Why sustainability without data remains an illusion
Climate change presents us with major global challenges. The building sector plays a central role in this - after all, according to the Federal Office for the Environment, around 28% of total greenhouse gas emissions in Germany are attributable to real estate (in Switzerland the figure is around 26%). Central to the success of future measures is consistent data management and the recognition that digitisation and sustainability go hand in hand.
Sustainability is the order of the day and puts the focus on the impact of our actions on society, the environment and the economy. The three-pillar principle of sustainable development, according to which the three aspects "People, Planet, Profit" are conditional, can also be applied to the construction and property sector. By definition, sustainable real estate generates long-term ecological, social and economic benefits (1). The leverage effect of digitisation is particularly evident when it comes to quantifying the benefits (or damages, depending on the approach) in relation to the spheres mentioned at the beginning: in order to comply with KPIs and target definitions and to derive measures from them, data must be continuously collected, measured and interpreted.
The first problem already arises in the choice of the calculation approach - currently there is no international set of rules when it comes to the exchange of data over the entire property life cycle. The standardisation of data models is therefore likely to occupy the construction and real estate industry in the immediate future and give a further boost to efforts to achieve greater sustainability. The second challenge is the one-dimensional view of sustainability in the building sector that is still prevalent today and is often limited to a few aspects within individual life cycle phases.
In this context, sustainability is to be viewed in a similar way to full cost accounting. If we include only the fixed costs, we obtain a selective statement, but only cover a small part of the whole picture. Sustainability is therefore to be considered as a dimension across all phases of a property's life cycle and must not only be considered in the utilisation phase, but also in the planning and financing, construction and operation, as well as in the utilisation. Accordingly, various aspects, such as embodied carbon, must be taken into account in early planning phases, targets must be set and measured, and consequently design and construction decisions must be based on them. A cross-phase data management ("Life Cycle Data Management" - LCDM) forms the basis for a continuous sustainability management.
Set in context: LCDM
The clear, unambiguous and concrete ordering of data by a building owner over the entire life cycle of a project is still a rarity today. Even if the BIM aspect is ordered correctly, often no one is able to check, process and accept the generated and transferred data. Isolated approaches of BIM to Facility Management (BIM2FM) exist, but even these are not networked with all those involved across phases and projects. Although there are extensive requirements for the structuring of BIM models, these are usually only made from the point of view of the planner or entrepreneur, and only in very few cases from the point of view of the utilisation and operation phase. Life Cycle Data Management, or LCDM for short, fills this gap.
LCDM using the example of greenhouse gas emissions
One of the globally applied impact calculations of sustainable efforts is the quantification of greenhouse gas emissions. LCDM plays a key role here, especially for portfolio owners and managers. It is only by means of clear guidelines and data strategies that it is possible to record each property and, accordingly, the entire portfolio in a uniform manner within the framework of the data relevant to sustainability. Ongoing analysis, interpretation and documentation of this data enables transparent decision-making processes. Only if it is possible to trace step-by-step where which data comes from and in what quality, how they interact, and when and for what reason which decisions were taken, can later measures be geared to this or, in the event of changes, taken into account. This also makes it possible to evaluate measures taken in retrospect and to generate a "learning effect". The appropriate modification of individual properties thus leads to an overall optimisation of the entire portfolio.
Planet: of CO2 benchmarks and energy efficiency paths
For comparison purposes, it is worth taking a quick look across the border first. Within the framework of the Paris Climate Convention, Switzerland has committed itself to halving its greenhouse gas emissions by 2030 compared to 1990 levels and is pursuing the goal of zero greenhouse gas emissions from 2050 onwards. The building sector is responsible for 26% of greenhouse gas emissions, which is in the same range as in Germany (28%). This includes not only direct emissions related to energy consumption, but also the so-called "ecological backpack", i.e. the CO2 emissions that occur throughout the value-added chain of all materials. In order to ensure savings in the building sector, Switzerland is currently discussing binding CO2 benchmarks (CO2 benchmark for energy supply: 20 kg CO2 / m2 for existing buildings from 2023; tightening by 5 kg every 5 years) and is based on the SIA 2040 "Energy Efficiency Paths" of the Swiss Association of Engineers and Architects.
