Smart Buildings: from pandemic to ESG

One of the most visible effects of the pandemic was noticed when busy commercial areas in large cities disappeared from the map. In a matter of days, millions of people around the world stopped commuting to their appointments and migrated from traditional work environments to carry out their professional tasks at home.

In the specific case of large corporate buildings, shopping malls, and other real estate centers, what we saw was an avalanche of tenants struggling to pay their rents, shops closing their doors, and large companies flexibilities, perhaps even in definitive, remote work and consequently reducing the demand for physical space in their offices. As a result, the real estate market has suffered a dramatic hit with a sharp and abrupt reduction in the flow of income, until then stable and low-risk.

“The pandemic caused a change in the function of commercial buildings, and their owners and managers had to start reinventing themselves,” says David Montoya, Vice President of Business Development for the Americas at Paessler AG, a company that offers building monitoring solutions. However, according to the executive, what could be seen only as a crisis can become a driver for sustainable investments in smart buildings, based on ESG (Environmental, Social, and Governance) practices. There is now a genuine need for commercial building owners and employers to consider the impact of buildings and workplaces on the people who pass through them.

Smart buildings are composed of a digitized infrastructure of integrated devices and applications, all connected – locally and remotely and to the cloud – which, in particular, can facilitate the promotion of ESG initiatives. For example, one requirement in the post-pandemic world that can be seen as the first step of ESG investments has to do with ensuring a safe, healthy, and welcoming working environment. “COVID-19 has prompted companies to reprioritize their workplace management strategies with a view to talent retention and employee safety,” highlights consultancy Verdantix in a report on Smart Building Forecasts.

Of great sanitary importance for the return to offices, this can also be a way to start addressing social, environmental, and building management issues. Corporate environments can adopt touchless technologies to maintain hygiene measures and reduce the number of surfaces that need to be cleaned regularly. These measures will have an impact on employee health and resource use, issues that are intrinsically linked to the apexes of ESG strategies.

For Montoya, digital services via apps are another important component of smart buildings with a dual function – both to help overcome the pandemic crisis and take another step towards ESG practices. “Like digital concierges, these services can be used as the main interaction interface in smart buildings. With them, visitor registrations or requested maintenance actions can be done without human contact, for example, promoting social distancing in COVID-10 times,” says Montoya.

On the other hand, apps are also a key piece to exploit data collected on various fronts from smart buildings and refine it in order to generate ESG value and ensure richer experiences for the occupants and caretakers of smart buildings with comfort and convenience. Using simple apps, it is possible to locate visitors, navigate building environments and adjust HVAC systems and lighting, to name a few cases.  In addition, applications can help improve work-life balance with solutions that can form communities of interest, for example, for relationships outside the workplace. All this has to do with the ESG universe.

The Paessler AG executive explains that several technological solutions, such as those addressing resource control (energy and water, for example), security, automation, and building management, are usually part of the design of intelligent buildings in new construction or retrofit projects. Therefore, the approach to putting in place a smart building project is not an easy exercise. Connecting a smart hardware platform to traditional building blocks without leaving aside the ESG mindset is necessary.

The good news is that you don’t have to be too thirsty. For Montoya, each of these intelligent building components has specific complexities and implementation costs and can be adopted according to the objectives of each project. “In general, the automation subsystems, which are even capable of producing automatic responses, are the ones that require the largest investments,” he highlights.

The executive points out, however, that the efforts are justified. Automation and monitoring systems used in intelligent buildings can collect data for analysis in order to optimize planning and maintenance actions and, ultimately, ensure sustainability, reduce costs and generate new sources of revenue.

Montoya cites the case of a shopping mall in Mexico. After analyzing security camera images, the building management team noticed areas of lower foot traffic. With this information, it was able to carry out shop relocations stimulated by lower rents and conduct promotions that resulted in better financial results – in other words, intelligent commercial actions made possible by intelligent building technologies.

Research from ResearchAndMarkets.com shows how there is an eager market for smarter buildings. More than 78% of new construction is expected to involve at least one facet of technologies related to the smart building sector over the next five years. In addition, some 83% of older buildings in developed economies are expected to require substantial retrofitting.

Just to cite an emblematic example of the demand for technologies for intelligent buildings. US buildings waste up to 30% of the energy they consume due to a lack of intelligence and technology. The way to solve this is to reduce this waste, surely, is through the use of technology to monitor, track and optimize energy consumption.

“Size is this market that must be tapped by a diverse ecosystem of providers, able to partner with and show property managers and owners the benefits of smart buildings,” Montoya highlights. Intelligence that will also help prepare the real estate sector to generally attract investment interest and conform to stricter regulations around ESG principles may become.