Reporting on carbon emissions is no longer voluntary for much of the corporate world. The EU has had climate disclosure regulations in place for just over a year. Cities and states around the U.S. also made their own disclosure reporting rules last year, most notably California, which implemented its requirements last October. So far, the Federal government has failed to enact the SEC’s proposed new reporting standards, but it is expected to be front and center on the regulatory agenda session that starts in April of this year.
Even without federal oversight, there is more pressure than ever for companies to make climate commitments. Climate activists are increasingly targeting corporations. Investors are refusing to invest in companies without a climate action plan. Young workers are preferring to work for companies that have a sustainability-minded corporate culture.
All of this has led many companies to make carbon “net zero” pledges. These are corporate initiatives that require the company to reduce its carbon footprint to zero by a certain date. Since there is no definitive definition for net zero, some companies have tried to use carbon offsets to hit their goals. But this tactic has faced scrutiny, leading more and more companies to go even further with their sustainability goals. Of the largest 500 global companies, 66 percent now have climate commitments, 39 percent of which have a net zero target. A growing percentage of them (15 percent) are going even further by committing to being powered only by renewable energy in the near future.
Now, buildings are starting to feel the pressure from this new corporate landscape. Offices, retail locations, logistic properties, and multifamily buildings are all being asked to report on their carbon use. Most are not prepared for this new task. “Fifty-nine percent of building owners say that they don’t have the data to comply with upcoming ESG regulations, and only five percent of buildings have updated their legacy systems to be ready for the kind of building automation needed for carbon reduction,” said Gary Chance, CEO of Prescriptive Data, a building operation and HVAC software provider.
Historically, buildings have heated and cooled themselves to minimize energy usage without sacrificing occupant comfort. Now, the equations that determine a building’s heating or cooling schedules are getting much more complicated. They have to take into consideration both external and internal data about outside temperature and building occupancy. Many also communicate with their utility provider to optimize for carbon reduction by scheduling heating and air conditioning when the grid has a large amount of renewable energy available.
Another trend in the corporate world that is making the HVAC calculation even more complicated is on-site renewable energy generation. Since so many companies are committed to not only reducing their energy usage but also shrinking their carbon emissions to zero, there has been a rise in the installation of renewable energy infrastructure. The amount of properties that have some sort of energy generation has grown by 10 times in the last decade. These aren’t just small-scale installations either. The vast majority of the on-site renewables in buildings produce at least one-quarter of the power the property uses.
On-site power generation facilitates the use of clean energy in buildings, but it complicates the operation of HVAC software. Solar energy, being the most prevalent form, is limited to generating power when the sun is available. Therefore, building management systems must account for the timing of renewable energy production to minimize carbon emissions associated with heating and cooling. The integration of renewable energy with battery storage and microgrid technologies allows buildings to store excess energy for use during high-demand periods. This advancement adds another layer of complexity to the calculations performed by building management software.
The drive towards achieving truly net zero buildings is great for the environment. However, realizing this goal requires outfitting our buildings with new infrastructure. This includes installing modern equipment such as solar panels, batteries, and sensors, along with developing software capable of processing an increasing variety of data inputs. Despite the rapid growth in the adoption of on-site renewable energy sources, they are still present in less than two percent of buildings across most property categories. To successfully track and reduce carbon emissions, buildings need to be upgraded with sophisticated software and staffed with knowledgeable professionals committed to achieving these goals.