In November 2022, world leaders came together in Egypt for COP27 to act toward achieving the world’s collective climate goals. As these leaders met, we were reminded just how much work remains to be done to achieve our climate goals and combat the worst effects of climate change. The event served as a reminder that it’s not just up to governments. Businesses also have their own role to play in curbing carbon emissions, with urgent actions required if we are to have substantial impact against the momentous damage of climate events worldwide.
According to the World Economic Forum, commercial buildings, including offices, are responsible for 40% of global energy consumption and 33% of greenhouse gas emissions. While large enterprises may be reducing their real estate footprints because of remote or hybrid work policies, these organizations can still have a major positive impact by taking bold steps to reduce energy consumption in their built environments.
However, as the global economy teeters on the verge of a recession, sustainability initiatives are in danger of taking a backseat for struggling businesses looking to cut costs and preserve profitability. This type of short-term thinking has potential consequences for individual businesses. They are missing opportunities for significant cost savings through reduced energy use, and instead are continuing to contribute to planet deterioration.
Instead of going for a short-term cost-cutting solution, business leaders have both an opportunity and responsibility to double down on sustainability to achieve emission targets and maximize ROI as the economy rebounds. Here’s how business leaders can make it happen in 2023 and beyond.
A long-term sustainability strategy starts with the built environment
Short-term thinking is flawed when it comes to energy consumption and sustainability. But what does a long-term strategy look like in practice? To answer that question, business leaders must first consider their built environments and their impact on the larger global emissions landscape. Organizations can take steps to make those buildings more efficient through investments in smart building technology that will pay off today and for the future. By doing so, not only can leaders leave a lasting positive impact on the environment, but they can reap immediate financial benefits to the bottom line.
Digitalized built environments are the key to achieving both profitability and sustainability goals. Technology innovations around smart sensors, wireless networks, edge computing and cloud platforms have made it easier than ever to collect, organize, analyze and act on building data for better decisions that can have a real impact on the environment. These emerging smart building solutions can be implemented to retrofit existing building infrastructures and are rapidly becoming a requirement for new construction.
Along with occupancy and location data, smart building technology can provide insights into energy consumption and greenhouse gas emissions. By installing sensors in light fixtures and augmenting with surface and people-counting sensors, leaders can blanket a building with a complete sensing environment — to analyze energy use on each individual floor, building and across a campus. Converting to LED lighting alone reduces carbon dioxide emissions by 60% to 70%. Additional sensor capabilities that optimize the use of daylight through daylight harvesting can reduce emissions even further, resulting in total carbon dioxide savings of up to 94%.
When combined with occupancy and location data, leaders can be equipped with a bevy of insights that can determine what protocols and changes can be made to create more ongoing sustainable business operations. This includes reducing their real estate footprint to make an even bigger impact on their sustainability goals.
Taking bold action
According to Accenture, one-third of the world’s largest 2,000 companies by revenue have established net zero emissions targets. Yet, just a fraction of those companies are currently on pace to reach their goals by 2050. More specifically, 93% of these organizations will fall short of achieving their net zero commitments entirely.
Many public companies are hamstrung by shareholders and investors who are typically focused on short term returns — objectives that are notoriously hard to illustrate when it comes to sustainability. However, with recent ESG ratings having an impact on investment behaviors, sustainability initiatives have an opportunity to rise in importance with true financial impact.
Private companies have a unique opportunity to be bolder and take major steps in 2023 to further their corporate sustainability goals, while lowering costs with energy savings. Actions around sustainability, which of late have been owned by the C-suite or at the board level, must trickle down to all business units in a coordinated effort, armed with data on the long-term cost savings for sustainable business to bolster the case.
2023 and beyond
Making a business sustainable also impacts talent attraction and retention. Employees want to work at sustainable companies, including their office environments. According to a 2022 survey from IBM, two-thirds of global employees are more willing to apply for and accept positions with environmentally sustainable companies.
A new year is upon us, and I urge my fellow leaders to consider making 2023 the year they become serious about sustainable business operations. Instead of slowing the march to planet health, we must double down in a win-win scenario that requires long-term vision, steady leadership and bold moves forward.
Stefan Schwab joined Enlighted as CEO in 2018. Prior to Enlighted, he was the Executive General Manager for Siemens Building Technologies in Australia and New Zealand where he led business transformation by empowering people and increasing customer centricity. In his spare time, Stefan enjoys playing tennis and hockey, cooking with his wife as well as traveling through North and South America.
Opinions expressed by SmartBrief contributors are their own.