Set in context: SIA 2040
The SIA Energy Efficiency Path is characterised by an overall energy view: In addition to operating energy, its grey energy and location-dependent mobility are also included. Furthermore, target values for greenhouse gas emissions must be specified. These are of central importance due to the impact on the climate and, alongside non-renewable primary energy, form the second assessment variable.
SIA-2040 sets target values for the three building categories residential, office and schools, for new buildings, as well as for conversions and renovations. This makes it possible for the first time to consider the energy performance of buildings over their entire life cycle, which, together with mobility, also includes the urban environment.
The requirements for embodied carbon and operational carbon contained in the standard can be used as a guide for target values. The final report on SIA 2040 "Extension of the building park model according to the SIA Energy Efficiency Path for Buildings" of 2016 explains background assumptions and results in detail. Of particular interest are the greenhouse gas emissions and primary energy consumption for existing buildings, new construction and refurbishments, listed by type of use (e.g. housing or administration), scenarios and time period. They can be used as a basis for comparison for your own portfolio in order to check the CO2 reduction paths of individual properties.
A selection of relevant data in sustainability management along the portfolio & building life cycle
Germany's climate protection plan for 2050 also aims to be largely greenhouse gas neutral by the middle of the century. Separate targets have been set for the building sector, which envisage a reduction in greenhouse gas emissions of around 67 percent by 2030 (2). This reduction is to be achieved through demanding new building standards, long-term renovation strategies and a gradual move away from fossil heating systems. However, no targets were set for existing buildings - and thus for a large proportion of all German buildings.
The current target values and specifications for greenhouse gas emission limits (kg CO2 equivalents/m2/year) are therefore only suitable for property owners to a limited extent - they have not yet been broken down nationwide into individual areas such as transport or the building sector and are therefore difficult to grasp. For this reason, the German Sustainable Building Council (DGNB) has developed a framework for "climate-neutral buildings and locations", which defines rules for the CO2 accounting of buildings and also provides a framework for CO2 reporting of buildings and CO2 management methods as well as a climate protection roadmap.
The strong focus on new buildings supports the demand for LCDM. For new buildings, specifications for certificates, construction methods or materials are sufficient. For the sustainable development and management of existing properties and portfolios, however, the current starting position must be recorded in advance in order to achieve a consistent reduction of the CO2 path via clear control parameters (KPIs).
Profit: take account of the construction method
In order to achieve these goals, concrete greenhouse gas targets must be considered and specified by property owners at the early planning stage of new buildings, so that they do not have to bear increased costs for optimisation measures or possible CO2 compensation at a later date. Particularly while changing regulatory and social demands with regard to sustainability, today's buildings are rightly no longer built for eternity, but for the future.
Probably the most important achievement in the fight against climate change in the building sector in recent years is the recognition that return and sustainability are not mutually exclusive - on the contrary! The consideration of life-cycle costs is of decisive importance for the value retention of real estate. A reliable calculation of the consequential costs of investment decisions as early as the planning phase is crucial for the later market value, especially considering that operating and maintenance costs over the entire life of a building can account for up to 40% in a static calculation (3). Energy costs normally account for up to 25%!
Energy cost factors over the entire life cycle of a property
The level of operating costs and greenhouse gas emissions is influenced by various construction-specific factors such as the year of construction, the building fabric, the materials used and the proportion of renewable energy sources. However, the architecture, the standard of fit-out and the degree of technology of a property also play a role. In addition to construction parameters, legal regulations such as CO2 benchmarks or tax levies also influence the level of operating costs.
While operating costs can be precisely calculated and benchmarked thanks to comprehensive data pools and existing data standards with regard to cost structure (e.g. DIN18960, ICMS standard from RICS), the calculation of greenhouse gas emissions is much more complex. A BIM model containing a Bill of Materials is necessary for the effective calculation. The BIM model also provides information on areas and construction methods and, in later phases of the building life cycle, detailed information on layer structures. These data enable an automated energy calculation, which in turn serves as a basis for estimating the greenhouse gas emissions of the company.
