Author: abrahamwien18

ESG and Its Impact on the Real Estate Industry

By: Amy Menist
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Environmental, social and corporate governance (“ESG”) practices are becoming an increasingly significant topic for businesses and a vital investment criterion for real estate capital sources. Increases in the frequency and intensity of severe-weather-related events are forcing companies to assess property vulnerability and resiliency to proactively manage risk and mitigate the effects of climate change. A company’s corporate social responsibility is just as important because it draws attention to community outreach and talent development. Furthermore, with proper governance in place, management can implement and assess its policies, goals and reporting efforts for their ESG initiatives. Due to these compounding matters, real estate companies now have an increasing responsibility to perform climate-risk due diligence; assess its corporate social responsibility initiatives; and develop, implement and govern its ESG policies. As a result, investors and lenders are beginning to factor a company’s ESG policies into their decision-making processes because they want to ensure the business is developing sustainable plans to combat the effects of climate change; reduce costs; attract tenants; create ways to support the community; retain talent; and properly set, monitor and report on the company’s goals. What exactly is ESG, and how does it influence investor and lender decisions within the real estate sector?

Environment

The environmental aspect of ESG represents management’s responsibility to assess each property’s vulnerabilities, resilience and fortification with respect to its climate and to investigate the environmental impact of operating its properties. While reviewing or developing a building portfolio, it is crucial for management to perform an environmental analysis of each property to determine each building’s vulnerability and/or resistance to severe weather (e.g., hurricanes, flooding, extreme heat or cold, wildfires, tornadoes, blizzards) as well as to consider the environmental and community impacts associated with property development.

Using a variety of tools, management can establish and track key environmental factors associated with property development and operations, including the amount of energy used, the usage and/or possible contamination of water, the amount of waste generated and/or avoided in favor of recycling initiatives, and the building’s impact on air quality and the surrounding ecosystem. By evaluating a property’s environmental impacts, companies can be proactive about mitigating risk and assuring proper protocols are in place—not to mention saving money.

Management also should consider weather forecast predictions and climate migration trends in its analysis because climate change poses both physical and transitional risks that can have a substantial financial impact on a real estate business. As outlined in “Climate Risk and Real Estate Investment Decision-Making,” an article published by Urban Land Institute, “Physical risks, such as catastrophes, can lead to increased insurance premiums, higher capital expenditure and operational costs, and a decrease in the liquidity and value of buildings. Transitional risks—which center on the economic, political and societal responses to climate change—can see locations and even entire metropolitan areas become less appealing because of climate-change-related events, leading to the potential for individual assets to become obsolete.” Accordingly, climate migration presents a legitimate concern to real estate investors because climate relocation will lead to significant shifts in demand for real estate as individuals respond to environmental changes.

ESG initiatives are gaining significant attention among regulators and the Biden administration due to a rise in the necessity of, and public interest in, sustainability. In January 2022, the Biden administration launched a coalition of states and local governments to strengthen building performance standards. This partnership, consisting of 33 state and local governments, focuses on providing “cleaner, healthier and more affordable buildings.” The new commitments to design and implement more efficient building performance standards are intended to “accelerate progress toward reducing buildings emissions, advance climate action and environmental justice, create good-paying union jobs, lower energy bills for consumers, keep residents and workers safe from harmful pollution, and cut emissions from the building sector.” Property owners and operators must closely follow the developments of these governmental policies to stay current with their ESG initiatives.

Additionally, as part of the government’s initiative to strengthen building performance standards, the Department of Energy (“DOE”) and the Environmental Protection Agency (“EPA”) announced technical assistance opportunities to design, measure and manage local building-performance policies. For example, the “Biden-⁠Harris Administration Launches Coalition of States and Local Governments to Strengthen Building Performance Standards Whitehouse Statement” outlines the following:

  • The DOE will share best practices for state and local governments that are adopting building performance standards, including public- and private-sector financing options, and will also provide analytical support to examine how policies targeting emissions reductions in existing buildings can pave the way for minimum new-construction building energy codes.
  • There will be enhanced support from the EPA Climate Protection Partnerships Division. The EPA will support policy development and implementation, including through analysis and recommendations of metrics and best practice toolkits. The EPA will provide insight into current building energy use data as the foundation for jurisdiction-specific analysis and target setting and will enhance ENERGY STAR Portfolio Manager to provide new policy tracking and reporting capability and will assist jurisdictions in its use. The EPA will also provide new tools that calculate localized greenhouse gas emissions to inform reporting, compliance and assessment.

High-performing buildings are not only good for the environment, but they are also good for the bottom line. Although capital is needed to build or retro fit such properties, companies that invest in ESG initiatives often see a quick return because high-performing buildings attract higher occupancy rates, thereby generating more revenue and decreasing the amount spent on utilities, insurance premiums and repairs due to severe-weather-related events. Additionally, there are incentives available at both the federal and state levels that are issued to businesses to help make the initial investment more attractive. Businesses today should assess their building portfolios, evaluate their alignment with industry benchmarks and leading practices, evaluate future trends and possible policy changes, and identify gaps and opportunities. With a thorough understanding of the company’s current position, its plans and stakeholders’ expectations, management can prioritize goals and set efficient ESG targets.

Businesses can develop appropriate strategic ESG plans by using climate risk scorecards, performing property vulnerability and resilience assessments, mapping physical risk, and evaluating benchmarks established by organizations such as the Sustainability Accounting Standards Board, Global ESG Benchmark for Real Assets or ISO 14001, as well as state and local governmental regulations.

Social

Strong ESG policies and procedures can help build trust, attract and retain employees and tenants, and prevent costly mishaps while meeting community needs. Social initiatives, which are often assessed at the partnership and overall company level, represent the company’s corporate social responsibility. Today, the need for companies to evaluate their social actions is great because employees are demanding ESG services and better working conditions. These include demands for ensuring diversity, equity and inclusion throughout the business and governing board; developing ways to attract, retain and promote employees; and implementing an effective code of conduct. Additionally, businesses could further enhance their social responsibility by ensuring all employees have a safe and clean work environment, requiring all vendors and contractors to follow the company’s code of conduct, hiring contractors and vendors whose social responsibility is in line with their own social efforts, and assigning an internal resource dedicated to the ESG initiatives. Businesses today excel from the use of strong social responsibility practices because they incorporate diversity and inclusion, recruitment, talent development and mentorship programs, health and wellness, and create a conducive work environment for everyone throughout the company.

Tenants today are also considering companies’ ESG initiatives as a deciding factor for their tenancy because they want to rent high-performing spaces from a socially responsible company with strong ESG policies. Therefore, it is imperative that management evaluates its social responsibility with respect to the surrounding community. This could include a company publicly displaying its ESG policies, promoting its progress in sustainability efforts, and asking its tenants for feedback. Furthermore, tenants want affordable and accessible space, quality access to/from the property, and equal access to features and amenities within the community including good schools and shopping centers. By management taking into consideration tenants’ desires and opinions, it will help the business improve tenant attraction and retention and, thus, generate more rental income.

Governance

ESG is metrics-based with documented evidence. Consequently, it’s necessary that there are strong governing practices in place to help the company report and oversee its business performance, track progress, and strengthen data management and analytics. Management has a responsibility to implement the ESG policies and procedures as well as maintain and evaluate its progress and standards. Therefore, governing practices need to be in place to enable the company to perform due diligence and collect data and documentation to further improve planning efforts. Investors and lenders expect companies to track their environmental and sustainability metrics at the asset level and provide transparent reports that support the process for making meaningful and effective ESG plans. Through use of effective governing practices, management can perform decisive analytics, track progress, and create accurate and transparent reports on its corporate social responsibility and ESG efforts that showcase sustainability evidence to attract investors, lenders and tenants.

Companies often struggle with collecting data to support their ESG plans. However, data is in high demand because it enables companies to understand where change or innovation is needed. There are a variety of software and tools available that can help management efficiently document, track and assess its ESG progress. New emerging property technology (“proptech”) and proptech companies are designed to help streamline the gathering of data and aid in auditing and reporting for real estate. Using proptech, companies can review real-time data on energy usage, determine if environmental and sustainability opportunities exist, and quantify and standardize resource consumption to maintain safer and more valuable real estate. Through use of proper and effective governing practices, companies will develop a more efficient work environment backed by strong and accurate data, thus fostering a greater likelihood they will successfully achieve their ESG initiatives.

ESG and Investors

ESG is shaping and influencing real estate valuation and, therefore, gaining in importance among capital providers. Investors today use a variety of tools to determine future opportunities, and ESG policies are getting higher on their due diligence checklists. Although not a deciding factor, a business’s ESG plans can significantly impact an investor’s decisions. Through developments in technology and an increased transparency in reporting, investors now have more insight and want to know that businesses are forward looking and have sustainable business practices in place. By assessing a business’s ESG plans, investors can assess the risk versus the rewards as well as potential growth areas. Additionally, investors often believe the more proactive a company is with its ESG initiatives, the more attentive and responsive the company will be in mitigating risks. Accordingly, a strong ESG policy adds value to the investment because it attracts tenants, reduces operating costs and increases capital demand.

Debt and equity capital providers are incorporating the analysis of ESG and climate risk in their transaction due diligence. Recent floods, fires and extreme heat are forcing tenants (and their insurers) to assess property vulnerabilities. As confirmed in EisnerAmper’s article, “Commercial Real Estate 2022 Outlook: Fixing the Horizon to Navigate Through Change,” real estate companies should consider:

  • Hodes Weill’s 2021 Institutional Real Estate Allocations Monitor indicates that 49% of investors globally consider the ESG policies of the investee.
  • ULI’s 2022 Emerging Trends in Real Estate indicates that 82% of survey respondents consider ESG elements when making operational or investment decisions.
  • A recent report by JLL showed that office tenants are considering an owner’s ESG activities when selecting space, focusing particularly on building sustainability and efforts to create a healthy work environment, including quality air flow.
  • A Cushman & Wakefield study found that sellers are achieving 25% higher prices per square foot in Class A LEED-certified office buildings and 77% higher prices in Class B LEED-certified office buildings versus non-certified buildings.

Real estate companies and their management must develop a plan for prioritizing the implementation of ESG policies and initiatives because capital providers look for climate data and disclosures as well as resiliency, proactiveness and a property’s ability to attract tenants. Furthermore, as governmental policies are being implemented and net zero targets are set for 2050, capital providers need to know real estate companies are forward looking and performing due diligence to assess the impact of net zero goals on its assets to achieve new ESG standards. As a result of a growing trend and strong push for a decrease in the carbon footprint worldwide, there is an increase in investor demand for ESG policies that will significantly impact their decision-making process.

