If forecasters predicting future costs of renewable energy were contestants on The Price Is Right, no one would be making it onstage.
Projections about the price of technologies like wind and solar have consistently been too high, leading to a perception that moving away from fossil fuels will come at an economic cost, according to a recent paper published in Joule.
“The narrative that clean energy and the energy transition are expensive and will be expensive—this narrative is deeply embedded in society,” Rupert Way, a study coauthor and postdoctoral researcher at the University of Oxford’s Institute for New Economic Thinking and at the Smith School of Enterprise and the Environment, told Emerging Tech Brew. “For the last 20 years, models have been showing that solar will be expensive well into the future, but it’s not right.”
The study found that a rapid transition to renewable energy is likely to result in trillions of dollars in net savings through 2070, and a global energy system that still relies as heavily on fossil fuels as we do today could cost ~$500 billion more to operate each year than a system generating electricity from mostly renewable sources.
Way said the authors were ultimately trying to start a conversation based on empirically grounded pathways, assuming that cost reductions for these technologies will continue at similar rates as they have in the past.
“Then you get this result that a rapid transition is cheapest. Because the faster you do it, the quicker you get all those savings feeding throughout the economy. It kind of feels like there’s this big misunderstanding and we need to change the narrative,” he said.
Expectation versus reality
Out of 2,905 projections from 2010 to 2020 that used various forecasting models, none predicted that solar costs would fall by more than 6% annually, even in the most aggressive scenarios for technological advancement and deployment. During this period, solar costs actually dropped by 15% per year, according to the paper.
The Joule paper took historical price data like this—but across renewable energy tech beyond just solar, including wind, batteries, and electrolyzers—and paired it with Wright’s Law. Also known as the “learning curve,” the law says costs will decline by a certain percentage as effort and investment in a given technology increase. In 2013, an analysis of historical price data for more than 60 technologies by researchers at MIT found that Wright’s Law most closely resembled real-world cost declines.
The researchers used this method to determine the combined cost of the entire energy system under three scenarios over time: A fast transition, in which fossil fuels are largely eliminated around 2050; a slow transition, in which fossil fuels are eliminated by about 2070; and no transition, in which fossil fuels continue to be dominant.
The team found that by quickly replacing fossil fuels with less expensive renewable tech, the projected cost for the total energy system in the fast-transition scenario in 2050 is ~$514 billion less than in the no-transition scenario.
And while the cost of solar, wind, and batteries has dropped exponentially for several decades, the prices of fossil fuels like coal, oil, and gas, when adjusted for inflation, are about the same as they were 140 years ago, the researchers found.
“These clean energy techs are falling rapidly in cost, and fossil fuels are not. Currently, they’re just going up,” Way said.
Renewable energy is not only getting less expensive much faster than expected, but deployments are outpacing forecasts as well. More than 20% of the electricity in the US last year came from renewables, and 87 countries now generate at least 5% of their electricity from wind and solar, according to the paper—a historical tipping point for adoption.
Even in its slowest energy-transition scenario, the International Energy Agency forecasts that global fossil-fuel consumption will begin to fall before 2030, according to a report released last week.
Way and the Oxford team found that a fast transition to renewable energy could amount to net savings of as much as $12 trillion compared with no transition through 2070.
The paper didn’t account for the potential costs of pollution and climate damage from continued fossil-fuel use in its calculations.
“If you were to do that, then you’d find that it’s probably hundreds of trillions of dollars cheaper to do a fast transition,” Way said.
Policy and investment decisions about how quickly to transition away from fossil fuels often weigh the long-term benefits against the present costs. But what this paper shows, Way said, is that a rapid transition is the most affordable regardless.
“It doesn’t matter whether you value the future a lot, or a little, you still should proceed with a fast transition,” he said. “Because clean energy costs are so low now, and they’re likely to be in the future, we can justify doing this transition on economic grounds, either way.”
May 9th of last year was supposed to be a typical day for solar power in west Texas. But around 11:21 a.m., something went wrong.
Large amounts of solar capacity unexpectedly went offline, apparently triggered by a fault on the grid linked to a natural gas plant in Odessa, according to the Electric Reliability Council of Texas (ERCOT). The loss of solar output represented more than 13 percent of the total solar capacity at the time in the ERCOT grid region, which spans most of the state.
While all of the solar units came back online within six minutes, the incident highlighted a persistent challenge for the power sector that experts warnneeds to be addressed as clean energy resources continue to displace fossil fuels.
“As in Texas, we’re seeing this huge boom in solar technology fairly quickly,” said Ryan Quint, director of engineering and security integration at the North American Electric Reliability Corporation (NERC). “And now, we’re seeing very large disturbances out of nowhere.”
