Can the sustainability tech boom help decarbonize real estate?

As more businesses invest in sustainability technologies across their real estate portfolio, they’re grappling with the practicalities of integrating them.

One hurdle to the implementation of these technologies is that many businesses lack a concrete roadmap.

“Successfully integrating these technologies into real estate is a challenge faced by companies in every industry,” says Yuehan Wang, Global Research Associate, Real Estate Technology at JLL. “Even large companies may lack a feasible technology strategy that addresses how to make procurement decisions, ensure the tech is correctly used by employees, and scale it across a portfolio.”

The number of companies adopting data science and modelling tools, which are used to analyze occupancy, energy use and financial costs across buildings and locations, for example, jumped by 14% to 40% between 2020 and 2023, JLL’s survey shows. 

Yet a lack of standardized data across smart building systems remains a stumbling block for many businesses.

To extract accurate insights about their real estate’s carbon footprint, companies need to merge information from various systems, from HVAC (heating, ventilation and cooling) to waste management. However, these systems are often siloed, making it difficult to integrate data, while companies may lack the tools or expertise to gather and analyze building data effectively.

“The hardest problem for real estate to overcome is the many data silos that must be integrated for buildings to operate efficiently, especially when some buildings may be 50 or 60 years old with outdated systems,” says Ravichandar.

Companies might make up skillset gaps by increasing collaborations with external partners to deliver on their technology vision, a strategy adopted by over 60% of JLL survey respondents.

However, to drive value from sustainability tech investments, companies need to clarify their objectives and how they will deliver on their targets, says Wang.

“Businesses should define what they need to achieve with sustainability technology, set benchmarks for success, and understand which products on the market are best suited to their operations and goals,” she adds.

Training is also paramount to ensure different teams correctly use and benefit from sustainability tech.

“Sustainability tech has to reach everyone from the boiler room to the boardroom,” says Ravichandar. C-suite executives for example, will focus on net zero progress while landlords may concentrate on tenant satisfaction and facilities teams want more effective day-to-day operations. 

For companies that get it right, there are substantial boons to operating costs and environmental impact.

Using JLL’s AI-powered platform Hank, which dynamically optimizes HVAC systems based on real-time user requirements, a leading UK investment management firm achieved an ROI of 708% and cut energy use by 59% in their 11,600 square meter office building. This reduced carbon emissions by up to 500 metric tons per year.

Another company in financial services ran data analysis to identify energy-saving initiatives, using data visualizations to support clearer reporting and better decision-making. These measures contributed to savings of $664,158 in a single building flagged as having high energy consumption.

A Fortune 500 technology company used  Canopy, JLL’s proprietary sustainability technology and analytics platform, to track, manage and measure sustainability performance across its offices and data centers. It helped the company to identify new energy conservation measures and alternative financial options for capital upgrades, capturing $5.7 million in energy-savings and $2 million in cost avoidance over a three-year period.

Such measures can equally bring additional benefits in areas such as tenant wellbeing.

“Sustainability is not stand-alone. Optimizing a building also positively impacts the employee experience and workforce health and wellbeing, creating opportunities for businesses to align multiple corporate objectives when they invest in sustainability,” says Wang.