Finding and implementing energy efficiency measures across a portfolio is no small task – nor is it a one-person job. Engineers, asset managers, property managers, and executives all have a role to play when it comes to optimizing energy performance, making it imperative for ESG professionals in real estate to understand and navigate the unique dynamics across these teams.
Consequently, one of the biggest roadblocks to finding and acting upon energy efficiency opportunities can be getting everyone on the same page. Since each of these players have different job responsibilities, motivations, and perspectives, they require different information and levels of detail. But while the challenges here can be great, the impact at individual buildings can also add up, translating to significant gains at the portfolio level.
In this article, we’ll walk you through potential challenges and best practices that exist at both the individual property and portfolio levels, helping you identify and take action on energy efficiency projects and get buy-in from the ground-up to meet your ESG goals.
It all starts at the building level. At individual buildings, engineers, property managers, and asset managers may all be involved in decisions about energy efficiency projects at various points in the process.
Engineers are on the front line, responsible for ensuring the smooth and efficient operation of their buildings. They may leverage BMS systems or other smart building technologies to monitor performance, and are therefore often the first to identify operational issues or inefficiencies that could lead to a potential efficiency project.
When potential efficiency projects are identified, coordination with asset managers and property managers – and the importance of good communication – really start to come into play. Asset management and property management oversee leases, budgets, and tenant relations, and will typically be involved in approving any costs associated with efficiency projects that could impact an asset’s operating budget and overall financial plan. Asset managers and property managers are also often the forward-facing people charged with managing tenant relationships, and will want to understand and communicate any potential impact to tenants. In practical terms, this means that when energy savings opportunities are identified or realized, the asset manager and property manager may require further information to support investment or action.
To help overcome these challenges, general best practices at the building level include:
Solutions like Aquicore’s load analytics tool and team of Building Systems Engineers (BSEs) can go a long way towards streamlining this process. By continuously scanning for anomalies in energy consumption and supporting the investigation into potential causes, Aquicore helps teams identify efficiency projects that can be scaled across portfolios.
For example: an AQ BSE may discover an abnormality and, through working alongside the building engineer, discover that there is a faulty piece of equipment, or that the building’s controls are following an improper schedule. The AQ platform allows users to identify and note solutions, and then log potential estimates for cost and consumption for the asset manager. The asset manager can then weigh in on any potential conflicts with budgets, leases, or tenant needs, and act accordingly.
All parties are also able to use Aquicore’s Utility Budget Tracking tool to review the impact of any given efficiency project over time, and validate the impact and cost savings. Asset managers and property managers can use this tool to set a utility budget for each month based on prior years, easily identify any unexpected variances, and work with engineering to investigate the potential root causes – all of which can lead everyone back to discovering more (you guessed it) efficiency projects!
Used in tandem, these tools can provide the insights needed to help building engineers (who are focused on operations) and asset managers (who are focused on budgets) overcome built-in communication challenges and get crucial energy saving projects off the ground. ESG professionals can then work with the property teams to scale projects across other assets to ensure the portfolio is well-positioned to hit its annual energy reduction targets and ESG goals.
ESG professionals oversee and must report on the entire portfolio, so it is crucial that they have the information necessary to roll up individual building and project performance to the portfolio level. This is especially critical in discussions with the executive team.
Executives are focused on the big picture – and the bottom line. When discussing energy performance, executives often want to know how the whole portfolio is performing compared to previous years, what strategies and tactics broadly worked to reduce energy consumption, and the types of projects that can be repeated to further reduce cost and consumption – and ultimately meet portfolio-wide ESG goals.
To effectively respond to these high-level questions, best practices include:
Aquicore’s high-level portfolio metrics can be a good place to start when communicating performance to executives. Here, we can see portfolio-wide energy use, the total number of projects completed, and project impact across the entire portfolio over a rolling 12-month period.
The overall project impact can help explain any observed potential portfolio-wide energy reductions:
Just beneath these high level metrics is the Electricity Consumption Leaderboard, which shows individual buildings and how they contribute to the above “lump sum.” This leaderboard can be a good starting place to isolate specific examples for successes and improvements.
To highlight high performing buildings, you can sort buildings by using the variance percentage. Using the project data, you can attribute reductions to specific projects, source success stories, and make a case to your executive team for replicating these projects at lower-performing buildings to further reduce energy consumption across the portfolio.
From property to portfolio, every player is crucial to the initiation, execution, and success of an energy management and ESG program. It all starts at the building level, where individual property teams can identify and facilitate the appropriate efficiency measures for a given building. The more that property teams can demonstrate their successes up the chain, the more likely it is that successful projects can be replicated at other buildings. And the more an organization can reduce its energy usage by completing successful projects across the portfolio, the more confidence and credibility will be given to the ESG program by the top – and the happier investors will be.
Interested in learning more about how Aquicore connects property actions to portfolio outcomes? We’re here to help you identify projects, build an action plan, and facilitate communication and execution across all of your assets. Get in touch with us here.