Most businesses today are looking to limit their impact on the environment by following real estate trends, moving away from fossil fuels, using renewable energy and developing net-carbon-zero real estate efforts. For property developers, this formidable endeavor includes management mapping out the ideal location using weather forecast predictions and climate migration trends, while also developing properties with the lowest emissions level possible and then offsetting the emissions created by finding ways to reduce and/or reuse waste and utilize renewable energy sources. Resilience is the key because it generates value. The initial investment will be repaid after these companies attract tenants and capital on the revenue side and reduce operating costs.

The need for socially responsible business practices will continue to grow because there are strong demand indicators for ESG and sustainability services. This, it is imperative that real estate companies continue to be forward looking and implement ESG initiatives to protect their assets. Effective ESG policies are directly correlated with stronger financial performance and better risk management because they provide companies the opportunity to mitigate risks and appease investors. Creating sustainable business practices, while preparing for implementation of future regulations, will help companies be environmentally conscious and socially responsible in conducting their day-to-day business, while simultaneously aide them in mitigating risks associated with climate change, improving relationships with investors and increasing overall long-term financial performance.

Urban future with a purpose

12 trends shaping human living

2020 was a critical year for cities and communities. The pandemic affected the core of our urban living, and local governments needed to react quickly to protect people’s lives and simultaneously look for the best approaches to handle the long-term effects of COVID-19.
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At the intersection of both these challenges, one topic stands out: the importance of making cities more human and nurturing a strong sense of connection, shedding light on what cities should care about the most – people.

This is the motto of this study and the underlying idea in the 12 trends we present. Committed to helping cities drive change, we have listened to prominent actors in order to understand what we might expect to happen next. Researchers, practitioners, policymakers and city leaders are just some of the people we interviewed, and their insights helped identify 12 trends that cities, leveraging technology and data, can follow on the road to becoming smarter, more sustainable and resilient.

The 12 trends are not equally applicable or desirable for all cities. They cover most of the domains of a city and touch on the main changes emerging from the pandemic. However, we do not suggest that all these trends form a recipe for every city – after all, there is no one-size-fits-all approach to city development. 

These are the 12 trends we have identified:

GREEN PLANNING OF PUBLIC SPACES: Cities are being planned and designed for people, with ‘green’ streets, new corridors and public spaces as centers of social life.

SMART HEALTH COMMUNITIES: Cities develop health care ecosystems that are focused not only on diagnosing and treating sickness, but also on supporting well-being through early intervention and prevention, while leveraging digital technologies.

15-MINUTE CITY: Cities are being designed in a way that amenities and most services are within a 15-minute walking or cycling distance, creating a new neighbourhood approach.

MOBILITY: INTELLIGENT, SUSTAINABLE AND AS-A-SERVICE: Cities work towards offering digital, clean, intelligent, autonomous and intermodal mobility, with more walking and cycling spaces, where transport is commonly provided as a service.

INCLUSIVE SERVICES AND PLANNING: Cities evolve to have inclusive services and approaches, fighting inequalities by providing access to housing and infrastructure, equal rights and participation, as well as jobs and opportunities.

DIGITAL INNOVATION ECOSYSTEM: Cities attract talent, enable creativity and encourage disruptive thinking, developing themselves through an innovation model approach and a combination of physical and digital elements.

CIRCULAR ECONOMY AND PRODUCING LOCALLY: Cities adopt circular models based on a healthy circulation of resources, and on principles of sharing, reusing and restoration, with an emphasis on limiting municipal waste volumes and on producing locally – for instance, by urban farming.

SMART AND SUSTAINABLE BUILDINGS AND INFRASTRUCTURE: Cities aim to have regenerated buildings; they leverage data to optimise energy consumption and the use and management of resources in buildings and utilities: waste, water and energy.

MASS PARTICIPATION: Cities evolve to be human-centered and designed by and for their citizens, promoting mass participation by the ecosystem in a collaborative process and following open government policies.

CITY OPERATIONS THROUGH AI: Cities adopt automated processes and operations (orchestrated by a city platform) and are following data-driven planning approaches.

CYBERSECURITY AND PRIVACY AWARENESS: Cities strive to promote awareness of the importance of data privacy and preparedness for the impact of cyberattacks since data will be an important city commodity.

SURVEILLANCE AND PREDICTIVE POLICING THROUGH AI: Cities are leveraging artificial intelligence (AI) to ensure safety and security for their citizens while safeguarding the privacy and fundamental human rights.

Trend 1: GREEN PLANNING OF PUBLIC SPACES

Cities need to be planned and designed for people, with ‘green’ streets, new corridors and public spaces as centers of social life.

Urban areas are traditionally characterized by high population density and heavy construction to support modern amenities, such as transport and commercial buildings. They now face increasing pressure from expanding populations, limited resources and the growing impact of climate change. One of the indicators for measuring SDG 11 is the area of public and green space in a city, as the lack of natural space creates an unhealthy urban living environment.

Cities should be driving a decarbonization agenda. Becoming low carbon is the first step towards mitigating carbon emissions and achieving ecosystem resilience. At the same time, cities should ensure that urban planning is capable of dealing with the pressures of climate change in the adaptation agenda.

Green public spaces entail:

  • a large number of trees in cities (Singapore ranks first in the Green View Index from MIT’s Senseable City Lab, which measures the canopy cover in cities);
  • creation of more and larger public parks and nature-based solutions in the urban environment, fostering a closer connection to nature even in cities with high population density;
  • more walking and cycling facilities instead of car-centric designs and parking areas, with space for children and adults to enjoy outdoor activities, and fostering a sense of security and safety (according to a study by C40, investing in a shift to mass transit and developing walking and cycling corridors can reduce carbon emissions in cities by 5-15 per cent.).

Cities around the world are recognizing the benefits of a green approach to urban planning, as it has the potential to lower urban temperatures, mitigate air pollution and build natural environmental resilience. World Economic Forum’s Global Agenda Council on the Future of Cities has included increasing green canopy cover in its top ten list of urban planning initiatives.

How to ensure successful implementation

  • Understand sustainability drivers and societal targets.
  • Promote equal, fair and integrated urban planning.
  • Do not underestimate the power of community engagement.
  • Ensure funding and financing.

Trend 2: SMART HEALTH COMMUNITIES IN THE CITIES

Cities are developing health care ecosystems that are not only focused on diagnosing and treating sickness but also on supporting well-being through early intervention and prevention, leveraging digital technologies.

The health crisis during the pandemic made the case clear: there is a community role in creating a better health environment, and cities need to pay more attention to the well-being of their citizens. Globally, five of the top ten causes of death are related to unhealthy behavior. This brings into the spotlight the need for preventive medicine. The factors that affect a person’s health and behavior are complex; therefore communities (physical and virtual) must play a part. 

Cities will develop health care ecosystems that move away from a focus purely on diagnosing and treating sickness and injuries to one that is equally focused on supporting well-being through early intervention and prevention. Instead of being designed and funded to treat individual patients one by one, they will have a greater appreciation of the interconnectedness of communities. The social determinants of health will be better understood, and government and the private sector will collaborate to address some of these challenges.

As care moves outside of the hospital walls new community players and disruptors will become critical in forming the new ecosystem. Scientific advancements and the affordability of personalized health care (genomics, micromics, metabolism and behavioral economics) will ensure that care is tailored for individuals and their families. The citizens’ health journey will be underpinned by interoperable data and analytics guiding them through positive health choices and behaviors.

Cities have a responsibility to create a healthy environment. Smart Health Communities (SHCs) engage patients, companies and public entities to deliver digital health services, in order to develop and shape communities, reducing costs dramatically, improving wellness and longevity, and promoting economic growth. Governments act as enablers of change by promoting this interconnected health care ecosystem. A city, as a geographical SHC, can drive a shift towards preventive and curative therapies, as well as provide solutions that foster collective and cooperative healthy behavior, and generate and analyze interoperable data to predict risks and evaluate impact. While privacy is a concern, investment in smart public health initiatives generates substantial return on investment for cities while improving public health and well-being.

How to ensure successful implementation

  • Work to generate trust.
  • Invest in a data privacy and security infrastructure.
  • Establish partnerships between public and private stakeholders, namely government agencies, technology companies, health care and life sciences players, the media, NPOs/NGOs, social care entities and citizens.
  • Collaborate with technology companies to launch awareness-creation programs and knowledge-sharing platforms.
  • Establish community-driven funding hubs to strengthen the reach and support capabilities and operational efficiency of SHCs.
  • Restructure policies and consider incentivizing SHC development plans.

Trend 3: THE 15-MINUTE CITY

Cities are being designed so that amenities and most services are within a 15-minute walking or cycling distance, creating a new neighborhood approach.

The ‘15-minute’ city concept – primarily developed to reduce carbon emissions by reducing the use of cars and motorized commuting time – is a decentralized urban planning model, in which each local neighborhood contains all the basic social functions for living and working. Many people argue that the concept of creating localized neighborhoods in which residents can get everything they require within 15 minutes by walking, cycling or on public transport will ultimately improve the quality of life. Such spaces entail multipurpose neighborhoods instead of separate zones for working, living and entertainment, which reduces the need for unnecessary travel, strengthens a sense of community and improves sustainability and liveability. 

Today most cities have ‘operation-based’ neighborhoods, with separate areas used predominantly for business or entertainment. Fragmented urban planning results in a sprawl, with people having to travel long distances across the city to get to their destination. In contrast, compact cities of the future, or ‘hyperlocalization’, prioritize strategies for urban infrastructure that aim to bring all the elements for living and working into local neighborhood communities.

The ‘15-minute’ city is an iteration of the idea of ‘neighborhood units’ developed by American planner Clarence Perry during the 1920s. The theory of ‘new urbanism’, an urban planning and design concept promoting walkable cities, subsequently gained popularity in the US in the 1980s. Similar versions of ‘urban cells’ or 30- and 20-minute neighbourhoods have also emerged across the globe in the past decade. 

The rezoning model will gain further traction in the future, boosted during the COVID-19 disruption, by new ways of working that require less transport. With climate change as a major global concern, C40 in its “C40 Mayors’ Agenda for a Green and Just Recovery” has recommended this model for cities worldwide, arguing that its pedestrianization approach contributes to a reduction in greenhouse gas emissions and supports environmental sustainability.

While this approach may not be entirely applicable to every city – for example, it is probably more suitable for a big metropolis than for smaller cities – remote working and the digitalization of services have increased the impetus to apply the principle of neighborhood planning regardless of city size.

