Aidan Donnelly, SmartWorkPlus, CEO asks why retrofit?
Retrofitting describes the implementation of modern technologies into existing buildings to create a more sustainable property. This approach is ideal for improving energy efficiency without overwhelming a corporation’s budget, the environment or the shutdown of daily operations while fit out is being completed.
With the built environment contributing on a large-scale to the climate crisis, producing almost 40% of greenhouse gas emissions worldwide; building managers need to produce solutions to make their buildings more sustainable and as smart as a new build. Though demolition and rebuilding may seem the obvious answer, construction produces around 11% of global emissions. These statistics need to change to reach net zero, but without the option to rebuild, the industry must turn to retrofitting.
The cost of demolition
The prediction that 70% of existing commercial real estate will still be in use in 2050 highlights the importance of retrofitting to meet net-zero targets. The embodied carbon associated with constructing a new building is equivalent to around 20 years of the same building’s operational emissions. The ‘London Plan’, which sets out a framework for the capital, highlights widespread recognition that demolition is not the solution however this strategy could be adopted to any town or city. Acceptance that construction is not a viable option in pursuing net zero, retrofitting is therefore a necessity for real estate to reach its climate targets.
The benefits of retrofitting
The moral argument for reducing carbon emissions is proving insufficient in convincing many businesses that retrofitting is worthwhile. Luckily, there are many financial and corporate benefits and motivations for retrofitting.
Corporations are increasingly under pressure to improve their energy efficiency and meet ESG targets. The Government’s requirement for corporate properties is to reach an EPC (Energy Performance Certificate) rating of ‘B’ by 2030. Earlier this year, data released by the Department for Levelling Up, Housing and Communities showed that over 60% of non-domestic properties in England & Wales had an EPC rating of C or below. To avoid financial penalties for non-compliance, commercial landlords must act to get their buildings up to scratch.
In addition to regulatory requirements, there are financial benefits to curating a corporate culture of sustainability. Gen Z and millennials entering the job market have spent their adolescence hearing about the climate crisis and worrying about the effect on their futures. Therefore, it is no surprise that a growing number of employees (67%) are more willing to apply for companies they consider to be ‘environmentally sustainable’. The Deloitte Global 2023 Gen Z and Millennial Survey
It is not just prospective talent that is attracted to ESG-conscious organisations, so are investors. 93% of institutional investors worldwide actively think about ESG and sustainability when investing in new assets. By enhancing a building’s sustainability through retrofitting, businesses put themselves in a far better position to attract new capital.
Common obstacles to energy efficiency
So what’s stopping owners and operators from embracing retrofitting? Several factors, ranging from budget constraints and fear of adapting to unwillingness from key decision makers at the board level.
Addressing the climate crisis is a global priority, leading to a boom in technology that aims to reduce carbon output from buildings. With so many solutions on the market, companies are nervous about spending their dedicated technology budget on solutions that fail to bring long-term benefits. In the past year, the cost of living has hit UK businesses hard, with reduced consumer demand leading to reduced revenue, while other costs, like rent and operations, have ‘accelerated’.
With less than half of UK tech leaders believing there will be IT budget growth for their corporation next year, their limited resources should be spent on technology
that brings value. By investing in solutions that are cost-effective and easy to install - with funds earned back through money-saving energy-efficient operations - companies can retrofit without burning through their budgets.
Implementing innovative solutions can speed up processes and optimise the use of resources across the entire business. However, as is human nature, everyone has varying preferences in their working environment and may struggle to adapt to the change. The answer is to adopt technology that is easy to implement and user-friendly, with set-up support for ease of transition and can be scaled. At SmartWorkPlus, years of expertise in facilities management have been fundamental to creating a solution that is both easy to use and provides long-term value with to-the-minute insights. Whether you are seeking a proof of concept or a full fit-out, there is a bespoke solution for everyone’s individual needs.
According to a BCG-INSEAD Survey, in companies with a net-zero commitment, only 55% of directors reported that the corporation had published a plan to reach the target. In businesses like these, technology is vital to setting data-based longer-term strategies. By employing solutions that offer clear data-led insights, it’s easy to better understand the real-time energy efficiency of buildings and how carbon emissions can be reduced.
Time to implement
Technology solutions are key in the quest for net zero. Instead of enduring the carbon-heavy process of demolishing and rebuilding, retrofitting existing real estate with technology can bring value to the building, improve energy efficiency, earn back the money spent through energy efficiency, and help corporations meet net-zero targets that attract investors and prospective talent. If the real estate industry is going to play its part in creating a more sustainable future, retrofitting is the way forward.