How green really: how measuring what happens inside a building is the ultimate Climate Change data challenge.
I left my role as Head of Labs at Bulb in late April and moved on to work with Overlay a project incubated by ING Labs researching how financial institutions could utilise building data to develop a new generation of sustainability-led financial services.
After working with Bulb, EDF & British Gas over the past 15 years, I certainly knew plenty about energy and smart building solutions (access control, environmental monitoring, occupancy monitoring) but started digging into how these things connect to the world of finance. I wanted to find out if we could easily use the usage data from across a building and help financial institutions access that data and offer ‘green’ financial products like loans, bonds, mortgages.
But instead of radical innovation opportunities, I unearthed some quite mundane yet crucial data problems that will need to be solved by the whole tech sector if we’re looking to reach the ambitions set by the 2018 IPCC Report on Climate Change. Initially the team I’m working with is concentrating on commercial real estate and moving into other areas over the next few months so this post reflects this.
When it comes to measuring the ‘greenness’ of a building with multiple tenants things can get complicated quickly. A few different things need to be taken into consideration such as:
- the way the building is built
- the way it’s being utilised
- the local weather
- local building standards
Then there are more strategic things that you could decide to measure such as:
- the sustainability of the construction site
- the impact of construction on that land
- whether the energy supplied comes from renewable sources
- whether it supports access to public transport options
- The quality of the experience when you’re in the completed building
Any more and you’d be looking at each building owner in a lot more depth, doing the type of due diligence banks love, or something called ESG (Environmental, Social, Governance) benchmarking. This is quite heavy handed and requires levels of disclosure across a business that is difficult to gather automagically so I’ll leave this aside for now.
If what we’re trying to do is to measure the impact of a building there are 2 ways that the market does this today in September 2019: EPC data & green building certification. I’ll discuss both.
In 2010 the European Commission published the Energy Performance of Buildings Directive which makes it compulsory for building owners to produce an energy performance assessment when there’s any change in lease or ownership. They even go as far as detailing what the assessment should include (Annex 2 of the Directive) but not precisely how it should be conducted nor where it should be published.
At a national level, every country then uses their own ‘National Calculation Methodology’ to compensate for local weather and building practices.That calculation ends up being used by government approved software which a trained assessor can use, together with an on-site visit of the building. This is important: the assessment process is not and cannot be digitised. The discrepancy between a plan and the real thing, as well as lack of effective documentation means a human is ultimately in charge of assessing the fabric of a building. That also means there are differences in assessments with every assessor. Not ideal but that’s one of the many things that aren’t ideal.
Once an EPC assessment is made, a certificate is issued and sent to the owner of the building and in some cases, a national register. That register isn’t mandated by the European Commission and they don’t document them, instead indicating if they are publicly accessible or not. Out of the 27 member states, some have public registers (9), or registers with limited access (7) but many don’t (11).
The strength of EPCs is that it’s part of EU law so everyone has to do it. The weakness is that every country calculates theirs slightly differently so it’s hard to compare buildings across countries. What does a D rated building in Holland mean compared to a D rated building in Spain? Is the path to improvement the same?
And EPCs are not yet massively popular. It’s in the law but enacting it at a local level is down to the local authorities which, you know, is a problem sometimes (she says talking from the epicentre of people who have a problem with the EU right now).
When so many financial services are built on international real estate portfolios, the hyperlocal nature of EPCs can be a barrier. I think that’s one area where the European Commission should get more involved to force a public and detailed register for every country so that people can shop their next factory floor or restaurant knowing what the EPC history of the building is. How precisely this clashes with GDPR, I’ll explore in a future blog post.
Green building certificates
Outside of Europe, there are no standardised ways of describing the greenness of a building. So organisations around the world took a blended approach, signing up to commercially driven certification schemes specifically targeted at new buildings. This serves the double purpose of helping champion newly designed buildings instead of ‘old’ buildings and making people think across different dimensions of the building project. Here are some of the aspects which certifications schemes tend to analyse:
- Management (procurement, stakeholder participation, ease of maintenance)
- Indoor Environment (building management systems, ventilation, heat, smoking policies, indoor air quality)
- Materials (source, recyclability, renewables)
- Energy & Water Efficiency (CO2 emissions, energy sources, energy delivery performance, water savings)
- Site Ecology (public transport access, car parking facilities, outdoor environment, cyclist access)
- Innovation (smart technology, culture, job creation)
Green certification is often for a new building with one owner in it. The mixture of topics covered in the certification means that a well-rated building could hide some fundamental flaws simply because it did well on other aspects. These schemes are also quite expensive and not regulated. In some instances, they don’t even require an on-site visit which means they can be very much an abstracted view of a building. Why would anyone use them, well in lieu of regulation, it’s a good idea to champion sustainable building practices in any way possible, especially in nations and regions most affected by climate change.
Both EPC and green certification are better than nothing at all but the real challenge is in comparing them effectively and championing them effectively. The EU’s lack of definition and green certification bodies’ lack of transparency on their methodology doesn’t help. But all of this is quite opaque to the general public. It was notable though that the UK Ministry for Housing, Communities and Local Government decided that EPC data wasn’t personal data and republished the certificates in a very comprehensive open data register. It’s the highest quality data around in Europe along with the Dutch registry and along with APIs from green certification bodies like BRE it helps the financial sector automate the decision making around commercial real estate, helping those owners that need it most and helping buildings improve over time.
All of this research feeds into Overlay, the tool I’ve been helping Stef, Tee, Ant & Remy build and will be showcased in the Sibos Discover Zone next week in London. Go say hi to them and keep an eye on all this, it’s going to get exciting.
Happy #ClimateStrike day everyone.