This article was originally posted by i-FM.com.
Embracing technology to monitor emissions and act on real-time data positions FM teams to achieve real change.
It’s clear that our built spaces deeply impact our environment. Buildings account for 17% of the UK’s greenhouse gases, and facilities management is an essential sector for addressing the urgent issue of reducing climate harm. To reduce GHG, facilities managers have a powerful role in making spaces more efficient and influencing how people engage with buildings. Success in both of these functions will likely significantly lower carbon emissions.
Understanding current venture capital flows will clarify what technologies will be improving over the next decade and beyond. As intersections of funding, technology, climate efforts and built environments converge, we will see innovation bloom to ensure net zero commitments.
Climate-tech and proptech – set to grow
The UK leads Europe for VC investments in climate-tech start-ups and is the third top market globally. In this environment, climate start-ups are experiencing rapid investment, almost double the private funding they received last year: $4bn in 2021 to $7.5bn at the end of 2022. Renewable energy and energy storage ventures delivered more than $1bn of funding in Q1 2023 throughout Europe, and a growing number of tech entrepreneurs are focusing on climate issues, providing funds to more than 5,200 start-ups.
VC firms and entrepreneurs are aligning to address climate change. Transportation-centred tech companies have nearly captured half of the overall funding. However, transportation only contributes a quarter of the UK’s emissions. In contrast, built environments are responsible for 17% of emissions yet only receive 5% of VC investing.
Proptech investments saw a global downturn of about 38% from 2021 to 2022. Economic conditions such as rising interest rates and recession fears are behind this trend, which has strongly affected the real estate sector. This will likely change in the next 10 years, with global investments in proptech predicted to rise again by as much as 375% by 2032.
Increased investments in proptech strengthen start-up resources to address our built environment’s carbon emissions. Those start-ups demonstrating real-world value will likely see the most success and gain traction when VC funding begins flowing again. In the coming years, we will likely see financial backers supporting start-ups armed with strong case studies, leading the way for entrepreneurs and investors to focus more on the overlooked contributors of climate change.
What does this mean for facilities management?
Facilities teams play a key role in updating buildings in our new era of work, play and sustainable living. We learned a lot about building operations in 2020, as many buildings temporarily closed and workplace and leisure activities alike were centred at home or outdoors. Would you be surprised to learn that buildings’ energy use didn’t drop as dramatically that year as one might expect? In New York City, for example, overall building energy use only fell by 9%, and carbon emissions had an even smaller drop of 7%. Even with a significant decline in building occupancy, energy levels weren’t correspondingly reduced.
Facilities teams should learn from that moment in time that climate-tech solutions are important investments for energy reduction, especially now as building occupancy is changing and more companies are returning to in-person work or hybrid schedules. Buildings should be responsive to tenants’ shifting needs and fluctuating occupancy levels without wasting energy. As the workforce frames its priorities for the role buildings play in professional development, team building and the wider socioeconomic model, companies are finding that the most appealing commercial buildings are energy efficient, comfortable and sustainable. It will be up to facilities teams to bring maximum value to these investments.
These changes come at a pivotal time for ESG reporting and carbon emission reduction efforts. Facilities management serves a critical role in both of these areas. More attention to proptech means organisations will invest in solutions for today’s most pressing needs. These include AI-enabled controls for sustainable and flexible building operations, renewable energy storage and automated emissions data collection. These types of solutions are likely to become more available within the next decade or so, improving every organisation’s ability to reduce the effects of climate change. Facilities teams will be the on-the-ground pioneers for implementing and fine-tuning these instruments, leading the way to ensure new technologies deliver their promised results.
We are facing a time when our built spaces need to evolve to serve both private and public interests. It’s heartening to see that the entrepreneurial world is seeing the high value of the facilities management sector in this context. With the popularisation of proptech and prioritisation of proptech/climate-tech solutions on the horizon, facilities teams will soon have many more tools at their disposal to transform their buildings’ capabilities.
Carl Coken is vice president, Atrius Engineering at Acuity Brands, responsible for the development of the Atriussuite of products and solutions.