Across the U.S., carbon-free resources make up a growing portion of the electricity mix and the vast majority of proposed new generation. This past summer, solar and battery storage systems helped keep the lights on in Texas and California as grid operators grappled with high power demand driven by extreme heat, according to grid experts.
Even so, while the disturbance last year near Odessa was unusual, it was not an isolated incident. If industry and regulators don’t act to prevent future renewable energy “tripping” events, such incidents could trigger a blackout if sufficiently widespread and damage the public’s perception of renewables, experts say.
The tripping event in Texas — which spanned 500 miles — and other, similar incidents have been tied to the inverters that convert electricity generated by solar, wind and battery storage systems to the power used on the grid. Conventional generators — fossil fuel power plants, nuclear plants and hydropower dams — don’t require inverters, since they generate power differently.
“We’re having to rely more and more on inverter technology, so it becomes more and more critical that we don’t have these systemic reliability risk issues, like unexpected tripping and unexpected performance,” Quint said.
Renewable — or “inverter-based” — resources have valuable attributes that conventional generators lack, experts say. They can ramp up and down much more quickly than a conventional power plant, so tripping incidents don’t typically last more than several minutes.
But inverters also have to be programmed to behave in certain ways, and some were designed to go offline in the event of an electrical fault, rather than ride through it, said Debra Lew, associate director of the nonprofit Energy Systems Integration Group.
“[Programming] gives you a lot of room to play,” Lew said. “You can do all kinds of crazy things. You can do great things, and you can do crappy things.”
When solar and wind farms emerged as a significant player in the energy industry in the 2000s and 2010s, it may have made sense to program their inverters to switch offline temporarily in the event of a fault, said Barry Mather, chief engineer at the National Renewable Energy Laboratory (NREL).
Faults can be caused by downed power lines, lightning or other, more common disturbances. The response by inverter-based resources was meant to prevent equipment from getting damaged, and it initially had little consequence for the grid as a whole, since renewables at the time made up such a small portion of the grid, Mather noted.
While Quint said progress is being made to improve inverters in Texas and elsewhere, others are less optimistic that the industry and regulators are currently treating the issue with the urgency it deserves.
“The truth is, we’re not really making headway in terms of a solution,” Mather said. “We kind of fix things for one event, and then the next event happens pretty differently.”
‘New paradigm’ for renewables?
NERC has sounded the alarm on the threat of inverter-based resource tripping for over six years. But the organization’s recommendations for transmission owners, inverter manufacturers and others on to how to fix the problem have not been adopted universally.
In August 2016, smoke and heat near an active wildfire in San Bernardino County, Calif., caused a series of electrical faults on nearby power lines.That triggered multiple inverters to disconnect or momentarily stop injecting power into the grid, leading to the loss of nearly 1,200 megawatts of solar power, the first documented widespread tripping incident in the U.S.
More than half of the affected resources in the California event returned to normal output within about five minutes. Still, the tripping phenomenon at the time was considered a “significant concern” for California’s grid operator, NERC said in a 2017 report on the incident.
The perception around some of the early incidents was that the affected solar units were relatively old, with inverters that were less sophisticated than those being installed today, said Ric O’Connell, executive director of the GridLab, a nonprofit research group focused on the power grid. That’s why last year’s disturbance near Odessa caused a stir, he said.
“It’s come to be expected that there are some old legacy plants in California that are 10, 15 years old and maybe aren’t able to keep up with the modern standards,” O’Connell said. “But [those] Texas plants are all pretty brand new.”
Following the May 2021 Odessa disturbance, ERCOT contacted the owners of the affected solar plants — which were not publicly named in reports issued by the grid operator — to try to determine what programming functions or factors had caused them to trip, said Quint of NERC. Earlier this year, ERCOT also established an inverter-based resource task force to “assess, review, and recommend improvements and mitigation activities” to support and improve these resources, said Trudi Webster, a spokesperson for the grid operator.
Still, the issue reemerged in Texas this summer, again centered near Odessa.
On June 4th, nine of the same solar units that had gone offline during the May 2021 event once again stopped generating power or reduced power output. Dubbed the “Odessa Disturbance 2” by ERCOT, the June incident was the largest documented inverter-based tripping event to date in the U.S., involving a total of 14 solar facilities and resulting in a loss of 1,666 megawatts of solar power.
NERC has advocated for several fixes to the problem. On the one hand, transmission owners and service providers need to enhance interconnection requirements for inverter-based resources, said Quint. In addition, the Federal Energy Regulatory Commission should improve interconnection agreements nationwide to ensure they are “appropriate and applicable for inverter-based technology,” Quint said. Finally, mandatory reliability standards established by NERC need to be improved, a process that’s ongoing, he said.
