Change from within? Carbon management in commercial real estate

Panel: 1. Foundations of future energy policy

This is a peer-reviewed paper.

Authors:
Megan Strachan, Energy Institute, University College London, United Kingdom
Kathryn Janda, Environmental Change Institute, United Kingdom
Bernard McKeown, CO2 Estates, United Kingdom

Abstract

All firms and organizations pay energy bills, but not all actively “manage” energy. Where energy management does occur, it may be driven by financial concerns or corporate social responsibility, rather than treated as a strategic business opportunity (Cooremans 2011). This paper examines opportunities for developing data-backed software solution to support commercial real estate (CRE) firms in adopting strategic energy-saving opportunities. Previous research has suggested that cross-firm partnerships and portfolio assessment tools are helpful in producing "middle out" change in the CRE sector (Parag & Janda 2014; Janda & Parag 2013). This paper continues in this vein of research, looking at assessment tools for portfolios of existing buildings and the groups who invent and support them. It provides a partial overview of non-domestic data in the US, Europe, China, and India with a particular focus on the UK. It finds that, on average, European governments do not have the data necessary to make critical arguments to the CRE sector. From this, the paper suggests a focus on learning with and from data and initiatives based within the CRE industry itself. The paper highlights the work of emerging for-profit and non-profit groups who work with and for the CRE industry. It provides a snapshot of 10 groups (mostly small and medium enterprises) who provide data analytics software for retrofits, which is a key element in turning numbers into knowledge. A deeper dive into the work of two of these groups who are active in the UK—Pilio and CO2 Estates—shows diversity in the orientation and capabilities of the “software as a service” model. It also suggests that these early stage companies could develop new approaches and tools to solve data problems that have thus far confounded academic researchers, governments, and the European CRE sector. The conclusions discuss policy implications for the future of a CRE market based largely on self-regulated solutions identified by 3rd party algorithms, rather than one driven by government policies.