Eco-systems and Techno-systems

Energy efficient technology leads to good business practices

by Scott Morey

At a very basic level, most people believe our planet is getting warmer and the cause is carbon emissions from industrialized countries. From there, it gets more complicated: Many individuals in the United States think global warming is too expensive to mitigate and the effort could hurt business. As such, social responsibility—rather than economic prudence—seems to be the major reasoning behind arguments supporting spending money in this area.

Furthermore, many supporting arguments to implement eco-friendly systems at the corporate level seem to come from Britain, and many Americans interpret them to be part of some larger European socialist conspiracy to undermine their way of life. It’s interesting for me to state and observe this as an American who permanently moved his family to London earlier this year.

A recently published report by Sir Nicholas Stern, head of Britain’s government economic service, provides information on the economic effects of global warming. The report essentially argues the global economic cost of doing nothing is far greater than the cost of reducing greenhouse emissions today. 

How does this impact the real estate industry? We can now better manage our utility and energy costs using technology available today. When we think of utility and energy systems within our properties, we think of them as individually isolated systems. However, the connectivity of these systems should be noted.

Like the evolution of personal computers from stand-alone non-communicative devices to the integrated systems of today, the energy and utility systems in buildings can “talk” to each other through “networks.” The results are quite interesting. 

Imagine being able to audit utility bills at the touch of a button by maintaining a history of the meter readings and rate structures, and having that integrated into an accounts payable system. Imagine being able to instantly understand energy usage and the financial impact of after-hours cleaning personnel leaving the lights on. Imagine tenants being able to schedule HVAC needs via a Web site after hours to have it automatically turned on and billed. Imagine remotely controlling and managing external water systems, and having a system smart enough not to turn the sprinklers on because it is going to rain that day.

Now is the time to stop imagining. These technologies not only exist, they lead to good business practices. The value of a property will ultimately increase, whether through increased demand from lower overall occupancy costs for tenants or through increased cash flow by recovering a higher percentage of property and corporate-related operating expenses. So, while the Socialist conspiracy to change the American lifestyle can be ignored, the fundamentals that got us where we are today—tending to good business practices—cannot be ignored.

Scott Morey (scottmorey@realfoundations.net) is managing director of RealFoundations’ London office.

Source: Jan/Feb 2007 issue (Volume 72, Number 1) of JPM®, Journal of Property Management.