One challenge with addressing the problem appears to be competing interests for different parties across the industry, said Mather of NREL. Because tripping can essentially be a defense mechanism for solar, wind or battery units that could be damaged by a fault, some power plant owners might be wary of policies that require them to ride through all faults, he said.
“If you’re an [independent system operator], you’d rather have these plants never trip offline, they should ride through anything,” Mather said. “If you’re a plant owner and operator, you’re a bit leery about that, because it’s putting your equipment at risk or at least potentially at risk where you might suffer some damage to your PV inverter systems.”
Also, some renewable energy plant owners might falsely assume that the facilities they own don’t require much maintenance, according to O’Connell. But with solar now constituting an increasingly large portion of the overall electric resource mix, that way of thinking needs to change, he said.
“Now that the industry has grown up and we have 100 megawatt [solar] plants, not 5 kilowatt plants, we’ve got to switch a different paradigm,” he said.
Sean Gallagher, vice president of state and regulatory affairs at the Solar Energy Industries Association, stressed that tripping incidents cannot be solved by developers alone. It’s also crucial for transmission owners “to ensure that the inverters are correctly configured as more inverter-based resources come online,” Gallagher said.
“With more clean energy projects on the grid, the physics of the grid are rapidly changing, and energy project developers, utilities and transmission owners all need to play a role when it comes to systemwide reliability,” Gallagher said in a statement.
Overall, the industry would support “workable modeling requirements” for solar and storage projects as part of the interconnection process — or, the process by which resources link up to the grid, he added.
‘Not technically possible’
The tripping challenge hasn’t gone unnoticed by federal agencies as they work to prepare the grid for a rapid infusion of clean energy resources — a trend driven by economics and climate policies, but turbocharged by the recent passage of the Inflation Reduction Act.
Last month, the Department of Energy announced a new $26 million funding opportunity for research projects that could demonstrate a reliable electricity system powered entirely by solar, wind and battery storage resources. A goal of the funding program is to help show that inverter-based resources can do everything that’s needed to keep the lights on, which the agency described as “a key barrier to the clean energy transition.”
“Because new wind and solar generation are interfaced with the grid through power electronic inverters, they have different characteristics and dynamics than traditional sources of generation that currently supply these services,” DOE said in its funding notice.
FERC has also proposed a new rule that draws on the existing NERC recommendations. As part of a sweeping proposal to update the process for new resources to connect to the grid, FERC included two new requirements to reduce tripping by inverter-based resources.
If finalized, the FERC rule would mandate that inverter-based resources provide “accurate and validated models” regarding their behavior and programming as part of the interconnection process. Resources would also generally need to be able to ride through disturbances without tripping offline, the commission said in the proposal, issued in June.
While it’s designed to help prevent widespread tripping, FERC’s current proposal could be improved, said Julia Matevosyan, chief engineer at the Energy Systems Integration Group. Among other changes, the agency should require inverter-based resources to inject so-called “reactive power” during a fault, while reducing actual power output in proportion to the size of the disturbance, Matevosyan said. Reactive power refers to power that helps move energy around the grid and supports voltages on the system.
“It’s a good intent. It’s just the language, the way it’s proposed right now, is not technically possible or desirable behavior,” Matevosyan said of the FERC proposal.
To improve its proposal, FERC could draw on language used by the Institute of Electrical and Electronics Engineers (IEEE) in a new standard it developed for inverter-based resources earlier this year, she added. Standards issued by IEEE, a professional organization focused on electrical engineering issues, aren’t enforceable or mandatory, but they represent best practices for the industry.
IEEE’s process is stakeholder-driven. Ninety-four percent of the 170 industry experts involved in the process for developing the latest inverter-based resource standard — including inverter manufacturers, energy developers, grid operators and others — approved the final version, Matevosyan said.
The approval of the IEEE standard is one sign that a consensus could be emerging on inverter-based resource tripping, despite the engineering and policy hurdles that remain, observers said. As the industry seeks to improve inverter-based resource performance, there’s also a growing understanding of the advantages that the resources have over conventional resources, such as their ability to rapidly respond to grid conditions, said Tom Key, a senior technical executive at the Electric Power Research Institute.
“It’s not the sky is falling or anything like that,” Key said. “We’re moving in the right direction.”
Urban activities — think construction, transportation, heating, cooling and more — are major sources of greenhouse-gas emissions. Today, a growing number of cities are striving to slash their emission to net zero — here’s what they need to do.
By: Deepa Padmanaban View the original article here
Global temperatures are on the rise — up by 1.1 degrees Celsius since the preindustrial era and expected to continue inching higher — with dire consequences for people and wildlife such as intense floods, cyclones and heat waves. To curb disaster, experts urge restricting temperature rise to 1.5 degrees, which would mean cutting greenhouse gas emissions, by 2050, to net zero — when the amount of greenhouse gases emitted into the atmosphere equals the amount that’s removed.