How to ensure successful implementation

  • Correlate sustainability goals and urban planning initiatives.
  • Ensure community endorsement.
  • Decentralize core services.
  • Launch schemes to promote affordable housing in every neighborhood.
  • Allow flexible use of urban spaces and properties across neighborhoods.

Trend 4: MOBILITY: INTELLIGENT, SUSTAINABLE AND AS-A-SERVICE

Cities are working towards offering digital, clean, intelligent, autonomous and intermodal mobility, with more walking and cycling spaces, where transport is commonly provided as a service.

This is one area where cities should expect huge disruption. Some major changes in how people move around in cities are already under way, but the trend will accelerate further in the next decade, with electrification, autonomous driving, smart and connected infrastructure, modal diversity, and mobility that is integrated, resilient, shared and sustainable – powered by disruptive business models. In answers to an ESI ThoughtLab survey question, 54 per cent of city leaders admitted they will rethink mobility and transportation in the aftermath of the COVID-19 pandemic.

Less need to travel. It is expected that in general people will travel less than they have in the past. With new urban planning concepts such as the ‘15-minute city’ promoting compact environments, ‘connected corridors’ and changes in the way that people work, movements within urban areas will decrease substantially and bicycles, scooters and even walking will increasingly be the preferred options in community neighborhoods. 

Electrification. It is estimated that in 2030, electric vehicles (EVs) will have around 32 per cent of the total market share for new car sales globally, although there will be differences between regions. 

Connectivity and automation. Recent Deloitte research in the United States estimates that by 2040, up to 80 per cent of passenger miles travelled in urban areas could be in shared autonomous vehicles.  This development will be led by major technology-based corporations or the automotive and transport sector and by technology-based start-ups. Solutions such as passenger drones by EHang and drone delivery by Amazon are making rapid advances. Logistics companies look increasingly to autonomous technology to meet the rising demand for goods.

Sharing. Cities will also benefit from an increase in on-demand multimodal mobility and Mobility-as-a-Service (MaaS) platforms, such as in Helsinki. For instance, residents will be able to plan and book door-to-door trips digitally, use the same fare card for all transport modes, access automated last-mile cargo shipment services, and have end-to-end real-time visibility of freight in transit – and with seamless payment models.

Intelligent mobility. With data playing a central role in some of these shifts, customised travel is something that cities will start to deliver, segmenting their customers (citizens) in a mobility context and implementing strategies for each market segment. The value of ‘intelligent’ mobility is forecast to grow to €850 billion by 2025, representing more than 1 per cent of global GDP.

How to ensure successful implementation • Embrace a holistic approach (and consider the total mobility mix), and start with a minimal viable ecosystem for ‘smart mobility’, adding features over time in an agile way. 

• Invest in infrastructure – physical, energy, digital and telecoms – that supports effective transformation. 

  • Be aware that a new generation of vehicles is needed, and there should be a resurgence in the use of some existing types of vehicles, such as motorbikes and bicycles, with a strong focus on micromobility.
  • Make mobility management a priority, both management of assets (infrastructure and vehicles) and management of clients (people).
  • Make sure regulation adapts to the new circumstances, covering vehicle security and liability in cases of accidents, data management and privacy, interoperability, connectivity, risk and responsibility, and cybersecurity.

Trend 5: INCLUSIVE SERVICES AND PLANNING

Cities are evolving to have inclusive services and approaches, fighting inequalities by providing access to housing and infrastructure, equal rights and participation, and jobs and opportunities.

Cities are not only centers of economic development; they symbolize equality, healthy communal coexistence and prosperity for all. Social inclusion should be a key pillar of urban growth and development for the cities of the future, bearing in mind the three building blocks identified by World Bank: spatial inclusion (providing affordable housing, water and sanitation), social inclusion (expanding equal rights and participation) and economic inclusion (creating jobs and offering citizens opportunities for economic development).

Cities should be planned and designed to generate social and economic outcomes for everyone, avoiding the costs that occur when people are excluded. Although the poor are usually the most affected, cities will also remove the barriers caused by differences in gender, race, nationality, disability or religion. Inclusive design could mean building gender-inclusive urban centers to provide safe and secure spaces for carers and installing wheelchair-accessible features for those with mobility difficulties. Inclusive design may mean building greener and safer neighborhoods for all citizens and investing to create secure and joyful spaces for children to play and accessible places for the elderly, making cities pleasurable for the silver generation. An inclusive social care system will embrace migrants and offer them tailored services that address their particular needs and circumstances, just as for everyone else. 

There are already some signs of cities prioritizing inclusion. A survey of 167 cities worldwide found that 40-47 per cent use metrics to track progress towards inclusion goals, although the majority are in advanced economies.

Digitalization enables governments to facilitate access to a range of services, accelerate business opportunities, analyze societal gaps, educate mass audiences, collect real-time data, boost data-driven decision-making, facilitate predictive and proactive governance, and engage larger audiences in social activity. It also frees up government capacity to re-direct finite administrative and case management resources to those who need it most.

Although a fundamental requirement for social inclusion, technology may also create disparities. City planners should remain aware of the large numbers of ‘digitally invisible’ citizens, to avoid skewing the results of city analysis that would compromise urban planning efforts and even contribute to widening the inequality gap.

How to ensure successful implementation

  • Implement proactive multisector solutions, both preventive and curative.
  • Promote an integrated planning approach instead of a fragmented one.
  • Follow an equity-centered by design approach.
  • Improve the adoption of technology solutions and digital skills, supported by adjusted regulation.
  • Pursue data equity.
  • Establish inclusive living labs.
  • Use agile methods to respond rapidly and anticipate citizens’ needs.

Trend 6: THE CITY AS A DIGITAL INNOVATION ECOSYSTEM

Cities strive to attract talent, enable creativity and encourage disruptive thinking; developing themselves through an innovation model approach and a combination of physical and digital elements.

While traditionally companies and industrial parks have been concentrated in suburbs of the city, start-ups and digital nomads are bringing innovation and ideas to the city centres. As population numbers increase in urban areas, cities compete for investment, skilled workers (talent) and cultural prominence, and this is turning urban regions into innovation hubs, leveraging data. 

In some cities with an innovation or technology department, individuals try to innovate from a silo. This is not what we mean. Cities will adopt a multidimensional approach to innovation, the so-called quintuple innovation helix framework (of interactions between university, industry, government, public and environment), and city governments will act as platforms enabling the right connections, policies, places and infrastructure to make the ecosystem flourish; solving the town’s most prominent challenges and bringing positive change to the city and its industries.

Cities will be Living Labs for digital transformation and centers of experimentation, using data to develop pilots that can be scaled up. By putting talent attraction at the center of its strategy, a city can develop with the goal of being the most attractive host (of people, companies and research centers), in order to facilitate ecosystem development. The City Hall has to develop the right skills, and data collection and usage, and modernize its governance model to foster collaboration and encourage open innovation. Increasing the level of adoption of digital innovation in high-priority economic sectors generates a positive impact on local competitiveness, by opening up new sources of employment and economic growth. It also supports the uptake of disruptive and promising digital technologies. Remote working has lengthened the list of cities that can adopt this strategic approach. In line with the ‘rise of the rest’ theory put forward by Richard Florida in 2019, the shift from enterprise attraction to talent attraction makes it possible for smaller cities to thrive in a post-pandemic world, using data as a source of competitiveness in the digital innovation environment. It is a time for small remote hubs. 

How to ensure successful implementation

  • Create capacity to attract talent, expertise and open talent networks.
  • Foster agile processes and avoid a risk-aversion culture.
  • Add the required skill sets and gain an awareness of the opportunities that new technologies offer.
  • Ensure data mastery and interoperability standards.
  • Embrace a new way of management and leadership.

Trend 7: CIRCULAR ECONOMY AND LOCAL PRODUCTION IN THE CITY

Cities are adopting circular models based on a healthy circulation of resources; principles of sharing, reusing and restoring; and with emphasis on limiting municipal waste volumes and on producing locally – for instance, urban farming.

Do you know that on average a car is parked more than 90 per cent of the time? Or that the average office is used only 35-50 per cent of the time? That 30 per cent of food is wasted? That half of the waste is produced in cities? Increasingly, cities are developing aspects of a circular economy, which entails decoupling economic activity from the consumption of finite resources and designing waste out of the system. 

What does it mean to live in a city with a circular economy? It is a city that:

  • promotes a better use of resources through procurement policies;
  • consumes less, and reuses and recycles water, energy, products and materials; 
  • recycles and manages waste according to regulations;
  • stimulates an economy of repair, borrowing and second-hand commerce;
  • nurtures a sharing mindset (e.g., car trips, spaces and materials);
  • fosters better use of resources in construction (e.g., 10-15 per cent of building materials are wasted during construction);
  • stimulates an innovative approach to how the city and its citizens consume, store and use resources.

A circular economic model is one of the pillars of the European Union’s European Green Deal strategy, and there are already some examples of its application, as well as policies and mechanisms to fund the transition. Cities will also increasingly encourage a ‘produce local’ approach to food and energy. Urban and small-scale farming is gaining traction in some urban centers as a way to deliver fresh and healthy food, establish direct contact with food producers and reduce carbon emissions, while strengthening the local economy. Innovative approaches make better use of space and light, such as vertical farming, hydroponics, LED indoor farming and rooftop farming. Simultaneously, the energy revolution is contributing to the circular economy through decentralization of energy production, mainly through renewable sources (biogas, wind, solar, wood biomass, waste, etc.), and off-grid and microgenerators, paving the way for self-sufficiency whereby cities generate as much energy as they consume, creating communities of energy and offering further economic opportunities.

How to ensure successful implementation

  • Secure funding for the transition.
  • Establish flexible and simple regulatory structures and smart procurement.
  • Create or rethink metrics to measure circularity.
  • Leverage national or regional policies and invest in awareness campaigns.

Trend 8: SMART AND SUSTAINABLE BUILDINGS AND INFRASTRUCTURES

Cities aim to have regenerated buildings and to leverage data to optimise energy consumption and the use and management of resources in buildings and utilities: waste, water and energy.

In 2019, the Coalition for Urban Transitions estimated that it should be possible to cut emissions from cities by about 90 per cent by 2050 (15.5 GtCO2e by 2050) using proven technologies and practices, in particular for buildings and infrastructure. Estimated cuts include 36.5 per cent from residential buildings and 21.2 per cent from commercial buildings.  Buildings are currently responsible for 30-40 per cent of total city emissions. To achieve the COP21 target by 2050, emissions from buildings must be 80-90 per cent lower than they are today.

Many buildings are energy inefficient and contribute heavily to carbon emissions. In the EU, as of February 2020, roughly 75 per cent of building stock was energy inefficient.  So there is some way to go. A 2019 Navigant report stated that only 5 per cent of the smart city projects that it tracked had a focus primarily on building innovation, and just 13 per cent had ‘some level’ of focus on buildings.

