Tomorrow’s Sustainable Buildings Need Today’s Staff To Get Schooled
John Mandyck remembers a career-defining moment when he began working for the Urban Green Council, a New York City-based nonprofit promoting sustainable buildings. The group, which he leads as the CEO, was hosting a class as part of its Green Professions program, which trains engineers and building staff on new technologies and skills. A young man who ran the chiller plant for a building said he had heard about climate change but didn’t quite understand how it worked.
“In the class, you could see this ‘a-ha’ moment when he understood if he turned a dial at the building he was working on to the left, he’d increase carbon emissions, and if he turned it to the right, it would decrease emissions,” Mandyck said. “It was a more powerful moment for me to understand the potential and the opportunity and the power in training and education to help people actually on the ground operating the machinery, understand how doing it better has a bigger consequence for the city and the planet.”
Mandyck’s experience speaks to how the ongoing revolution in sustainable building technologies — better energy efficiency, measuring energy usage and even carbon emissions, and electrifying heat and air conditioning systems — requires increased investment in both technology and education. It’s not a small sector of the economy. The U.S. Department of Energy estimates 2 million Americans already work within the building energy-efficiency sector, but many receive little training before entering the workforce.
“There are a lot of jobs to be created here, but we need new skills to do that,” Mandyck said. President Joe Biden even called out the connection between climate, cutting emissions in building and creating jobs in a recent speech to Congress.
Sophisticated buildings, and more sophisticated building technologies, offer optimized systems, more data, and appear to offer an improved experience for everyone. But there are still legions of property managers, landlords and others who need to be trained and introduced to these new technologies. According to Marta Schantz, senior vice president of the Urban Land Institute Greenprint Center for Building Performance, the technology is advancing so quickly, requiring experience with new sensors, software and interfaces, that it requires extensive training of facility engineers.
“They need to not only be familiar with this tech but need to optimize it,” she said.
There are already quite a few Class-A buildings with contemporary versions of this technology. But as the tech evolves, and a combination of lower costs, tenant demand and decarbonization regulations push so-called cleantech into Class-B and Class-C buildings, it becomes more pressing to focus on upskilling property managers and building staff. Urban Green Council’s Mandyck said it’s a different way of managing your real estate business, and it requires a different method of operations.
It’s also likely to become important as the evaluation of building assets evolves to include environmental performance. The world of ESG — Environmental, Social and Corporate Governance — is increasingly looking for real estate portfolio assets with less climate risk. Buildings with the technology to achieve energy efficiency and evaluate carbon emissions will become more sought-after investments by a growing class of investors.
"We’re at a point where we’re seeing huge players and corporations who are tenants making these huge commitments, and if we don’t have ways of measuring progress, it’s just words and marketing,” said Kate Frucher, managing director of The Clean Fight, a New York City-based tech accelerator for sustainability and clean energy-focused startups. Corporate leaders with clout, such as Larry Fink at Blackrock, have been pushing for more climate disclosures from companies for years.
Piermont Bank CEO and President Wendy Cai-Lee said she’s observed a sharp rise in ESG investing in the past year, and it isn’t just a feel-good thing, you can “generate some real value.”
“We’re starting to see a green premium that’s a very desirable area to invest in, and the brown discount, where assets are either at a climate risk or need more upgrades, making it a riskier investment,” ULI’s Schantz said. “This will absolutely continue to grow.”
Frucher of The Clean Fight said that many tech companies focusing on hardware and software to manage energy usage, among other things, have approached the issue of upgrading buildings with the goal of keeping a facility manager’s life as easy as possible. Startups like Enertiv and 75F feature simple dashboards. Starting with functions like submetering and measuring utility bills, these systems will make it easier to work with more advanced tech that, say, focuses on building carbon emissions.
There are also programs, many at the city level or through trade unions, looking to upgrade the skill set of building staff. The U.S. Department of Energy has a Better Building Initiative, which counts 40 organizations as part of a larger workforce accelerator, while the Building Performance Lab at CUNY, a city college in New York City, offers a free 30-hour training course focused on preventive maintenance and efficiency for apartment operators. The Urban Green Council has trained 3,500 architects and engineers on New York City’s new green building code just since the coronavirus pandemic, and the aforementioned Green Professions program. Mandyck said other cities such as London are also looking for new ways to quickly upskill their building tradespeople.
Real estate investors see the increasingly high-tech building as an asset that can better measure its climate impact, making it a potentially more lucrative asset. Already, the Global Real Estate Sustainability Benchmark, an ESG standard for buildings, has been adopted by more than 1,200 property managers and landlords across the globe, to help investors make decisions based on sustainability factors. Climate change is now putting investments at risk.
“Does this company understand climate change, and are their facilities at risk, are their buildings at risk, is what they’re doing as an operation contributing to climate change,” Mandyck said. “That’s all relatively new, and driving a renewed interest around climate risk and sustainability.”
Sustainable Capital Advisors Managing Director Trenton Allen said that we’re at a place where using technology and data as a means to evaluate pricing and credit will begin to become more widespread. “The sustainability data is used primarily for internal use to make the investment case, to reduce energy costs. But then you’ll see capital markets providing funding for increased energy efficiency. Data, both historical and real time, can help really establish this market.”