Urbanization is the migration of the world’s population from rural areas to urban areas such as cities. People move to cities for a better way of life. Cities offer
employment prospects as well as better access to goods, services, healthcare, and education. Population growth also contributes to urbanization and it’s estimated that >65% of the world’s population will live in an urban environment by 2050. It is predicted that the global building floor space will double by 2060, equivalent to adding an extra New York to the world every month for 40 years.2
Climate change is the change in global or regional climate patterns, in particular a change apparent from the mid to late 20th century onward that’s been attributed
largely to the increased levels of atmospheric carbon dioxide produced by using fossil fuels. The IEA estimates 40% of the world’s carbon dioxide emissions can be attributed to buildings, with 28% of the emissions being contributed by the running and maintenance of the buildings alone.3 The alarming estimate is that 50% of the energy currently used by buildings is wasted.4 The energy consumption and, in turn, CO2 emissions in buildings have barely flattened off in recent years, showing that with more buildings due to come online, the impact of buildings on the environment will only get worse unless energy efficient is improved.
Many influential think tanks such as the United Nations Environment Programme and the World Bank are now focusing on policies for improving energy efficiency in buildings, providing incentives to invest in sustainable and intelligent buildings, and retrofitting old buildings to meet current EU sustainability standards.
The world’s governments bound by their obligations to tackle climate change are starting to implement these suggested policies. The EU as part of their Green Deal policy is now providing funding for a large retrofit program. There are approximately 220 million buildings in the EU, 85% of which were built before 2001 and 90% of existing buildings will still be standing in 2050, providing a large base for retrofitting. The EU aims to retrofit 30 million buildings by 2030. Equally, there’s hope in the U.S. that the Infrastructure Bill and Smart Buildings Acceleration Act and the China 5-year plan will drive similar initiatives in these markets.5
Government policies and building regulations drive energy improvements with the upcoming updates to the Energy Performance of Buildings Directive in the EU. Equally, the ASHRAE standards in the U.S. are driving regulatory compliance, with other country specific regulations also coming online.
It is also becoming more and more common for buildings to have green and intelligent building certification. In some cases, this is a requirement for specific financial investments, but mostly it is understood that these certificates add a significant premium to the building’s earning potential. LEED, BREEAM, and EDGE are all well-known green certificates, but local certification in China is now building pace. Intelligent building certification is newer but with TIA and UL coming together to form SPIRE, this too will become more popular.
Looking at the economics of these potential improvements to buildings creates a premium for healthier, greener, and more intelligent buildings. In London,
research has shown that certified buildings command a 4% premium for rental and sales relative to noncertified buildings in the same area.6
From world events to world economics, the shape of buildings is changing, and the top building automation companies are taking note. We notice that in line
with quarterly revenue reporting, the megatons of CO2 saved for their customers are being reported along with emphasis on greener and healthier buildings. How these building automation companies will achieve this savings is through vast building digitization and digitalization, allowing intelligence all the way to the edge node, gathering more intelligent data, and generating more actionable insights across multiple building systems, allowing the opportunities to fine tune and optimize each buildings’ performance to ensure maximum energy efficiency and maximum sustainability.