When it comes to the role of data in the built environment today, we don’t need to consider the value, we know it’s essential. Essential for understanding the performance, emissions, and operating costs of an asset and, in the context of embodied carbon, the true environmental footprint of an asset.
According to the UK GBC, “Embodied carbon from the construction and refurbishment of buildings currently makes up 20% of UK built environment emissions.” With such a significant number attached to these emissions, accurate reporting is key. Without it we simply cannot assess improvement – which, in any case, is the main reason behind putting environmental targets on the table for net zero carbon. However, embodied carbon is just one aspect of a data stack any investor or asset manager should be measuring and monitoring.
So, if we know greater access to accurate reporting data can move the dial for the industry and make a significant impact on the planet, we need quality data, and fast.
Where to start – tech strategy
Technology can truly transform the data landscape of any asset, both in pre-construction and during operation, and a well-considered tech stack can be the difference between just trading an asset or making a significant return on investment. When chosen strategically, it can enhance efficiency in so many ways and automate what would otherwise be very manual, time-consuming tasks. And, in the UK landscape at least, in the absence of a clear modeling strategy from the government with respect to embodied carbon, seeking assistance in technological solutions is a logical approach.
Your tech stack should be split within three core areas: construction insights, operational insights, and management insights. Using this structure, you can assess which technology solutions are available to give you a complete data overview of your assets. This could be as simple as tools that help you calculate embodied carbon, or those that report on different manufacturing activities to reduce time. It could be sensors helping you understand the use of communal spaces in an asset, or even reporting software that allows you to give accurate data to investors on how your building is performing to ESG standards. And the truth is, there are solutions for all the above, in abundance.
When designing your tech strategy, consider whether the solutions address the following areas, to drive transparency and accuracy:
- Lost time – Tech is all about productivity and efficiency. So, consider ease of use (UX), set-up time, and whether it can alert you to anomalies in the data without you even needing to log in. Bottom line, if the tech doesn’t save you time, it’s not worth it.
- Set-up process – This can mean big effort upfront. Make sure to assess what needs done to allow it to function the way you need. Quality tech will have designed solutions for time saving at every touch point.
- Ingest and export capabilities – Managing your data flexibly is key, and this means effective ingestions (obtaining and importing data for either immediate use or storage) and exporting cleanly. This permits more dynamic reporting and means if you need to upload data you have a multi-purpose solution. Screenshots can only take you so far after all. And with reporting being so detail-oriented, you need to know the data works for you.
- Cost – This may seem like an obvious point, but cost is arguably the most significant thing to consider, and some tech solutions can have hidden costs to be aware of. Considering whether it will be a Capex or Opex cost is one thing, but whether it can help you generate ROI or affect your projected ROI is key, and the best way to assess this is not just ‘year 1’, but years 1 to 5.
- Data cycle – When reliable insights are the objective, it is important to consider whether data is being processed in real time, every hour, or on a daily scheduled basis. Make sure to assess the data cycle, because just as your days can look different, your need for data can change, and the more frequently you can report, analyze and assess, the better.
Ultimately, with the right tech stack comes quality data, and with quality data comes transparency in performance, which can unlock the following benefits:
- Greater access to green capital – SFDR Article 8 and 9, otherwise known as “light green and dark green funds”, are EU regulations aligning investment funds with ESG-focused real estate. A key element in gaining access to this capital is through accurate, granular asset-performance data. See more on SFDR, here.
- Reduce the risk of stranded assets – Data – and in the context of trading assets, ESG data – is key for reducing the risk of stranded assets. With so much emphasis placed on environmental responsibility, NZC and ESG regulations, quality data can allow you to not only report on asset performance but can also help you prove the sustainable viability of your assets for sale. However, if retrofit is your only option, then we have some intel on that too.
- Enhanced Operational Efficiency – Not only can quality, granular data allow you to enhance operational efficiency by reducing energy waste and reducing utility costs, it can also help you spot trends in the data. This can allow you, for example, to find malfunctioning heating systems, overheated unoccupied spaces, and so much more. However, the most potent aspect of quality data is that it allows you to make data-led decisions, and that can reduce the risk of wasted time and cost on unnecessary activity. For example, why spend budget on a communal cinema area in a PBSA asset if the data shows that, when available in other assets, this kind of feature is only used 12% of the time. You can then pivot and use that budget for more essential additions, such as automated temperature controls, that allow you to measurably reduce energy costs.
At the end of the day, embodied carbon has a long way to go – and government regulation and transparency in requirements needs to take center stage – but quality data is tried and true, and there are solutions out there today that can make your life easier and make your assets more valuable.
Asset performance data is something the real estate sector must invest in, and it needs to be considered throughout the construction cycle to unlock real benefits. It seems that, in summary, all roads do lead to technology.
This article was written by Ben Roberts, CMO and Co-Founder at Utopi.