World Green Building Council defines a green building as one that, “in its design, construction or operation, reduces or eliminates negative impacts, and can create positive impacts, on our climate and natural environment; preserve precious natural resources and improve our quality of life”.9 Given the pressure on cities to act on climate change, green buildings are going to invade our urban centers. Besides being built with sustainable and ethical materials, they will be energy, water and resources-efficient; environment-friendly by design – powered by renewables (such as solar) and capable of producing their own energy (electricity prosumers); covered by vertical and/or rooftop gardens; and able to provide a better indoor environment for those who live in them or use them. 

On top of that, they will leverage data and digital technology to enable components of infrastructure to become more efficient and better adapted to the stakeholders’ usage. Business models provided by flexible office operators will foster an Office-as-a-Service or even Real Estate-as-a-Service approach. 

Gartner predicts that by 2028 there will be more than 4 billion connected IoT devices in commercial smart buildings.  They will be powered by telecommunications infrastructures, with 5G and High Efficiency Wi-Fi (6 or 6E) at the forefront, and smart utilities such as power, waste and water.

As of May 2020, 28 major cities have signed up for the World Green Building Council’s Net Zero Carbon Buildings Commitment,  which calls for cities to reach net-zero carbon operations by 2030 for all assets under their direct control, and to advocate for all buildings to become net-zero carbon in operations by 2050.

How to ensure successful implementation

• Define a vision and technological guidelines, and develop a roadmap. 

• Stimulate and prioritise sustainability-targeted renovation, construction and restoration projects.

• Launch incentive plans to promote alternate materials and build a strong engagement ecosystem.

• Beyond investing in buzzwords like 5G or sensory-tech solutions, extract value from data. 

• Promote data-sharing standards and policy.

Trend 9: MASS PARTICIPATION IN CITY BUILDING AND DEVELOPMENT

Cities are evolving to be human-centred and designed by and for their citizens, promoting mass participation by the ecosystem in a collaborative process and following open government policies.

What does an ideal experience in our city look like? How can our city contribute to a brighter global future? How would we like our children to grow up in the city? What would we like our city to be known for around the world? 

These are some of the questions you will be asked in cities where there is open government and mass participation. These are places where citizens, social innovators, civil society organisations, businesses and academia are part of the process of building their cities (in a quintuple helix model), closing the gaps between local government and the ecosystem. 

Through mass participation, supported by open data and technology, and with local government acting as a platform, cities can use citizens as a ‘sensor’ and benefit from greater innovation, better utilisation of resources and an increased sense of ownership. Co-creation through mass participation is a bi- or multidirectional human-centred approach, rather than just a bottom-up or traditional top-down approach.

Cities are increasingly innovative in the way they promote participation, and technology plays a key role in enabling innovation – for instance, mobile applications and reporting websites overcome the need for groups to meet in person to discuss new ideas and collaborate; and digital currency opens the door to gamification strategies. But to ensure the three principles of open government are met (participation, collaboration and transparency), it is necessary to have open data platforms and other initiatives. Participatory budgets are a good starting point. Some cities go a step further and provide citizens and the ecosystem with real-time access to information, to keep them informed about changes that affect where they live. Ultimately, cities will progress towards having true platforms for collaboration, fostering co-creation and leading to new governance models (co-governance), where responsibility is shared among the participants and is not just a burden on the local government. From this perspective, a new culture is created, and citizen engagement emerges as critical for ensuring the long-term sustainability of policy initiatives. 

How to ensure successful implementation

  • Engage the city population at scale and combine physical and virtual interactions whenever possible.
  • Follow the digital imperative, but create a smart population for smart cities.
  • Ensure accessibility and inclusiveness for all citizens. 
  • Establish clear governance processes and transparency to boost trust – an enabler of open governments and collaboration.
  • Align objectives and expectations, and make clear connections between participation and decisions taken.

Trend 10: CITY OPERATIONS THROUGH AI

Cities are adopting automated processes and operations (orchestrated by a city platform) and following data-driven planning approaches.

Machines run 24/7, and there are operations and tasks that cities perform that will become increasingly smart and powered by artificial intelligence (AI). AI will contribute to the optimisation of operational efficiencies, benefiting city managers, and ultimately citizens, through reshaped service delivery. In an ESI ThoughtLab study, 66 per cent of 167 cities surveyed are investing heavily in AI, and 80 per cent will do so over the next three years.

While chat assistants are currently among the most common solutions powered by AI, cities will evolve to have digital platforms as ‘city brains’, where all urban activity is orchestrated and operated, providing a holistic view of the city, allowing for events correlation, fast and assertive root-cause analysis, predictive analysis (through machine learning) and incident management; and providing operational insights through visualisation. If the behaviour of almost every citizen is registered through anonymised data, and 5G technology enables cities to become huge connected ecosystems, it will be of paramount importance to maximise data value and improve planning and decision-making using AI and data analytics, on the way to a cognitive city. Gartner predicted in 2019 that a city platform will be a mature smart city solution in five to ten years’ time, when it is expected that 1-5 per cent of cities will be using a city platform to manage their operations.

But cities can go even further. We see cities like Dublin and Singapore, among others, creating a Digital Twin – a dynamic digital replica of their physical assets and environments and their interdependencies – for urban planning purposes and using machine learning to predict future events and trends. Digital Twins will become increasingly powerful in enabling data-driven decisions and will have a high adoption rate among city governments, with the promise of making cities more resilient. ABI research has predicted that by 2025 the number of urban Digital Twins will exceed 500.

How to ensure successful implementation

  • Start with data strategy and governance.
  • Be aware of privacy issues, and stimulate a culture of trust.
  • Ensure data standards and interoperability.
  • Avoid algorithmic bias.
  • Develop the right skill sets among the city workforce.
  • Follow a citizen-focused approach to operations.

Trend 11: CYBERSECURITY AND PRIVACY AWARENESS IN THE CITY

Cities strive to promote awareness of the importance of data privacy and to get prepared for the impact of cyberattacks, since data will be an important city commodity.

As services are becoming highly integrated and interconnected, and vulnerabilities created during data exchanges are more common, data security is vitally important. In 2018, the total cost of losses from cyberattacks for cities in a survey averaged €2.8 million.

Cybersecurity is now a key consideration for developers and planners of smart cities, and attention is turning to the risks inherent in such a highly interconnected environment. However, while the cybersecurity industry has developed a mature understanding of how to measure and mitigate the impact of cyberattacks on infrastructure in ‘non-smart’ cities, there is limited knowledge of the potential impact of attacks on smart cities. 

An attack on smart city infrastructure may create effects that cascade – or ‘ripple’ – outwards and affect other parts of the city or country, or beyond. Resilience is the essential concept that must be considered when creating these complex and highly interconnected environments. It is essential to use resilience as a cornerstone of city building, and to do so in a way that can be scaled up and remain flexible for future upgrades and enhancements.

As the complexity of technologies, operational interdependencies, and systems management increases, so does the interest of hackers in profiting from this environment. Developing smart city initiatives without considering cybersecurity and privacy can result in a highly vulnerable environment that poses security risks to critical infrastructure and data, and in some cases may even create safety risks for citizens. 

Advance planning is essential. By one estimate, 95 per cent of Cities 4.0 (as labelled by ESI ThoughtLab, referring to hyper-connected cities that use technology, data, and citizen engagement in pursuit of the SDGs) ensure that cybersecurity is considered early in the process, compared with only 51 per cent of other cities. 

However, many cities are not ready for the challenges. Besides lagging far behind in the digital revolution, with outdated technologies running critical infrastructure, they lack the human resource expertise to be capable of addressing the challenges.  Creating ecosystems of innovation – as Tel Aviv has done – could be one approach to improving security. Another approach is to invest in models of public/private cooperation and coordination. Efforts must be backed by city executives and not left to external entities or departments alone. 

How to ensure successful implementation

  • Ensure three major goals:
    • Govern like a nation.
    • Treat smart cities as a defensive ecosystem.
    • Reboot with resilience.
  • Syncronise the city with cyber strategy, and allow for flexibility.
  • Have a clear cyber and data governance in place, with accountability. 
  • Leverage the ecosystem and build strategic partnerships to grow cyber capabilities. 
  • Align regulation policies.
  • Adopt a specific tool to manage the cybersecurity landscape of a smart city. 
  • Invest in awareness campaigns on privacy.

Trend 12: SURVEILLANCE AND PREDICTIVE POLICING THROUGH AI

Cities are leveraging artificial intelligence (AI) to ensure safety and security for their citizens while safeguarding privacy and fundamental human rights.

Surveillance and predictive policing through AI is the most controversial trend in this report, but one that has important implications for the future of cities and societies.

Technology is frequently used as a synonym for evolution, but the ethics of its use may need to be questioned. An underlying question is what society we are aiming to build. There are doubts and uncertainties about the impact of AI on communities and cities: the most fundamental concern is privacy, but there are frequent debates about AI from other perspectives, such as its impact on jobs, the economy and the future of work. Therefore, one cannot disconnect the discussion about surveillance and predictive policing from recent debates about the societal, ethical and even geopolitical dimensions.  

The pace of adoption of AI for security purposes has increased in recent years. AI has recently helped create and deliver innovative police services, connect police forces to citizens, build trust and strengthen associations with communities. There is growing use of smart solutions such as biometrics, facial recognition, smart cameras and video surveillance systems. A recent study found that smart technologies such as AI could help cities reduce crime by 30 to 40 per cent and reduce response times for emergency services by 20 to 35 per cent.  The same study found that cities have started to invest in real-time crime mapping, crowd management and gunshot detection. Cities are making use of facial recognition and biometrics (84 per cent), in-car and body cameras for police (55 per cent), drones and aerial surveillance (46 per cent), and crowdsourcing crime reporting and emergency apps (39 per cent) to ensure public safety. However, only 8 per cent use data-driven policing.  The International Data Corporation (IDC) has predicted that by 2022, 40 per cent of police agencies will use digital tools, such as live video streaming and shared workflows, to support community safety and an alternative response framework.

Surveillance is not new, but cities are exploring the capabilities of predicting crime by analyzing surveillance data, in order to improve security. Cities already capture images for surveillance purposes, but by using AI, images can now be analyzed and acted on much more quickly.  Machine learning and big data analysis make it possible to navigate through huge amounts of data on crime and terrorism, to identify patterns, correlations and trends. When the right relationships are in place, technology is the layer that supports law enforcement agencies to better deliver their job and trigger behavior change. The ultimate goal is to create agile security systems that can detect crime, terrorism networks and suspicious activity, and even contribute to the effectiveness of justice systems.

