Commercial real estate firms (CREs) historically have focused on one goal: filling tenant spaces and ensuring that visitors and customers keep coming back. That means creating a bright, comfortable environment – and paying the costs. But in today’s business environment, commercial real estate is challenged to operate more efficiently and respond to the growing pressures from investors, tenants, regulators and the public to meet sustainability goals and drive down operational costs. That sounds great, right? It is, however, actually implementing a plan is where the challenge begins. But there’s no denying that the rewards are good for your bottom line, your brand and the environment.
What’s Driving Energy Management Today?
There are three primary forces at work encouraging CREs to develop an impactful energy management strategy. First, actually getting insight and data is easier than ever thanks to advancements in building technology and monitoring. CREs can have virtual eyes at every location, 24/7/365, and the data collected can reveal opportunities for improved asset management and maintenance. Secondly, there’s more pressure from investors and stakeholders to demonstrate sound practices on environmental, social and corporate governance (ESG) objectives. Third, tenants are demanding more transparency into costs and fees.
Implementing a sound energy management and sustainability strategy will satisfy these forces and drive impactful savings across the organization. However, CREs are also finding unique challenges to implementation, particularly across different sites. Do you recognize some of these?
- Diverse Property Portfolio: When CREs have a broad portfolio of properties, they are working with different systems, different billing practices across utility geographies, and inconsistent data. This makes it more challenging to gain insights on operational improvements.
- Lack of insight: Without the appropriate analytics tools and dedicated in-house expertise, CREs can be challenged to glean actionable insights from their available bill and facility data, leaving them challenged to develop well-informed strategic plans, monitor performance of initiatives, and communicate impact to investors.
- Stakeholder pressure: Growing investor, real estate owner, and tenant expectations for CREs to meet sustainability goals and drive down operational costs. As a primary international contributor to GHG emissions, CREs face further pressure from environmental organizations and regulatory agencies.
If you’re feeling a little anxious and pressured just reading this, you’re not alone. However, Ecova’s energy management expertise and proprietary cost and consumption data warehouse makes us uniquely positioned to help CREs navigate the complex world of sustainability, helping to reduce risk, increase asset value, and drive operational savings.
- Expense Data Management. Ecova aggregates expense processing and analysis, service management, and budget and accruals across the spectrum of complex payables for your entire enterprise, so you can reduce costs, improve on-time payments, and manage risk.
- Energy Supply Management. With experts in energy market analytics and unparalleled market analytics reporting tools, we can help optimize your energy sourcing strategies to reduce expenses and manage your energy risk profile.
- Advising Services. Ecova works with you to develop a tailored, long-term strategy to help you increase net operating income, increase asset value, and meet sustainability goals.
- Total Waste Solutions. Ecova delivers a comprehensive approach to waste stream management, offering transparency into your rates and services, managing your haulers, and providing tenant waste audits for more accurate tenant billing.
- International Solutions. For properties outside of North America, Ecova can provide visibility to consumption data via one integrated platform, procure energy, report on carbon emissions across the globe and give you unique insight to your portfolio of buildings and benchmark them against each other.
The Bottom-line Impact
Energy is often the single largest operating expense in commercial office buildings, making up nearly 30 percent of typical operating budgets. According to ENERGY STAR®, simply decreasing energy use by 10 percent could lead to a 1.5 percent increase in net operating income.
Ecova has 20+ years of experience consulting clients with large geographically distributed portfolios, delivering $2.1 billion in cost savings since 2013. With our aggregation tools that monitor utility spend and consumption, combined with utilities-market expertise, CREs can plan a more smooth and effective path forward to meet both energy expense and sustainability goals.