In the utilisation phase, targeted energy management and annual monitoring are the key to sustainable success. Consumption data must be measured regularly, compared with the values targeted in the planning phase and optimised accordingly. During this, the greenhouse gas emissions of the energy supply are calculated and reported. As a positive side-effect, annual monitoring can also identify other necessary measures that, for example, support operation or advance maintenance planning. Typical approaches to reducing energy costs include the use of simple, energy-efficient technologies (heat pumps, PV, ventilation systems), good thermal insulation and compact construction. This often more than compensates for higher investments in planning and construction.
Share of pure energy costs in the operating costs without taking into account the rental electricity
In the future, energy consumption in the use phase of new buildings is likely to become more and more marginal, while local energy production and the issue of "grey energy" will become more important. Energy costs will decrease and, in the case of plus-energy buildings, even reverse into income from the provision of locally produced energy.
Set in context: Grey energy
Due to the decreasing energy consumption in the use phase of buildings, the importance of building materials and their energetic and environmental consequences is increasing. In the case of grey energy, all the energetic expenditure of the product is added up, from the extraction of the raw materials, through repair, to disposal at the end of its life. In buildings with low energy consumption in the use phase, the grey energy of the materials (construction) represents an increasingly large proportion.
Ongoing data collection and the resulting optimisations enable the creation of a property-specific CO2 reduction path that takes into account the potential and challenges associated with, among other things, the rental location. The results are thus incorporated into a comprehensive property valuation, allowing portfolio-specific CO2 benchmarks to be derived and costs to be forecast. However, this is still a dream of the future. The real estate sector is only in the early stages of efficient, comprehensive data management. The immense wealth of data required for sustainable portfolio management and its distribution in various systems is making progress increasingly complicated. The next steps must therefore be to implement a superordinate data standard and to implement it uniformly throughout the IT system landscape in order to consolidate all relevant data and to be able to evaluate it in favour of a holistic view over the life cycle.
People: Measures to improve tenant satisfaction and sustainability
The reduction of greenhouse gas emissions during the use phase of a property is probably the most important aspect in the social perception. In the residential sector, sustainability is mostly understood as a side effect of cost savings. The focus is therefore more on personal comfort and less on CO2 reduction. In the commercial sector, sustainability has a different significance, which has been formed in particular by social pressure. Most companies establish sustainability strategies and measures at least partly for image reasons and publicly represent a "green philosophy".
A profitable, environmentally friendly building places its users at the centre of any optimisation measures. Regular communication between property owners, property managers and tenants has many advantages: it often increases tenant loyalty, defects can be detected or even anticipated at an early stage, and the building can be aligned with tenants' needs in the long term. Tenant satisfaction surveys are a popular means of communication. Often five topics emerge which can be directly linked to sustainable measures using LCDM.
The top 5 topics in tenant surveys
Rental price and additional costs: Lack of transparency is considered to be a frequent reason for the dissatisfaction of many tenants, and not only with regard to the billing of service charges. Only very few building users are aware of the efforts that property owners are making to reduce CO2 emissions. The resulting costs often lead to misunderstanding or lack of understanding on the part of tenants.
<spa>LCDM creates transparency through standardisation. By consistently reporting and documenting individual cost factors across all properties, ancillary costs can be determined in a differentiated manner and clearly described. Measures that lead to a reduction in ancillary costs can be shown and measured in concrete terms, and the benefits are equally beneficial to the tenant and the property owner. Changes in consumption data can also be compared with each other and thus be used as evidence for rent adjustments.
Parking and e-mobility: The German Future Institute (Zukunftsinstitut) saw electric cars as energy storage devices as early as 2012 and declared "Vehicle-to-Grid" as the new magic formula (4). Today, e-mobility is playing an increasingly important role in the building sector, especially in the context of plus-energy houses. The EU is also promoting the recharging of vehicles in buildings by introducing a new target for energy and building efficiency in all larger buildings from 2025 onwards, with charging stations for electric cars (5).
LCDM measures the energy consumption caused by charging stations and can ensure that the right person or company pays for electricity in communal garages. Dashboards could also be used to show which cars are already charged and where there are free charging stations. This will support the car sharing approach, which will lead to less emissions, less noise and less traffic.