How to achieve these goals while respecting privacy and liberties remains a crucial question.

Experts say it is almost impossible to design broadly adopted ethical AI systems, because of the enormous complexity of the diverse contexts they need to encompass. Any advances in AI for surveillance and predictive policing need to be accompanied by discussions about ethical and regulatory issues. Even though the value proposition of these technologies might seem attractive from a use case perspective, liberties and civil rights need to be protected by proper privacy and human rights regulations.

In summary, cities need to consider if using technology for surveillance and policing implies making concessions to convenience at the expense of freedom.

How to ensure a successful implementation?

  • Balance security interests with the protection of civil liberties, including privacy and freedom.
  • Experiment responsibly, and regulate first.
  • Establish institutional review boards that include experts from multiple disciplines.
  • Create mechanisms for monitoring and reviewing algorithms.
  • Privilege the usage of environmental data instead of personal data.
  • Promote strong collaboration and trust between law enforcement systems and citizens.
  • Accompany digitalisation with a change in culture.

How urban transformation will be different in the 2020s

Social impact and decarbonization strategies will be the pillars of urban development projects in the coming years
View the original article here


From revamping disused docklands to rejuvenating rundown neighbourhoods, cities are embarking on urban development projects that put health and sustainability at the heart of placemaking.

These mixed-use schemes increasingly focus on implementing features that support wellbeing, champion strong environmental credentials, build communities and promote equality and inclusion.

The redevelopment of the western edge of Dublin city center aims to bring the concept of the 15-minute city to life while Rotterdam’s M4H project will re-green the site surrounding a manufacturing hub, and add sport facilities, housing, hospitality and cultural space.

Such schemes show how thinking around what makes a successful city is shifting, says Jeremy Kelly, Lead Director, Global Cities Research at JLL.

“City governments are looking beyond traditional metrics like GDP and employment growth and are refocusing on harder-to-measure factors relating to liveability, opportunity and experience,” he explains.

“That has implications for real estate because city governments now expect the industry to deliver developments that have a positive social impact.”

Looking beyond the money

Many of today’s schemes draw from major urban projects of the previous decade – such as Hudson Yards in New York City and London’s King’s Cross.

“These were substantial projects that changed the spatial logic of a city, opening up new areas that were increasingly mixed-use, and cutting-edge when it came to responding to the demands of occupiers and well-off residents,” says Kelly.

One big difference is that urban transformation projects of the 2020s will positively impact surrounding communities, in part by addressing challenges to provide affordable housing.

“That’s where the shift is – thinking about the community impact,” says Kelly. “And for developments to boost or retain their value, they’ll need to be part of neighbourhoods that are also regenerating.”

Health is another key focus for today’s projects, tying into trends such wellness in the workplace and more active lifestyles.

Outdoor access, natural light and green areas – long shown to boost mental health – will be critical features for projects, along with easy access to leisure and healthcare amenities.

“Health and wellbeing concepts are foundational to today’s developments, whatever the size of the project,” says Walid Goudiard, Head of Project and Development Services at JLL. “It’s a matter of placemaking and curating the built environment to provide a healthy, positive experience whether in an office or residential setting.”

The McEwan in Edinburgh, for example, is the first European residential scheme to receive a Fitwel 3-start rating for its focus on health and wellbeing through landscaped gardens and neighbourhood amenities.

And there will be more to come. “The pandemic has accelerated that transition toward creating more human and sustainable places,” says Richa Walia, Director, Work Dynamics Research at JLL. “There’s a genuine desire among companies to act responsibly and their first priority is to create human-centric places.”


Sustainability for social good

Environmental concerns will equally guide urban development, as municipalities develop plans to hit net zero targets and more real estate companies report their environmental impact in line with globally recognized standards.

In Paris, the recently completed regeneration of Clichy-Batignolles is designed as an eco-quarter with low-energy building powered from geothermal and solar sources.

Biodiversity, too, will become a key pillar for transformation projects, with city authorities more likely to greenlight schemes with features such as green roofs, areas given over to rewilding and living walls. Many municipalities now restrict the construction practice of soil sealing to improve carbon capture in buildings and boost biodiversity.

What’s more, plans will need to consider retrofitting and repurposing existing buildings instead of embarking on carbon-intensive new builds. Here, technology and digitisation can offer two vital benefits in optimising resources, says Goudiard.

“Firstly, sensor-enabled smart buildings can automate operations for improved efficiency and reduced emissions,” he explains. “Digitizing spaces also helps with tracking how they’re used and then getting the maximum value from them – especially in dense city centers. The concern is how to embed tech solutions in a way that really benefits users.”

Technology could also boost inclusiveness in urban developments through data analytics that align space design with users’ needs – such as enhancing play areas or accessible walkways – or digital services that offer more equitable access to housing and infrastructure. However, with less defined metrics to track than decarbonisation initiatives, inclusion can be a design challenge in many projects.

“There is a lot of work to be done when it comes to creating inclusive spaces,” says Walia. “The elements that make up diversity and inclusion need to be addressed holistically. Companies are trying to understand how a development can truly create social impact.”

Governance is also moving with the times.Whole of place governance, where authorities collaborate closely with the users of a space, will be the critical difference in urban transformation projects of the coming years.

City planning in Paris, for example, now calls for developers to run consultations where local communities provide feedback to design teams and investors on major projects, helping to improve inclusiveness.   

“It’s a more holistic view that’s not just based on the economic output of that district,” says Kelly. “It’s about value creation and improving quality of life for the whole neighborhood.” 


This Toronto Building Is a Model for a Post-Pandemic Office

It’s small, wood, local, efficient, and it has the best bike room in town.

By: Lloyd Alter
View the original article here

Exterior in the evening of the building. Leaside Innovation Centre

The future of the office post-pandemic has been a subject of many posts in the last few years. I have written that we will be living in a hybrid world, with “one foot in the real world, one foot in the virtual, and everything will be flexible and adaptable.” I have suggested that we will see the return of the satellite office in the 15-minute city, in a new hub-and-spoke world. Oh, and the new office buildings will be made from low-carbon materials and nobody is going to want to work in a building without seriously good ventilation.

That’s why I was so intrigued by a new office building proposed for Leaside, in a former industrial area of Toronto that first transitioned to big box stores but now appears to be evolving again. The Leaside Innovation Centre (LIC) is being developed by Charles Goldsmith, designed by Greg Latimer of Studio CANOO, and engineered by David Moses, who is known for his expertise in mass timber construction.

The LIC is a five-minute walk to a new transit line and is surrounded by very expensive homes in desirable residential areas. Basically, it’s what could be ground zero in a Leaside 15-minute city, and may well attract tenants and buyers from the immediate area.

Leaside Innovation Centre

Like many new office buildings, it is built of mass timber. On their website, they list the benefits:

“Mass timber structure is the contemporary equivalent of the beloved industrial warehouse structures that have populated the downtown core for well over a century and are now being repurposed for housing and office space to meet the needs of the 21st century. The mass timber structure (comprised of Cross-Laminated Timber (CLT) floor plates and glulam beams and columns) is substantially lower in its carbon footprint than steel or concrete. The harvesting of renewable forest products to fabricate CLT captures atmospheric carbon helping to mitigate the impact of climate change by storing the embodied carbon in the finished product. In addition, the CLT structure weighs approximately 25% less than a comparable concrete structure reducing the load on the foundation and allowing for reduced concrete use in the foundations.”

Leaside Innovation Centre

What Is CLT?

It’s an acronym for Cross-Laminated Timber, a form of Mass Timber developed in Austria in the 1990s. It’s made of several layers of solid dimension lumber such as 2X4s laid flat and glued together in layers in alternating directions.

CLT can work as a two-way slab, and when you have beams it can often be less expensive to use Nail-Laminated Timber (NLT)—learn about the different LTs here—but Latimer of Studio CANOO tells Treehugger they wanted longer spans matching those in the parking garage for maximum material efficiency. They are also getting their CLT from Element 5, the new supplier in St. Thomas, Ontario (on Treehugger here). Latimer tells Treehugger the finish on their CLT is far better than you can get from NLT or from other suppliers.

There’s still lots of glass! Leaside Innovation Centre

Many office buildings are clad in floor-to-ceiling glass, including mass timber structures where the developers want to show off the beauty of the wood. Unusually, the Leaside Innovation Centre is clad in prefabricated thin brick panels with only a 40% glass-to-wall ratio. They note this allows for much more insulation, reducing the size of the mechanical systems. Latimer tells Treehugger they are looking at triple-glazing the windows as well, but he also notes that it is much easier to furnish the building when the walls are not all glass, and you get much more efficient office layouts.

Building science expert Monte Paulsen has discussed this many times: all-glass buildings are not sustainable even if they are made of wood. In our coverage of the building that Paulsen is criticizing I mentioned those in passing, but it should be taken far more seriously. It is good to see that Latimer and Studio CANOO are doing exactly that.

In my now-archived review of Joseph Allen’s book “Healthy Buildings,” I noted that after the pandemic, tenants and buyers will have lots of options and will be demanding more fresh air, more filters, more air changes.

“The dramatic drop in the demand side of the office market means that tenants will get to be picky, and they are going to go for the buildings that have the best ventilation; developers will be competing to offer the most and cleanest fresh air, the biggest heat recovery ventilators (so that you get lots of air without lots of heating and cooling costs). Any office building that doesn’t offer this stuff is going to be a see-through (a building with no tenants where you can look in one side and see right through to the other) in short order.”

The LIC is doing exactly that: “Mechanical ventilation air supply will be treated with Ultraviolet Germicidal Irradiation (UVGI) and MERV 13 filters to improve indoor air quality, and minimize the amount of airborne contaminants, germs, bacteria and viruses entering the building.”

Latimer explains that the UVGI “explodes the RNA of the virus” and that the system is the same as being done in the fanciest buildings by engineers like ARUP.

Ground Floor Plan. Leaside Innovation Centre

Latimer also tells Treehugger the building is designed with active transportation in mind: There is currently parking for 30 bicycles and it is not stuck down the ramp in the parking garage, but conveniently sits on the ground floor space smack beside the main entrance, along with two showers. That’s very impressive. When I asked if 30 bikes were enough, Latimer noted they are looking at stacking systems to get in more.

Leaside Innovation Centre

It is a tribute to the success of the mass timber industry that small buildings are getting almost too common to cover anymore. As Monte Paulsen demonstrates, people are also getting a lot more critical. It’s like judging the freestyle skiing and snowboarding at the Olympics; you’ve got to really perform, and you have to have more than one trick.

