Navigant Research Blog

A New Year and Newfound Potential for Data-Rich Buildings

Casey Talon — December 28, 2015

The perfect storm to realize the promise of the intelligent building is upon us. New policies on climate change and stakeholder demands for sustainability that will redefine best-in-class standards for commercial buildings have arrived, and building owners now have an opportunity to invest in intelligent building solutions that can transform their facilities and meet these changing demands. The result is a new set of competitive differentiators wherein dynamic facility operations optimize energy consumption and maximize comfort, along with a new market outlook for Class A commercial buildings in which owners and investors can realize economic benefits alongside stakeholder satisfaction.

Climate Change Pressures

At the end of 2015, the international convention on climate change orchestrated by the United Nations, or COP21, started a new chapter for the intelligent building history books. The Paris Agreement calls on 195 countries and the European Union to execute a global strategy for greenhouse gas (GHG) emissions reductions. So how does this trickle down to the commercial facility, and what does it mean for intelligent buildings? According to the U.S. Environmental Protection Agency (EPA), commercial and industrial buildings contribute about 45% of the total GHG emissions generated in the United States. As a result, energy efficiency represents a tremendous opportunity for climate change mitigation.

Stakeholder Demands

Policymakers, shareholders, activists, and forward leaning corporations are taking the helm in directing transparency on climate risk disclosures. At the end of October, 32 members of Congress sent a letter to the Securities and Exchange Commission (SEC) urging stronger enforcement and commitment to the 2010 SEC release 33-9106, “Commission Guidance Regarding Disclosure Related to Climate Change.” During that same month, 81 companies signed the American Business Act on Climate Pledge to showcase their commitment to climate change mitigation with goals as ambitious as up to 50% emissions reductions. In addition, to link back to the intelligent buildings market specifically, the evolving workforce is increasingly demanding sustainable and technology-driven workspaces. According to the Pew Research Center, 2015 marked a generational tipping point, with Millennials now representing the largest share of the U.S. labor force. This next generation in leadership brings a mind shift in priorities and expectations. Hosts of surveys have highlighted Millennials’ innate reliance on technology for all aspects of their lives and how this translates into expectations in the workplace. These workers also prioritize sustainability when evaluating career opportunities. This combination of a technology and sustainability mindset is expected to drive facilities industry leaders toward investment in intelligent building systems.

Economic Benefits

Economics are still the bottom line, and Navigant Research suggests that investment in advanced sensors, analytics, and services will help transform facilities into intelligent buildings, meet growing stakeholder pressures, and deliver economic benefits. The increased proliferation of the Internet of Things (IoT) is enabling the cost-effective deployment of intelligent building solutions that create a data-rich environment for improving facility operations. In addition, the intelligent building is optimized in terms of energy consumption for significant reductions in GHG emissions; these buildings also provide unprecedented transparency for monitoring sustainability, measuring cost savings, and integrating technology into facility management and the occupant experience.

Want to know more about our expectations for building innovations the coming year? Check out the new Navigant Research report, Intelligent Buildings: 10 Trends to Watch in 2016 and Beyond.

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