations and smart building deployments in phase three, and finally continuous improvement and remote command-and-control of all facilities after we’ve achieved net zero during phase four.”

CBRE directly manages $1.4 billion in client utility spend for 55 enterprise accounts via Energy and Sustainability programs that span 8,000-plus locations.¹ This process results in significant emissions reduction and energy savings.

“Since 2017, we’ve tracked more than $398 million in energy cost savings for 60-plus enterprise accounts in North America² specifically and measured 1.5 billion pounds (680k metric tons) of CO2 emission reductions across an average of 660MSF³,” says John Hagen, CBRE’s Global Senior Managing Director for Asset Performance and Energy Excellence Services. “In 2020 alone, we tracked more than $125 million in energy cost savings⁴ just for enterprise accounts in North America and measured 368 million pounds (167k metric tons) of CO2 emission reductions across 531 million square feet⁵.”