Investors, tenants, and regulators are all driving demand for more sustainable and socially responsible properties. Smart building technologies, such as Priva’s Building Automation and Control Systems (BACS) and digital services, provide a powerful way to address this challenge, while also reducing costs.
The growing importance of ESG for commercial buildings
ESG factors now play a significant role in property valuations due to stricter regulations, changing market expectations, and the need for better risk management. According to the RICS Europe Leaders’ Forum, ESG has become central to long-term property value.
But the commercial property sector faces challenges in meeting ESG goals. The European Commission reports that over 80% of buildings in Europe and the UK will still be in use by 2050, but around 75% of these are energy inefficient. Additionally, a global study by CBRE highlight that over 50% of industry professionals find poor-quality data to be a major barrier to achieving ESG objectives.
However, with the right investments in smart building technologies, property owners can turn ESG real estate compliance into an opportunity to enhance asset value, cut costs, and drive sustainability. Furthermore, this technology provides the accurate data needed to demonstrate compliance and showcase sustainability achievements.
How smart building technology supports ESG Goals
Smart technologies, like Building Automation and Control Systems (BACS) or Building Management Systems (BMS), can be installed in existing buildings at a relatively low cost and bring a range of benefits across all three ESG areas.
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How can Priva help you?To learn more about the role Priva’s solutions play in delivering more energy efficient building operation, and supporting wider corporate ESG and sustainability goals, get in touch with us and discover the possibilities. |
Environmental benefits: Reducing energy use and carbon emissions
Smart building technologies make energy use more efficient, which directly reduces carbon emissions. By using Internet of Things (IoT) sensors and automated controls, these systems adjust heating, ventilation, air conditioning (HVAC), and lighting based on real-time occupancy and usage patterns.
For example, smart technologies can save 20-25% of the energy used by HVAC systems by optimizing performance. These solutions not only cut costs but also reduce a building’s environmental footprint.
Smart technologies also help monitor equipment conditions, enabling predictive maintenance. This means issues can be identified and resolved early, reducing the risk of costly repairs or breakdowns. Efficient maintenance extends the lifespan of HVAC systems and elevators, saving resources and minimizing environmental impact.
Social benefits: Improving tenant comfort and wellbeing
Tenant satisfaction and wellbeing are essential components of ESG in property and are just as much an indicator of a sustainable building as more energy efficient operations.
Smart technologies enhance indoor environments by maintaining ideal temperatures, improving air quality, and optimizing lighting. These features not only promote occupant health and comfort but also boost productivity, making the building a more attractive space for tenants.
Studies reveal that nearly half of tenants are willing to pay a premium for buildings designed to support employee health and wellbeing—demonstrating the value of prioritizing occupants’ needs.
Governance benefits: Meeting regulations and simplifying compliance
As governments tighten regulations, staying compliant is critical. Smart building systems can monitor energy use, track progress toward ESG goals, and generate reports that demonstrate compliance with standards.
For example, the European Union’s updated Energy Performance of Buildings Directive (EPBD) , which came into effect on 28 May 2024, includes upgrades to the regulatory framework designed to drive renovations across member states.
Every member state must gradually introduce Minimum Energy Performance Standards (MEPS) for non-residential buildings to renovate 16% of the worst-performing buildings by 2030 and 26% by 2033. For example:
The UK’s approach also broadly falls in line with the demands of the EPBD. It is currently unlawful to let a commercial property with an EPC rating of F or G. Under a proposed tightening of the country’s Minimum Energy Efficiency Standards (MEES), commercial buildings must achieve an EPC rating of at least Band B by 2030.
Failure to comply could result in fines, loss of tenants, or reduced property value.
Smart building technologies provide real-time data to identify areas for improvement and guide decision-making, making it easier to comply with these regulations and avoid penalties.
