Trevor Miles, UK area manager & Imre Gustav-Vellamaa, co-founder, R8 Technologies look at the progress of AI in the smart buildings sector.

Over the past few years, the management of Estonia's largest shopping centres and business quarters, including the well- known technology hub, Ülemiste City, have progressively been supported by artificial Intelligence (AI). The solution nicknamed ‘Jenny’ was developed by a local enterprise, R8 Technologies. Jenny saves up to 40% of total building energy and helps to achieve ESG (Environmental, Social and Governance) targets, by using resources sustainably and lowering CO2 emissions.

Estonia is known for its high levels of digital technology adoption. This also applies in corporate life. The ratio of ‘unicorns’ (companies with a market value > $1 Bn) compared to the number of people, is the highest in Europe. So far, 10 Estonian companies have become unicorns (including Skype, TransferWise, Bolt and Pipedrive), which is a significant achievement for a population of only 1.4 million. A rising contender for unicorn status is R8 Technologies, a company founded by AI and HVAC (Heating, Ventilation and Air Conditioning) scientists at Tallinn University of Technology and entrepreneurs. Their AI-based program R8 Jenny solves the main concerns of commercial buildings: saves resources and helps achieve ESG goals.

Case study

The Viru Centre is one of the most sustainable shopping centers in the Baltics. It has been operating in Tallinn for over 20 years and has been named the flagship of local retail. Since 2019, the centre has been the only one in the Baltics to be awarded the LEED Platinum level of sustainability.

“Energy saving is an area where good profitability is clearly visible today. However, due to the environmental agenda, all projects aimed at energy saving have received additional motivation," says Gertti Kogermann, CEO of the Viru Center. "For a long we have been looking for ways to make all the systems in the center more efficient, and some years ago we implemented one of the best solutions in the world." Kogermann refers to their cooperation with R8 Technologies.

"Today, R8 Jenny controls the air quality, ventilation, heating, cooling and energy consumption of the center. The result is better indoor well-being and really outstanding energy savings."

According to the CEO of the Viru Center, the automation, harmonisation and integration of systems with AI helped to achieve the next level of efficiency. What is better, over time it constantly improves the results and really gets to know the building better. The result, together with other ongoing investments, has been to almost halve the centre’s utility bills.

The technologist’s view

Saving energy automatically means a reflection in the company's utility bills, but nowadays resource efficiency also has an even more important effect, i.e., helping achieve climate goals. "Each unit of energy consumed ultimately means CO2 emissions. At R8 Technologies, we think that the greenest energy, is the energy saved! Thus, we show our positive impact on the climate in saved tons of CO2, which is currently more than 30,000 tons," explains Dr. Ahmet Köse, R8 Technologies CIO and head of AI.

According to Köse, sequestration of harmful carbon is possible, primarily thanks to customers who are willing to support the efficient operation of their HVAC systems. "We work with clients all over the Europe from Finland to the UK. We see that absolutely every building has the potential for higher efficiency. There is a simple reason for that - no person can work with full attention, 24/7, whilst understanding all the correlations and trends. AI does this, and as a result the energy class of every building that joins us immediately increases by one level when R8 Jenny is implemented. If the building's modern control systems work well, the energy class can even increase by two levels," adds Köse.

Increasing importance of ESG targets and reporting

Approximately 40% of energy related CO2 emissions are associated with real estate. In the EU, the target is to reach Net Zero by 2050. This means that real estate owners and operators are under pressure from regulators, society and investors to become more sustainable. But it is not just about emissions and energy – sustainability is also about how we care for people whilst running our businesses, hence ESG factors are rising-up the priority list.

From the beginning of financial year 2025, the ESG targets and KPI’s of large real estate owners in the EU will have to be disclosed as part of their annual business reports. This reporting requirement, under the Corporate Sustainability Reporting Directive (CSRD), is applicable to businesses that meet any two of three criteria, which are: >EUR 20M in total assets, >EUR 40M in turnover, >250 employees.

“KPMG sees sustainability as well as being transparent about your commitments under ESG reporting as a strategic opportunity – it fosters innovation and can bring real benefits to companies, people and planet. It is also a tool to communicate with your stakeholders and show that you are serious about their concerns. This is why we are excited to co-operate with R8 Technologies. Their AI-based solution solves many problems that building operators currently face – the practical problem of achieving established sustainability targets around energy performance, greenhouse gas emissions, air quality and people well-being as well as credible data availability, monitoring and reporting issues. With a push of a button R8 Jenny can generate a performance report that is ready to be used also for corporate sustainability reporting needs such as under CSRD requirement,” says Marko Rebane, Sustainability & ESG Manager at KPMG Baltics.