Net Zero Impact- Opportunities and Challenges for Facility Management Companies
Net-zero as a term has been there for quite some time. It can be described as the reduction in the demand for energy and materials to a level that can be met solely by resources that do not emit greenhouse gases. In simple terms, it is a function of resource consumption during the design or construction and the operational phases.
As per the Paris Agreement signed in 2016, most of the private and public listed enterprises have committed to achieving carbon-neutral or carbon positive, science-based targets between 2030 – 2050.
If developed economies want to follow the path of net-zero carbon then they will have to focus on the buildings, specifically commercial real estate, where most of the resource consumptions can be controlled and monitored in a better way. Facilities management and sustainability go hand-in-hand.
Will this race to net-zero create a new business opportunity for FM firms? Or how can they leverage this initiative to strengthen their ties with clients and get strategically involved in it? Umesh Bhutoria talked about such challenges and implementation methodologies in his session on a net-zero building.
Ways to Achieve Net-Zero Targets
Facility management companies can concentrate on two main aspects to reduce greenhouse gas emissions:
1. Supply-side Measures
One approach involves adopting on-site renewable sources like solar, wind, fuel cells, or entering into off-site PPA (Power Purchase Agreement) contracts with renewable energy producers.
2. Demand-side Measures
The second focus area is on demand-side changes, which are often more cost-effective and controllable. This involves improving the energy efficiency of assets and influencing occupants' behavior (without causing any discomfort). Umesh suggests that facility management firms can play a significant role in demand-side changes, given their insights into facility operations, assets, and occupants' behavior.
Opportunities for Facility Management Companies
By embracing the net-zero initiative, facility management companies can unlock two major opportunities:
1. Increased Revenue Generation
A facility management firm handling a site/facility which has taken a net-zero target will eventually see an increase in revenue through auxiliary services such as maintenance, project management etc.
2. Strategic Involvement with Clients
Since the Facility management teams have quite a bit of insight on how the facility operates (either asset or occupants behavior) they can suggest ways to reduce the consumption and get into a strategic partnership with clients to help them get there faster, better and in a cost-effective way.
Recently, we all have seen how the tech giants of the world such as Google, Microsoft are making moves into the smart building space. We have also heard the news about CLP, an energy distribution company getting into the building management space. Likewise, there are other unusual competitors entering into building analytics market giving a strong competition to conventional facility management firms.
Leveraging FM Advantages
Facility management companies have inherent advantages that differentiate them from new threats:
1. Intelligent Insights
Umesh highlighted that the facility management companies have the key advantage of having intelligence around the intersection of an asset, data, asset, and maintenance.
FM can leverage those insights for Buildings retrofits, asset optimization, or project management-related tasks by working with the client around the lifecycle of assets to suggest design or process changes.
2. The technology stack:
FM teams can use this opportunity to further build on the existing data accumulation and processing stack. This is crucial to have that asset and facility-level wisdom to get into strategic talks with clients. With more clients committing net-zero targets, FM firms would need to now strengthen their focus on digitalization especially on hard services (something that’s always missed the due credit).
3. Leverage Capital
For the larger facility management companies, this could be a time for acquiring ESCOs having significant insights on building energy management systems or suites of energy services in their portfolio.
To conclude his presentation Umesh, mentioned that to be able to meet the net-zero targets, facility management teams need to maintain the operational performance standards. This means ensuring the improvised facility on energy performance over time, by setting minimum energy intensity benchmarks. Building analytics helps facility managers explore the hidden potential of their data and provide much-needed push towards resource and ultimately operational efficiency.
If you want to know more oh how your FM teams can be benefited from Net Zero initiatives then Schedule a call with Umesh Bhutoria (Founder, CEO Xempla) to learn more about it.