ESG improvements in Melbourne: Part one - Energy, Water and ESG demand

02 Nov 2021

By James Pearson

ESG improvements in Melbourne: Part one - Energy, Water and ESG demand
ESG & Sustainability in Melbourne’s commercial real estate sector is a fascinating topic. New innovations and initiatives are becoming increasingly prominent and while Building Management teams have had to navigate some setbacks due to the pandemic, we’re also seeing some great opportunities to reduce the adverse impact on the environment which commercial real estate can have. In this two-part article we’re exploring a few of the emerging trends, some fuelled by the pandemic, and showcasing successful ways ESG improvements can be made.

In this article we’ll explore the ESG demand, energy and water consumption, and we welcome you to read part two, covering waste, interconnected buildings and behaviour change. We hope that this will inspire you to further your own ESG journey.

The new driving demand for ESG
Overall there is an emergence of tenants driving the ESG demand, which in turn puts pressure on property management teams and asset owners to improve a property’s sustainable targets. These same tenants often now belong to a generation who are increasingly looking to large corporates to take ownership and accountability for how its operations impact the environment.

The fast-moving consumer goods (FMCG) industry is a good example of where this is taking effect, and how it influences real estate decisions. If the sustainability goals of large consumer brands are not being met due to the real estate that they occupy, these brands are now relocating to assets or sites that can align with their goals and ESG targets. This is a wake-up call to asset owners and to notice that they can’t be seen to be resting on their laurels.

At CBRE many of our asset owners and tenants have ambitious, yet achievable, ESG targets while others are still evolving. We support our clients with these targets to ensure they are achievable and meaningful, so as not to be labelled as ‘Green Washing’ or ‘Green Wishing’. 

Weekend energy consumption: A buildings resting heart rate
When measuring the efficiency of buildings, we often use intensity analysis (e.g., people or m2/kWh) to determine whether the building is performing well or not. During the pandemic which created occupancy fluctuations, we focused on the most consistent data currently available – weekend consumption, aka the building’s resting heart rate. Reviewing this data has enabled us to help our clients reduce their baseload consumption by up to 33%. This diagnostic approach of working out what is running over the weekend and switching off non-essential componentry has also helped our site teams to really understand what they are working on. We’ve found that even when the buildings are back up and running normally, we can focus our attention on what the building’s baseload returns to overnight as an indication of whether some of the changes have been effective throughout the week.

Additionally, an interesting observation from energy consumption analysis of low occupancy and winter months is the increase in gas consumption. With less people and less machinery (e.g. laptops, printers) in use, the radiant heat that warms the building is no longer there. To compensate, many buildings have had to burn more gas to maintain ambient temperatures during the colder months. As a result, the NABERS Energy rating of some assets have not improved in line with expectation.

Imagine if a building saved 9000 litres of water every time it rained significantly? 
In Australia our summers are expected to become hotter for longer, putting us at risk from a concoction of droughts and fire. Some of our owners and tenants have made bold commitments to reduce their water consumption, a necessity in our climate. ISPT recently announced a target to reduce water consumption across its portfolio by 30% by 2025, a good example of how ambitious we all can be.

Recently one of our asset owner’s saved 9,000 litres of water over one weekend of consistent and heavy downpour, putting their new water recovery system to the test. The system works by channelling the falling rainwater from the roof of the building into specialised tanks installed in the plant room, one floor below the roof. From there, the water is distributed into the building’s grey water system – saving valuable drinking water from being used. An additional benefit to this system is not having to pump this water to the roof of the building – an energy saving as well as a water saving; two for the price of one!