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Thinking about the climate emergency and sustainability can be overwhelming. The problem is so huge, the stakes are so high and the solutions can seem so complex, it is much easier to just not think about it.
Deciding how to tackle the problem and improve the sustainability performance of a business can be even more difficult for small or midsized property owners or advisory firms. Big firms, under pressure from shareholders or institutional investors, have the balance sheet to build up sustainability teams and sophisticated strategies. Smaller firms often don’t have that luxury or that direct external motivation.
So at Bisnow we wanted to try to think a little smaller in our reporting. We realised that long, deep dives into the issues surrounding climate change and articles on the actions of large investors are great. But we wanted to provide practical advice on simple and cost-effective things that any property company can roll out to improve the carbon emissions from its assets, or those of its clients. This fortnightly series, One Small Thing You Can Do To Save The Planet, is our attempt at doing that.
First up, we have something you may have already done in your home, but which is equally applicable to commercial property: switching to a green energy provider or tariff.
Switching to 100% renewable energy can reduce the scope two carbon emissions of a building by as much as 70%, according to Knight Frank, as long as the energy provider is accredited and can prove that the energy is 100% renewable. Scope two emissions are those generated by the electricity used by a building.
Switching energy providers or tariffs is something smaller asset owners often overlook because of that central element of human psychology: inertia. When energy contracts come due, smaller owners are less likely than large companies to put a new contract out to tender.
“Smaller owners are much less likely to ask the right questions and just tick the box to renew,” Knight Frank Head of Energy and Sustainability David Goatman said. “But it can be a cost-saving initiative as well as a sustainability strategy.”
Goatman said the premium charged by energy suppliers for 100% renewable energy is at a historic low, so green energy does not cost much more than “brown”.
And switching tariffs or providers at the end of a contract rather than just renewing can provide savings of up to 45%. What's more, now is a good time to switch, given global energy prices are at recent historic lows.
How does a commercial property owner put a contract out to tender? The best way is to go through an energy broker, Goatman said, although he offered a word of warning: Energy brokerage is unregulated, and owners should seek quotes from more than one broker to compare the fees being charged and make sure they are not being stung. But reputable brokers do exist, and can help owners switch to green energy sources and save money at the same time.
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