The Leaside Innovation Centre has lots of moves that make it interesting, not just the relatively locally sourced mass timber but the location, the mechanical systems, the cladding, and yes, the bike room. If people are going to get dragged back to the office, this is where they will want to go—close to home, lots of light and fresh well-filtered air, a little biophilic goodness from all the wood, nice amenities, and a glorious bike locker.

It well may be the model of a speculative office project in the post-pandemic world.

Here Are 4 Sustainable Office Design Trends To Embrace In 2022

A growing number of firms are adopting bio-based building materials, making it one of 2022’s most prominent emerging design trends.

By: Kate Tattersfield
View the original article here

  • A growing number of developers, architects and interior designers are embracing sustainable alternatives in an effort to curb climate change. 
  • Reducing waste in the workspace design sector is a trending topic right now.
  • The built environment industry needs to look beyond operational efficiency and focus on decarbonising the materials used in its build and fit out processes.

The built environment is responsible for nearly 40% of global carbon emissions, according to research published by the Green Building Council. 

28% of this derive from operational emissions – the carbon omitted by powering, heating and cooling a building – while 11% is a by-product of embodied emissions which are produced through the extraction, transportation, manufacturing, and assembly of the materials used to build, fit out and furnish a building.

Fortunately for our planet and species, there’s an appetite for change, and a growing number of developers, architects and interior designers are embracing sustainable alternatives in an effort to curb climate change. 

The built environment garnered lots of attention at the COP26 summit in November 2021, with over 130 events dedicated to it.

During the summit 44 businesses, including leading architecture firms, signed a net zero carbon buildings commitment, pledging to take increased action to decarbonise the built environment across their portfolios and business activities.

The 2022 office design trends we’ve chosen to highlight are all sustainability-focused. Our list covers a range of office design aspects – from the construction materials used to how design elements are recycled. Check them out:

How are you planning to make your office more sustainable this year? Photo credit: RODNAE Productions

1. Bio-based design materials

Buildings  – from the homes we live in to the offices we work in – have the potential to become carbon sinks as opposed to carbon generators. 

But to limit global warming to 1.5C above pre-industrial levels, the built environment industry needs to look beyond operational efficiency and focus on decarbonising the materials used in its build and fit out processes.

One way to reduce embodied carbon is to manufacture using bio-based materials such as wood, straw and bamboo. Bio-based products typically require less energy and have the potential to capture and store carbon through photosynthesis. 

A growing number of firms are adopting bio-based building materials, making it one of 2022’s most prominent emerging design trends. 

In July 2021, Grosvenor Group, one of the world’s largest privately-owned international property businesses, launched Holbein Gardens, its first net zero carbon office development. 

The firm conducted an early whole life carbon assessment to minimise upfront embodied carbon. Grosvenor Group is trialling new low embodied carbon products including cross-laminated timber in the extension, CEMFREE Concrete, Thermalite aircrete blockwork and reclaimed raised access flooring. 

Redesigning an existing office building is often more eco-friendly than constructing one from scratch. However, it’s important to consider the environmental credentials of the procurement, installation and use of materials. 

For example, using wood in office design isn’t necessarily sustainable if a large amount of carbon dioxide is produced in the logging, transportation and manufacturing processes, and if it ends up in landfill when the occupier moves out instead of being recycled. 

Here’s a list of environmentally friendly building material options to explore and use this year, courtesy of the sustainable and biophilic design company, Barbulianno:

  • Cob
  • Recycled steel
  • Sheep’s wool
  • Reclaimed, recycled or sustainable wood 
  • Cork
  • Straw
  • Bamboo
  • Recycled plastic
  • AshCrete 
  • Ferrock
  • Hempcrete
  • Plant-Based Polyurethane Rigid Foam
  • Enviroboard 
  • Mycelium 
  • Clay brick 
  • Timbercrete 
  • Recycled Rubber
  • Newspaperwood 
An indicative view of Holbein Gardens’ eco-friendly communal roof garden. Photo credit: Holbein Gardens

2. 3D printed office accessories

3D printing involves the creation of a 3D object from a CAD or digital 3D model. It’s a very sustainable design method because it produces very little waste compared with objects manufactured using fabrics, metals and other materials. 

It also reduces supply chain carbon emissions. A study by Michigan Technological University discovered that 41-64% less energy was used to 3D print an object compared with manufacturing it overseas and shipping it to the US. 

3D printing is gaining traction quickly and the office design sector is getting on board. In 2021, the international furniture brand Bene, alongside designers Pearson Lloyd and 3D-print specialist Batch.Works, launched bFriends, a new collection of 3D printed desktop accessories using 100% recycled bioplastic from waste food packaging. 

The products can be recycled by Bene at the end of their life to form a “complete closed-loop production model”. 

Caption: The 3D printing process in action. Photo credit: Bene
Bene’s bFriends stands come in different sizes and are designed to hold stationery, notes, mobile phones and more. Photo credit: Bene

3. Biophilic design

It feels like biophilia’s been on the workspace design agenda for so long that it can’t justify being a trend anymore, but here us out. 

In previous years, discourse on biophilic design was primarily concerned with plants, but 2022 will see a sharper focus on multisensory biophilic design. This includes the use of natural light, natural soundscapes and pleasant scents from the natural world that many believe have the power to energise or invoke a sense of calm. 

Another aspect of biophilic design which is set to gain traction in 2022 is the use of circadian lighting. Like natural light, circadian lighting matches people’s natural biorhythms (or internal ‘clocks’) by creating an artificial ‘sunrise to sunset’ that passes through different illuminance levels and colour spectrums. 

Blue-spectrum light is prioritised during daylight hours and warmer tones are introduced when the body is gearing up or winding down, e.g. at the beginning and end of the working day.

Circadian lighting is intended to amplify comfort and productivity, creating a healthier workplace experience. It can also help us feel happier by bolstering our connection to the natural world in an age where we spend the majority (around 90%) of our time indoors in manufactured environments. 

According to the professional services firm, ARUP, “…the future of interior and exterior lighting design certainly lies in this balance of quality daylight and electric light working together to support our human circadian adaptation.”

Circadian lighting supports our internal ‘clock’ which helps boost wellbeing. Credit: Copernico Photo credit: Holbein Gardens

4. Circular economy 

We’ve already included an example of a circular economy in action (Bene), but there are many more examples besides. 

A circular economy is one that involves sharing, resuing, repairing, recycling and leasing existing materials and items. It’s the opposite of a linear economy, which follows a ‘take-make-dispose’ framework. 

Reducing waste in the workspace design sector is a trending topic right now. In fact, it was a focal point at last year’s Workspace Design Show. 

One way to reduce waste is to avoid design change. Waste in the fit out industry is created because of design change, and design change starts at the very early stages of any project, for instance when the client brief changes.

Office designers can also avoid waste by adopting a circular mindset from the outset and partnering up with circular-based suppliers and partners like 2ndhnd, a Scottish-based company that specialises in procuring, refurbishing and reselling office furniture.

The growing awareness of sustainability coupled with the challenges posed by the pandemic has led to an increase in demand for 2ndhnd’s products. In an interview with Insider, co-owner and manager Ross Dutton explained: 

“We’re being asked more and more often to strip offices of their existing office furniture, which will eventually be refurbished and resold via our platforms, but also to help in the reconfiguration of existing spaces as more flexible spaces are introduced such as breakout areas, sofas and catch-up pods.”

The Future of Green Construction Materials

Architects are working with manufacturers to source new materials that improve health, lower costs, and reduce environmental impact.
View the original article here

Building materials—and what’s in them—have been making headlines, and for good reason. As The American Institute of Architects (AIA) raises the bar in response to climate change, architects and design professionals are partnering with clients, contractors, and manufacturers to source materials that meet new environmental goals, part of a larger effort to improve resiliency for the future.

“Historically, architects haven’t asked what goes into building materials,” says Lona Rerick, AIA, an associate principal at ZGF Architects in Portland, Oregon. “We used to just look at aesthetics, performance, and durability. But in the past decade, there’s been a shift to thinking more holistically about sustainable design and better building materials. Now we’re collaborating with clients to improve embodied carbon and health.”

Greener building materials are key to halting climate change. Currently, buildings produce about 40% of the world’s fossil-fuel carbon-dioxide emissions (CO2). In fact, the United States’ building stock produces more than two billion tons of greenhouse gases per year. But that number can be greatly reduced by limiting the embodied carbon of our building materials. Embodied carbon—the CO2 released during material extraction, manufacture, and transport, combined with construction emissions—will be responsible for 74% of all CO2 emissions of new buildings in the next 10 years. And unlike operational carbon, which can be reduced during a building’s lifetime, embodied carbon is locked in as soon as a building is completed and can never be decreased.

The good news? People want change. According to a 2019 survey by the Morgan Stanley Institute for Sustainable Investing, 85% of U.S. investors now express interest in sustainable investing, while half have factored attributes such as the sustainability of a business into their decision to buy. Overall this shows that people want to improve the environmental and social impact of their investments.

To help clients address climate change, architects need to prioritize lowering the embodied carbon of the materials that produce it most. It all starts with a discussion at the outset. “As the design team, we need to have early conversations with clients about the importance of building materials,” says Frances Yang, AIA, the structures and sustainability specialist at Arup in San Francisco. “We need to show them that materials made with little or net zero embodied carbon can be healthier and sometimes cheaper than traditional products. Once clients are on board, contractors and suppliers will support it, and more people will start to realize that they need to come up with greener strategies.”

Architects can minimize embodied carbon by focusing their efforts on the top three worst offenders—concrete, steel, and aluminum, which account for 22% of all embodied CO2.

Prioritize building materials that reduce carbon

The easiest way to reduce embodied carbon is through reuse—not just of existing building materials, but of existing structures, too. For renovation projects, architects can draft efficient designs that make the most of the current footprint. For new projects, architects can bring in salvaged materials sourced from deconstructed buildings. Most of all, when considering new materials, architects can minimize embodied carbon by focusing their efforts on the top three worst offenders—concrete, steel, and aluminum, which account for 22% of all embodied CO2.

Recently, Yang and her colleagues at Arup designed a project for a Bay Area client that required large amounts of concrete. The client was considering purchasing carbon offsets. But the low-carbon-concrete options Yang researched were cheaper than the offsets and could reduce a greater amount of embodied carbon. By choosing concrete made from granulated blast-furnace slag, a byproduct of steel manufacturing, Yang helped the client reduce both the cost of the project and its impact on the environment.