Facility Management: We live in a culture of choice. Individualisation is the basis of the western social structure and therefore touches us in almost all aspects of life. Surprisingly, the construction and real estate industry is one of the few sectors that is still very much oriented towards collective patterns, especially when it comes to building operations. For example, energy costs in many residential properties are charged to all parties in equal shares regardless of individual consumption, or cleaning in office buildings is not carried out according to demand but according to a fixed duty roster.
LCDM promotes customisation by quantifying individual needs or special incidents. For example, service charges can be individually billed according to the consumer principle by clearly allocating the expenses, and the mapping of visitor flows in commercial properties enables cleaning to be carried out as required at high frequency points such as a customer zone or after events.
Acoustic comfort: Nobody wants to have their favourite Sunday evening TV-show spoiled by the neighbors’ arguing, or to have to involuntarily attend the top floor colleagues’ Christmas party whilst working three floors down in front of their own screen. No wonder that efficient noise insulation is a prerequisite for the comfort level of most tenants.
LCDM allows comparisons of variants between planned and achieved data, thus allowing landlords to calculate the effect of measures. In this way, optimisation and refurbishment measures can be matched with the results of tenant surveys to check the extent to which acoustics have improved. Portfolio owners are also able to include specifications of the respective property such as usage and environmental data. Finally, residential buildings require different sound and noise insulation than, for example, warehouses.
Thermal comfort: Anyone who has ever attended a large workshop in a meeting room knows how important efficient ventilation and a room climate that is adapted to the needs of the participants is. The personal comfort level of building users is largely dependent on the building technology. The more possibilities there are for individualisation, the more comfortable we feel in the office or in our home and the wider the possibilities for promoting sustainable behaviour.
LCDM recognises patterns that arise from building use and creates the basis for property owners to make pro-active adjustments necessary for the operation or the building. For example, if a meeting room for 15 people is booked on a summer day at 32 degrees, the room can be cooled down half an hour before the meeting. This in turn prevents meeting participants from opening the windows to "ventilate" before the meeting begins.
While other sectors of the economy, such as the consumer goods industry, regard the data from opinion polls as holy grail, the construction and real estate industry still all too often fails to recognise their significance. Apart from the fact that dissatisfied tenants will lead to vacancies in the foreseeable future, a targeted needs survey enables the development of new services or even business areas. For example, laundry services have been and are being introduced, co-working spaces and temporary rentable office space have been created or fitness rooms used collectively have been established. Such amenities increase tenant loyalty and help to avoid costly tenant changes or even lead to higher rental income in some cases.
The importance of the data that other industries attach to the construction and real estate industry is often repeated like a prayer wheel in the construction and real estate industry, but is still hardly ever lived. Yet it has long been undisputed: Data is replacing oil as a resource of the highest relevance for the environment, economy and society! The collection of data is only the first step in a long process chain that begins with the initiation of construction projects and covers the entire life cycle of a building. Only the stringent, standardised management of data enables a targeted, regular analysis and the implementation of appropriate options for action. It is up to all of us to stop climate change - LCDM offers investors and portfolio managers in particular an excellent opportunity to make an effective contribution themselves.
Rebekka Ruppel is a graduate civil engineer, MSc. ETH, and managing director of pom+Deutschland GmbH, the German subsidiary of the leading Swiss consulting firm in the field of real estate and infrastructure. In her special field "Digitisation of the Real Estate Industry" she conducts trend and technology scouting and supports numerous companies in the development and implementation of digitisation strategies, new business models and operating models.
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(3) Mulle, R., Salzmann, S. (2020): Der Bauweise Rechnung getragen. fmpro service, 01/2020. www.pom.ch/de/knowledge-pool/
(4) Rat für Formgebung/German Design Council, Zukunftsinstitut GmbH (2012): Design E-Mobility. Trend-Dossier zum Kontext Design und Elektromobilität. Frankfurt. www.zukunftsinstitut.de/artikel/e-mobility-mischt-den-markt-auf/
Welke, Mareike; Weiß, Martin; Tibbe, Till (2018): Klimaschutz in Zahlen. Fakten, Trends und Impulse deutscher Klimapolitik. Ausgabe 2018.
Bundesministerium für Umwelt, Naturschutz und nukleare Sicherheit (BMU), Berlin, www.bmu.de.