How can building owners and managers use occupancy data to optimize office space use and reduce energy consumption and energy-related costs?
As a follow up article to “Leaders’ opinions: going net-zero brings a risk to property investments” it is surely worth going into definitions of key words that are so much used in today’s financial world: Net-Zero, Stranded Assets and their connection.
Net-Zero
- Definition: Achieving net-zero means balancing the amount of greenhouse gases emitted with an equivalent amount removed from the atmosphere, effectively reducing emissions to zero over time.
- Importance: This goal is crucial for mitigating climate change, as it helps limit global temperature rise and reduce the impacts of extreme weather events.
- Strategies: Countries and businesses aim to reach net-zero through various strategies, including transitioning to renewable energy, enhancing energy efficiency, and investing in carbon capture technologies.
Stranded Assets
- Definition: Stranded assets are investments or properties that have lost their value or are no longer viable due to market changes, regulatory shifts, or technological advancements, particularly related to climate change.
- Examples: Fossil fuel reserves, older buildings that can’t meet new energy efficiency standards, and infrastructure reliant on outdated technologies can all become stranded. At the opposite, buildings equipped with modern energy systems and people counting infrastructure are being positioned as modern and high value properties.
- Implications: Stranded assets pose financial risks for investors and can impact overall economic stability. As the world moves towards net-zero, assets that cannot adapt may lose significant value. That is why is so important to keep buildings up to date with regulations, starting from understanding the use of spaces and how energy is utilized.
Connection Between Net-Zero and Stranded Assets
- Transition Risks: The move to a low-carbon economy can create risks for traditional industries and properties that do not evolve to meet new regulations or market demands. The regulations have started appearing in several countries, asking to issue yearly reports on energy use. As always, it starts looking at energy used per surface, but along the next years the most advanced countries will slowly move to energy used per person, with the clear aim to cut energy wasted on empty or semi-utilized properties.
- Investment Strategies: Investors are increasingly considering climate-related risks in their portfolios, focusing on assets that align with sustainability goals to avoid potential losses from stranded assets. Real estate leaders started creating a new category of modern commercial properties, all equipped with modern technologies, not only in the heat and cooling generation, but also in the monitoring of how spaces are used, thanks to the implementation of people counting infrastructure.
Conclusion
The aim for Net-Zero brings a new financial stress on renovating assets, especially with upgrades on energy efficiency but also on HVAC technology and data sets that can drive it and optimize consumption (ie people counting infrastructure).
The aim for Net-Zero brings a new financial stress on renovating assets, especially with upgrades on energy efficiency but also on HVAC technology and data sets that can drive it and optimize consumption (ie people counting infrastructure). All assets not worth renovating will be marked soon as “stranded”, since they will end up failing complying with incoming laws. What will happen to these buildings?