“Teamwork was key,” Yang says. “At the beginning, we worked with the sustainability and engineering teams to share the benefits of slag cement with the client and get them on board, which then persuaded the contractor to also get behind it. The main thing is to start the conversation early and get everyone’s support. In that instance, we were able to help the client cut 12,000 tons of embodied carbon—making everyone really happy with the outcome.”

Manufacturers agree. “Collaboration and communication between architects and concrete suppliers provides many benefits,” says Alana Guzzetta, the laboratory manager at the U.S. Concrete National Research Laboratory in San Jose, California, which has partnered with Yang on projects over the years. “Communication allows architects to be familiar with the cement substitutions and low-carbon-concrete options available in specific markets, which can be helpful in writing specifications. Additionally, when an architectural aesthetic is required for the concrete, the supplier needs to understand those needs to provide the correct mix. Overall, collaboration between designers, contractors, and suppliers is important for implementing the lowest-carbon mixes that meet performance and schedule requirements.”


The 7 steps to adopting better building materials

Creating a plan to build with healthier resources

  1. Establish the goal and scope: Turn values related to health and transparency into clearly written goals and a scope of work, approachable targets, and roles and responsibilities for the project.
  2. Set priorities within budget: Most projects are constrained by cost, and healthier materials are too often abandoned when an all-or-nothing mentality is adopted. Instead, allow projects to achieve incremental improvements. Some improvement is better than none at all.
  3. Develop measurable targets: This step establishes measurable criteria that define success for the project. The target should reinforce the goals and priorities described in the previous steps. Some rating-systems criteria have targets already defined. For example, LEED requires that a minimum of 20 products used on a project meet the disclosure requirements to achieve one point in the Building Product Disclosure and Optimization credit related to healthier materials.
  4. Define methods and metrics: Once targets for healthier materials—which are less toxic for human or environmental health—are established, the next step is to select tools to measure progress. A wide variety of resources are available. Choosing the right one requires matching the information it provides with the goal and scope of the project. For example, if the objective is to avoid certain harmful substances, a list of materials not to be used in the project (and conversely, ones that can be used) should be the primary reference guide.
  5. Outline roles and responsibilities: Determine who will fulfill the essential roles among the primary parties on the project, including the owner, designer or specifier, builder, and operator. Responsibilities include materials research, selection and specification, tracking progress, procurement, and reviewing contractor submissions.
  6. Ongoing review and documentation: During the design phase, tracking gives everyone the ability to see progress toward the project’s targets and also serves as a useful tool to ensure goals will be met.
  7. Develop a materials manual: A manual of building materials is intended to pull together essential information for the facilities operations team. It should address maintenance, warranties, repair, replacement, cleaning, and general care that may be specific to the products installed on the project. Owners who manage their own buildings may wish to use this as the starting point for a continual feedback loop with the building management team. Overall, this can be a great opportunity for architects to develop a closer working relationship with a project manager—a key factor in reducing embodied carbon.

Help clients source better building materials

Another way architects can help reduce embodied carbon is to source materials that have been verified with environmental product declarations (EPDs). Similar to nutrition labels, EPDs are documents that communicate the environmental impact of a product over its entire life cycle, conveying the carbon footprint of materials at a glance. Today, architects can easily check the EPDs of products by using the EC3 Embodied Carbon in Construction Calculator (EC3). Created by the Carbon Leadership Forum, the EC3 is a free, open-access application that helps architects and contrators source sustainable materials in categories like concrete, insulation, gypsum board, and carpet. “Increasingly, we’re writing into our specifications that suppliers must have an EPD if they’re providing a product,” Rerick says. “We need to see that to prove that the builder has lowered the global-warming potential of that product below a certain baseline.”

Recently, Rerick and her colleagues at ZGF Architects were hired by a major tech company to design a new campus in the Pacific Northwest. The tech company is working to become carbon-negative—removing more emissions from the environment than it contributes—and is starting by focusing on construction materials. Using the EC3 tool, ZGF and the other project teams helped the company reduce its carbon footprint while also enriching the EC3 database with additional EPD-approved materials. The size of the project greatly increased the data available to architects everywhere. “The EC3 database is now even more of a game changer, because we have a deeper resource to compare all these different EPDs,” Rerick says. “It enables us to set better targets for lower embodied carbon and then reach them.”

In addition to the EC3 tool, ZGF uses a digital calculator of its own design to further reduce the embodied carbon of projects. Available for free online, the Life Cycle Analysis tool enables architects to enter the ingredients of concrete mixes and quickly see the carbon impact—an innovation that should help improve the industry for years to come. “By creating a database and material-specific baselines to target for products with EPDs, the Carbon Leadership Forum is reducing uncertainty about them,” Rerick says. “This project is helping to accelerate the demand for EPDs among both clients and manufacturers.”

The 5 Key Takeaways of the AIA Materials Pledge

Guidelines for selecting sustainable materials:

  • Support Human Health by preferring products which support and foster life throughout their life cycles and seek to eliminate the use of substances that are hazardous.
  • Support Social Health and Equity by preferring products from manufacturers who secure human rights in their own operations and in their supply chains, and which provide positive impacts for their workers and the communities where they operate.
  • Support Ecosystem Health by preferring products which support and regenerate the natural air, water, and biological cycles of life through thoughtful supply chain management and restorative company practices.
  • Support Climate Health by preferring products which reduce carbon emissions and ultimately sequester more carbon than emitted.
  • Support a Circular Economy by reusing and improving buildings and by designing for resiliency, adaptability, disassembly and reuse aspiring to a zero-waste goal for global construction activities.

Advocate for Local Legislation

Going forward, one of the most important ways architects can increase the use of greener building materials is to advocate for local legislation to lower emissions. In 2019, New York City passed the Climate Mobilization Act, which set emissions caps for buildings, with the goal of reducing output levels 40% by 2030. Nearly 70% of New York City’s emissions come from buildings. As part of the legislation, owners of structures 25,000 square feet or larger must reduce emissions or pay a substantial fine, an initiative that’s sparking massive change.

Todd Kimmel, the New York City architectural manager for insulation manufacturer Rockwool and a Certified Passive House Designer, is working with architects to design green projects that include large-scale passive buildings such as the House at Cornell Tech Campus and Sendero Verde, a three-building, 752,000-square-foot complex in East Harlem that will be a model of low-energy construction. In the past, Kimmel focused on passive design and reducing operational carbon, figuring out how projects can utilize Rockwool insulation, a stone wool that retains heat while minimizing negative health impacts. (Unlike rigid or spray-foam insulation, mineral wool has no plastics that can be released into the air during installation or a fire.) But lately, thanks in part to the city’s Climate Mobilization Act, Kimmel has seen an increase in the number of architects working with contractors and manufacturers to source materials made with less embodied carbon—a trend he attributes to spillover from legislation that addresses operational carbon.

“Architects used to consider materials primarily from a performance standpoint,” Kimmel says. “Now we’re seeing clients invest in greener building materials and operations that exceed the code requirements, because they need to build for the future, to ensure they don’t get hit with penalties. As a result, that way of designing, which creates a healthier environment anyway, is becoming the new norm.”

Build Consensus

The key to building with more sustainable materials is to create consensus, from clients to contractors to manufacturers. Change isn’t easy. For manufacturers in particular, research and development can be costly and time-consuming. But innovation is leading to better options, including wooden materials that capture carbon and concrete materials that sequester it. In turn, these materials are becoming more available, giving architects an extraordinary opportunity for change.

“Manufacturing today requires investing in innovation,” says Cassandra Mellon, the director of architectural sales at Rockwool. “We’re a net carbon-negative company, and want to lower the embodied carbon of stone wool even more, because we believe that’s important. Part of what helped inspire us were initiatives like the AIA materials pledge, which showed that this movement was gaining momentum. If architects ask about things, we listen. Ultimately, the materials pledge creates the foundation for a collaborative approach between architects and manufacturers as we all strive for sustainable materials, and I think we’re going to see more of these types of products across the industry in the future.”

The Blueprint for Better campaign is a call to action. AIA is asking architects, design professionals, civic leaders, and the public in every community to join our efforts. Help us transform the day-to-day practice of architecture to achieve a zero-carbon, resilient, healthy, just, and equitable built environment.

Six Sustainable Building Materials to Look for in 2021

As contractors begin to plan future projects, be on the lookout for these seven sustainable building materials in 2021 and beyond
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With society becoming increasingly environmentally conscious, more and more project owners are looking for sustainable building materials to include in their properties. Not only do eco-friendly buildings substantially increase the resale value of a property in a forward-thinking market, but they can help save on utility and maintenance costs as well.

As contractors begin to plan future projects, be on the lookout for these six sustainable building materials in 2021 and beyond.

1. Composite Roofing Shingles

When people think of sustainability, they often think about materials that produce their own energy or help eliminate the need for energy. However, one aspect that is often overlooked is materials that are long-lasting.

Continually having to repair, manage, and replace building materials is a major drain on resources. As such, common roof tile types like asphalt shingles and wood shakes that frequently raise, crack, and fade can become energy pits not only from the perspective of allowing air and moisture to be transferred into and out of the house, but simply because they require so much attention to maintain.

A better alternative would be composite roofing shingles that stay true to the natural aspect of traditional materials while requiring a fraction of the maintenance resources.

2. Smart Glass Windows

A major trend in sustainability in recent years has been the use of large windows to allow more natural light flow and reduce the need for electric light consumption.

While the merits of this building practice cannot be understated, the benefits can be compounded by using smart glass as the window material of choice. Smart glass is an innovative material that changes its heating properties based on how heat and air conditioning is applied in the house. For example, during the summer months, the glass turns translucent to block any heating wavelengths that may require your air conditioning to work overtime while in the winter, the glass becomes transparent to allow the sunlight to aid in heating efforts. 

3. Bamboo Floors

If you are looking for a very bold option for sustainable living, consider using bamboo flooring. While you may not want to take the step of flooring your entire house in bamboo, it makes for a great option for add-ons, antechambers, and mudrooms.

Bamboo has a strikingly similar appearance to traditional wood while having a harvest cycle of a mere three years, compared to roughly 25 years for a normal tree. By choosing bamboo, you can slow the rate of deforestation by giving trees a chance to grow back.

4. Insulated Concrete Framing

Not only does framing help determine what kind of renovations your home can withstand, but it is a fundamental element in controlling heating and cooling costs.

While prefabricated wood panels will come with small cracks and crevices that allow for the transfer of air and moisture into and out of your home, those using an ICF construction (insulated concrete forms) will provide an airtight barrier that prevents unwanted energy transfers while also providing elite thermal mass to help maintain a consistent interior temperature.

5. Solar Panels

The inclusion of solar panels on the roof and in the yard is increasing in prevalence as technology improves and designs become more aesthetically pleasing. Both solar panel tiles and mounted structures are effective ways to reduce a home’s dependence on nonrenewable energy.

