For commercial real estate owners and operators, sustainability has never been more top-of- mind. From
both investor and tenant perspectives, sustainability is shifting from a niche value-add to an essential
requirement for any successful property. An essential component of sustainable operations is
minimizing a building’s demand for resources such as electricity, gas and water.
However, building owners shouldn’t need investor or tenant motivation to reduce resource demand.
These elements are simply good business practice. Here’s why:
- Risk Mitigation
Any savvy businessperson will tell you that mitigating risks lead to higher profits. When you can
eliminate chance, it is easier to reach your desired outcome. In terms of resource consumption,
the risk of natural disaster, climate change, supply chain failure or geopolitical struggle could all
drastically impact the availability and cost of electricity, gas and water. By minimizing demand,
we inherently mitigate our exposure to these risks. - “Trickle Up” Sustainability
It can be easy to forget the interconnectedness of electricity, gas and water. Water treatment
and delivery has massive energy demand. Gas extraction and refinement requires large amounts
of water. As the end user, by reducing our consumption we reduce our footprint by a factor
much larger than what’s shown on our monthly bill. Those savings, in turn, trickle all the way up
the supply chain to help preserve resources yet to be extracted. - Cost Savings
Arguably the simplest reason to reduce resource demand is that it saves money. By employing
the most efficient means to operating your business, owners and operators will cut costs
dramatically. Although implementing systems for demand reduction can, at times, involve large
upfront investments, IoT tools can provide tangible return-on- investment feedback to ensure
your investment is recouped and your utility bills fall. For commercial realty owners, that
feedback powerfully effects NOI and property value.
One of the oldest mantras in sustainability is “reduce, reuse, recycle.” As technologies advance in reuse
and recycling capabilities, the power of business leaders to drive sustainability will continue to grow. We
should not, however, overlook the value of reduction. It is often the lowest hanging fruit in the
sustainability system.