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How BTR Owners Are Using ‘Nudge’ Psychology To Help Residents Cut Carbon Emissions

Developers and landlords are making strides toward high carbon efficiency as they try to hit net-zero targets and play their part in beating the climate crisis. But there is an important element that is difficult to control: their tenants. 

Net-zero refers to the goal for buildings and companies to lower greenhouse gas emissions down until there is a balance between what they release and what they remove from the atmosphere. When it comes to the carbon emitted by a building, the way tenants use a property is critical — Canary Wharf Group estimates that about 30% of its emissions come from the space tenants control, compared to just 5% from the space it controls directly. 

And when it comes to build-to-rent or multifamily, things get even trickier. In an office block or logistics scheme, you might have to work with just one or two big tenants to help them reduce their carbon output. In many residential schemes you are talking about dozens if not hundreds of individual human beings, some of whom will be very interested in sustainability, some of whom won’t.

Greystar is encouraging awareness about sustainability through programmes like herb growing for residents.

So as a developer or owner, how do you encourage people to take an interest in and actively reduce their carbon output? Some of the biggest names in the sector have been turning to the world of behavioural psychology and looking at ways to “nudge” residents. That entails making the sustainable choice the easy choice and making cutting emissions sociable and fun. 

Legal & General Head of Build To Rent Dan Batterton and Greystar Managing Director Michela Hancock gave Bisnow an insight into how they are helping tenants help the planet. 

Make It Fun

A lot of people naturally respond well to competition, and there are elements of sustainability that can be “gamefied” to encourage BTR tenants to be more green.

“We facilitated a competition against fellow residents, the staff in their community and other L&G communities to see who could reduce their environmental footprint the most,” Batterton said of one L&G strategy.

LGIM Real Assets Fund Manager Dan Batterton

Make It Sociable

One of the selling points of BTR or multifamily schemes is the social aspect, and many large schemes run an events programme for residents to allow people to engage with their community. This can be harnessed when it comes to reducing emissions too.

“We’ve been holding resident events focused on sustainable cooking, where they grow their own herbs in their apartments,” Hancock said.

L&G is planning on making sustainability sociable by holding a fair at each of its schemes with food, drink, music and stalls by local sustainable businesses such as sustainable cosmetics, food and drink brands.

Make It Easy

One of the big findings of behavioural psychologists like Richard Thaler and Cass Sunstein is that people almost always take the easiest option when faced with a choice, and if you want to encourage someone to do something, make it the default setting.

“We’ve tried to make it easy, by suggesting small achievable steps and tweaks to lifestyle that can make a big difference,” Batterton said.

He said L&G is helping and encouraging residents to plan meals to create less food waste, clear their email inbox and unsubscribe to junk mail to reduce server requirements, switch to a carbon-neutral internet search engine called Ecosia that plants trees with ad revenue, use refills for cleaning products, and reduce landfill by creating a resident “swap shop” and make recycling simple and easy, something that is also high on the agenda for Greystar.

Make It Digital 

The demographic that rents a BTR property, certainly in the UK, skews young and metropolitan. People in this cohort live big parts of their lives in the digital realm, and so nudging them to cut carbon emissions needs to reflect this. Greystar is using paperless documents, signatures and communications as a default to cut down on waste paper. L&G is partnering with online environmental footprint calculator Giki Zero to help residents measure their emissions — research into changing behaviour shows that quantifying something like energy use plays a major part in helping people to reduce it. 

Nuveen's Mike Sales, Greystar's Michela Hancock and Maples Teesdale's Dellah Gilbert

Focus On Travel

It is not just carbon emissions when residents are in a scheme that can be influenced by BTR owners, but those created by journeys to and from home as well. Both L&G and Greystar offer discounted membership to car clubs in order to offer residents access to a car without the need to own their own vehicle. Batterton said that L&G is cutting down on the number of car parking spaces for residents at schemes to further nudge them away from car ownership. 

Show The Benefits

“We are trying to link [cutting carbon] to cost savings for the resident by weaving sustainability into the residents’ guide with tips, for example, on how to run your apartment more cheaply and therefore use less energy,” Batterton said.

One of behavioural psychology’s big findings is that human beings are not rational animals. But it also shows that we do respond to incentives when they are clear and easy to understand — for example, if you use less energy, you’ll pay less money. 

Be The Change You Want To See In The World

Both L&G and Greystar have wide-ranging corporate carbon-reduction policies, and for Batterton, demonstrating the company’s own commitment can encourage residents to increase their efforts.

“We’ve made our commitment and actions to sustainability easy to see, for example on schemes where we have solar panels, there is an energy generation tracker by the lifts, to show residents how much renewable energy has been generated,” he said. 

Bisnow is hosting a webinar on BTR design on Wednesday 19 May. It's FREE so you should sign up here.