6. Eco-Friendly Insulation

Any type of insulation will theoretically be eco-friendly if it sufficiently cuts down on energy used for heating and cooling. However, some of this saving is negated if batts, fillers, and/or sprays used for insulation are not sustainably sourced or use toxic chemicals to help in binding and fire resistance.

As such, an increasingly popular alternative is hemp insulation. This sustainable product of up to 92% natural hemp maintains all of the same insulative properties of more traditional fiberglass or cellulose. In fact, with its ability to be compressed, hemp can even provide superior insulation for homes that are willing to pay a little extra.

Conclusion

The trend of eco-friendly homes is only set to strengthen in 2021 and beyond. Therefore, if you are in the market for a home, or are considering a renovation, take a look at one of the six sustainable listed above for some environmentally-friendly inspiration.

Matt Lee is the owner of the Innovative Building Materials blog and a content writer for the building materials industry. He is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that save money, improve energy efficiency, and increase property value.

How To Make Sustainable Practices Profitable

Written By: Benjamin Laker
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For decades, the idea that sustainable business practices could lead to profitability has been dismissed. However, with increased pressure from stakeholders and government legislation in recent years, companies are compelled to find ways to reduce their environmental impact while maintaining economic competitiveness. Right now, sustainability is quite rightly top of the agenda, amid the backdrop of the 2021 United Nations Climate Change Conference, more commonly referred to as COP26.

Most people don’t realize that waste is a resource with an economic value and recycling can be a profitable practice say experts.

The environmental impact of organizations and the states they reside in are scrutinized more strongly than ever, ensuring customers and employees do not compromise the ability of future generations to meet their own needs and consequently design a world without waste. At present, nearly 65% of greenhouse gas emissions arise just from handling materials’ production, transportation, and disposal. But a circular economy may significantly reduce 90% of the emissions, thus departing from a linear economy to one that builds circularity into products from the outset is paramount. 

ReCyrcle specializes in this area. Designed to support a waste-free world aligned with the “shared blueprint for peace and prosperity” from the UN Sustainable Development Goals, the innovative tech startup offers a revolutionary recycling system that follows a circular economy approach. “We want to prevent and reduce the waste accumulation of recyclable materials in landfills and change society’s mindset towards waste,” Samreen Nurullah, cofounder and director, told me.

ReCyrcle offers a revolutionary recycling system that follows a circular economy approach

She continued, “collection of the materials directly from the consumers through our app allows us to track the entire process and ensure that these materials do not leak into the environment.” Nurullah’s business partner, Sharaf Rahman, added, “We recycle materials and process them into a usable and manufacturable form reducing the demand and need for virgin materials being extracted from the Earth’s crust.” In doing so, the organization is attempting to digitize the reverse supply chain of waste to make the process more efficient, transparent, and accountable.

ReCyrcle makes a critical assertion – they don’t believe that poor recycling rate isn’t a habit problem but is instead a perception problem. “Most people don’t realize that waste is a resource with an economic value and recycling can be a profitable practice,” observes Rahman. “Our app encourages people to recycle by offering rewards and incentives for recycling in the form of digital tokens.”

The mobile app shows the journey of a plastic bottle and post-consumer packaging waste from the point of collection to being processed into new products so a user can track their recycling habits and buy products made from their recycled packaging waste. This could well be a watershed moment for the future of corporate sustainability, particularly because within countries such as the UK, where the government has delayed plans to implement the Deposit Return Scheme for recycling until late 2024. “We understand the climate emergency and have come up with our private digital deposit return scheme, which can be claimed through our app,” concludes Rahman.

ReCyrcle reprocesses 3D printer waste into recycled filaments to be reused in 3D printing again

Companies like to bucket. Purpose belongs to corporate social responsibility, while the customer belongs to the brand. But here’s the problem with those buckets, concludes Nurullah. Your customers are whole people seeking mission and brand engagement. They expect you to deliver what matters most to them. “Embrace your customer’s mindset, the holistic understanding of their heads and hearts, to deliver on brand and purpose,” recommends Nurullah. Because as companies embrace stakeholder capitalism, they risk subjecting themselves to what besets the nonprofit sector—the tendency to think every stakeholder is a customer, which confuses their strategic aim. Therefore, understanding if your organization is substantially differentiated or even relevant is mission-critical – and the key to entrepreneurial performance, which in the case of ReCyrcle, is impressive. 

That’s not to say they haven’t had help along the way, of course. For example, Rahman explained at length the impact of support that Brunel University’s Bridging the Gap program has had on the organization. “They’ve aided us throughout our journey, and we have recently started collecting 3D printing waste from their design facilities as the curbside municipal recycling programs do not recycle 3D printing waste,” he said. ReCyrcle reprocesses this waste into recycled filaments to be reused in 3D printing again.

This is a key component when thinking about starting a business, says Dr. Marrisa Joseph, Lecturer in Entrepreneurship at Henley Business School. Startups and increasingly established companies have moved away from thinking about what product or service I could offer. Instead, thinking has evolved to what I could create that my potential customer would want, or even better, what they need and how it will impact the planet.

The triple bottom line concept- people, planet, profit- has become an increasingly sought-after value proposition as businesses thrive when they have a greater purpose. That unique nexus is the source of differentiation and the cornerstone of your differentiation strategy. Embracing it requires that you appreciate them as whole people. What matters the most to your customer is what matters the most to you too. Watch out for the zone of indifference, and don’t build your strategy around it.

Every company has attributes and features near and dear to its hearts. Perhaps it’s the origin story, the internal rally cry, or their hometown. Be forewarned. You cannot compete on differentiation by claiming unimportant attributes to your customer. Your customer’s tell-tale shrug is the evidence that what you hold dear can’t deliver a differentiated advantage. And with the case of ReCyrcle, they certainly have it.

Why scaling investment is crucial for sustainable development

Written By: Ahmet Burak Dağlıoğlu
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Mobilizing financial resources will play an important role in reaching the sustainable development goals.



  • Global organizations are cooperating on scaling investment to help achieve sustainability goals.
  • Investment promotion needs to change to target sustainable investments, particularly to help reach climate goals.
  • Turkey is implementing this approach by making the SDGs central to its foreign direct investment strategy.

Climate change has been on the international agenda for a long time, but recent developments have upped the urgency of taking immediate action for both humanitarian and developmental reasons. World leaders gathered in Glasgow to discuss climate change at the United Nations Climate Change Conference COP26, following the G20 summit in Rome in late October, which also prioritized sustainability.

Keeping climate change at bay through mitigation and adaptation is imperative to achieving the Sustainable Development Goals (SDGs), which were set by the United Nations in 2015 and made social, economic and environmental sustainability central to economic development.

Achieving the SDGs will, in turn, require an integrated approach and close cooperation among all stakeholders. Mobilizing financial resources will play an especially important role in reaching the SDGs and addressing the adverse effects of climate change. In this regard, foreign direct investment (FDI) has been a significant source of external finance for many countries, especially developing economies, to help achieve sustainable economic development.

Commitment to SDGs can mobilize foreign direct investment

Today, all economies vie for greater FDI inflows as it not only brings capital but also generates employment, transfers technology, and helps move up the value chain. Moreover, FDI can be instrumental in a country’s economic transformation towards a greener economy, as multinational corporations (MNCs) have both the financial wherewithal and technical capacity to help transform local operations to greener global best practices. MNCs have been increasingly incorporating environmental, social and governance (ESG) principles into their investment strategies, not only to achieve ESG investor score targets but also to save costs and mitigate risks, helping achieve both more sustainable and more profitable operations.

The international community is putting more efforts into scaling such investments through establishing effective mechanisms to support cooperation on investment issues, such as the planned World Investment for Development Alliance, which can facilitate collaboration on public-private projects to scale sustainable investment. One important dimension of such scaling is for countries to create a favorable environment to attract “Green FDI” in order to help achieve environmental and climate goals.

Through smart and targeted policies, sustainable investment can make significant contributions to a country’s economic development, including Green FDI to help reduce carbon emissions.—Ahmet Burak Dağlıoğlu

Unless host countries are attractive enough for such investments, MNCs will hesitate to invest there, especially in a time when attracting FDI is becoming increasingly difficult due to unexpected challenges such as the COVID-19 pandemic, policy uncertainty from increasing protectionism, economic shocks, and geopolitical risks. Moreover, the growing inclusion of sustainability clauses into new generation trade and investment agreements by major trading blocs will also affect MNCs’ location choices. Therefore, in order to make the best use of FDI in the aftermath of the pandemic, investment agencies should recalibrate their strategies and position themselves as promoters and facilitators of sustainable investment.

Through smart and targeted policies, sustainable investment can make significant contributions to a country’s economic development, including Green FDI to help reduce carbon emissions. Incorporating the SDGs into a country’s FDI attraction strategy can thus bring benefits across society. Therefore, FDI practitioners and policymakers should develop novel strategies that are more inclusive and SDG-oriented.

How Turkey is contributing to sustainable investments

Cognizant of that we, as the Investment Office of Turkey, have recently revised our FDI strategy and made SDGs one of the main pillars of our investment promotion and attraction policies. We have also incorporated “impact investments” into Turkey’s national development agenda. Through an extensive engagement with national and international stakeholders, “impact investments” have become a priority for private and public sectors in Turkey.

Together with the United Nations Development Program(UNDP), we co-published a series of reports on The Impact Investing Ecosystem in Turkey and SDG Investor Map Turkey, providing a guide for the private sector to perform diligence and make impactful business decisions. After these successful initiatives, Turkey’s Impact Investing Advisory Board was established to mobilize government agencies and private sector stakeholders to develop a state-of-the-art regulatory framework. Establishing such a national impact management framework will standardize the measurement and control across all sectors, which will incentivize impact investing and boost the performance of impact investors.

Success is contingent on going beyond defining certain metrics and standards or appeasing shareholders. Implementation, monitoring, and assessments are essential to creating real impact through sustainable investments. Therefore, national and international efforts to establish strong mechanisms for implementing impact investments and attracting Green FDI must be backed up through collaboration and partnership at every level.

International organizations, such as The United Nations Conference on Trade and Development (UNCTAD), UNDP, and Organisation for Economic Co-operation and Development (OECD), and the World Economic Forum have been playing an important role in creating effective platforms for cooperation. National institutions should continue to engage with these organizations in order to adapt their local investment ecosystems to the changing international investment trends, practices, and opportunities. We are all facing global challenges that require global solutions, and cooperation is a sine qua non requirement to find sustainable solutions for the problems that are threating humanity.