More than 90% of the UK’s homes are heated by fossil fuels and, according to the UK Government’s Energy Security Strategy, this accounts for a third of total gas use. In plans outlined in May, the government plans to tackle soaring energy bills by making 700,000 homes energy efficient by 2025 and upgrade all of them by 2050.
Net Zero cannot be achieved unless there is a focus on decarbonising real estate. Buildings are the second largest source of greenhouse gas (GHG) emissions after surface transport but unfortunately, we haven’t seen much progress in real estate decarbonisation over the last ten years due to the lack of improvements made to home energy efficiency. This feels like a missed opportunity, given that the efficiency improvements set out in the Energy Security Strategy would, if they could be implemented today, save the average consumer about 20% on their heating bill.
A focus on efficiency
In their most recent Progress Report, the Climate Change Committee calls on Government to go further and create “a public energy advice service to provide households with guidance on decarbonising and adapting their homes to climate change” - the idea being to make sure local providers can assess home energy performance and, where necessary, offer advice on retrofitting. In short, they see energy efficiency as “a neglected policy area” with significant potential to accelerate our transition to a low carbon future.
With energy prices at record levels, there has never been a better time for the widespread implementation of technology that supports building energy efficiency. Two-thirds of emissions come from the operational phase of a building’s lifecycle which is why the environmental aspect of Environmental, Social and Governance (ESG) has tended to focus on operations - as it represents the greatest potential energy saving.
Resident engagement and emissions reduction
Our research, in collaboration with Utopi ESG Technology and Spike Global (to be published in the coming weeks) looks at the potential gains that come from resident engagement during this phase. In multi-tenant properties, engaging with residents and successfully encouraging them to reduce energy consumption can have a significant impact on building energy use. Each saving adds up and compounds with every apartment. Drawing on the insights of behavioural science, which tells us that people have a deep instinct to conform to social norms, we have found that providing feedback on consumption and comparison with other residents can reduce overall building emissions by 7% to 35%.
Achieving Net Zero in multi-tenant properties can be rapidly accelerated by the adoption of technologies that extract energy usage data, giving owners and operators a detailed overview of building energy use. It will be critical to understand energy consumption not only at the building level, but room by room. Progress can be accelerated further if building operators engage residents with personalised information, showing them exactly how much they are using at any one time, how they compare to others, and how they can save. IoT technology makes this possible and it’s up to us to make it work.
Nudge Theory
Dan Smith, former MD of Nido Student Living and founder of ESG consultancy Good Management Group, has been working with operators and investors on their ESG strategies, he comments:
"ESG in PBSA usually focuses primarily on energy and carbon measurement and management at a property level. However more recently we're seeing clients adopt 'nudge theory' to help residents improve their social and environmental impact using signage, communication, training and incentives. The key to a successful ESG strategy though is to arm the residents with simple to use, relevant and ideally gamified tech solutions so that their impact can be managed and measured at the touch of a button on their terms. This combined approach can drive tangible change across the PBSA industry".
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