More than 800 cities around the world, from Mumbai to Denver, have pledged to halve their carbon emissions by 2030 and to reach net zero by 2050. These are crucial contributions, because cities are responsible for 71 percent to 76 percent of global carbon dioxide emissions due to buildings, transportation, heating, cooling and more. And the proportion of people living in cities is projected to increase, such that an estimated 68 percent of the world’s population will be city dwellers by 2050.
“Urban areas play a vital role in climate change mitigation due to the long lifespans of buildings and transportation infrastructures,” write the authors of a 2021 article on net-zero cities in the Annual Review of Environment and Resources. Are cities built densely, or do they sprawl? Do citizens drive everywhere in private cars, or do they use efficient, green public transportation? How do they heat their homes or cook their food? Such factors profoundly affect a city’s carbon emissions, says review coauthor Anu Ramaswami, a professor of civil and environmental engineering and India studies at Princeton University.
Ramaswami has decades of experience in the area of urban infrastructure — buildings, transport, energy, water, waste management and green infrastructure — and has helped cities in the United States, China and India plan for urban sustainability. For cities to get to net zero, she tells Knowable, the changes must touch myriad aspects of city life. This conversation has been edited for length and clarity.
Why are the efforts of cities important? What part do they play in emissions reductions?
Cities are where the majority of the population lives. Also, 90 percent of global GDP (gross domestic product) is generated in urban areas. All the essential infrastructure needed for a human settlement — energy, transport, water, shelter, food, construction materials, green and public spaces, waste management — come together in urban areas.
So there’s an opportunity to transform these systems.
You can think about getting to net zero from a supply-side perspective — using renewable, or green, energy for power supply and transport — which is what I think dominates the conversation. But to get to net zero, you need to also shape the demand, or consumption, side: reduce the demand for energy. But we haven’t done enough research to understand what policies and urban designs help reduce demand in cities. Most national plans focus largely on the supply side.
You also need to devise ways to create carbon sinks: that is, remove carbon from the atmosphere to help offset the greenhouse gas emissions from burning fossil fuels.
These three — renewable energy supply, demand reduction through efficient urban design and lifestyle changes, and carbon sinks — are the broad strategies to get to net zero.
How can a city tackle demand?
Reducing demand for energy can be through efficiency — using less energy for the same services. This can be done through better land-use planning, and through behavior and lifestyle changes.
Transportation is a great example. So much energy is spent in moving people, and most of that personal mobility happens in cities. But better urban planning can reduce vehicle travel substantially. Mitigating sprawl is one of the biggest ways to reduce demand for travel and thus reduce travel emissions. In India, for example, Ahmedabad has planned better to reduce urban sprawl, compared to Bangalore, where sprawl is huge.
Well-designed, dynamic ride sharing, like the Uber and Lyft pools in the US, can reduce total vehicle miles by 20 or 30 percent, but you need the right policies to prevent empty vehicles from driving around and waiting to pick up people, which can actually increase travel. These are big reductions on the demand side. And then you add public transit and walkable neighborhoods.
Electrification of transportation — the supply side — is important. But if you only think about vehicle electrification, you’re missing the opportunity of efficiency.
Your review talks about the need to move to electric heating and cooking. Why is that important?
There’s a lot of emphasis on increasing efficiency of devices and systems to reduce these big sources of energy use, and thus emissions — heating, transport and cooking. But to get to net zero, you also have to change the way you provide heating, transport and cooking. And in most cities, heating and cooking involve the direct use of fossil fuels.
For example, house heating is a big thing in cold climates. Right now, we use natural gas or fuel oil for heating in the US, which is a problem because they are fossil fuels that release greenhouse gases when they are burned. With many electric utilities pledging to reduce the emissions form power generation to near-zero, cities could electrify heating so that the heating system is free of greenhouse gas emissions.
Cooking is another one. Some cities in the US, like New York City and others in California, have adopted policies that restrict natural gas infrastructure for cooking in new public buildings and neighborhood developments, thereby promoting electric cooking. Electrifying cooking enables it to be carbon-emissions-free if the source of the electricity is net zero-emitting.
Many strategies require behavior change from citizens and public and private sectors — such as moving from gasoline-powered vehicles to lower-emission vehicles and public transport. How can cities encourage such behaviors?
Cities can offer free parking for electric vehicles. For venues that are very popular, they’ll offer electric vehicle charging, and parking right up front. But more than private vehicles, cities have leverage on public vehicles and taxi fleets. Many cities are focusing on changing their buses to electric. In Australia, Canberra is on track to convert their entire public transit fleet to electric buses. That makes people aware, because the lack of noise and lack of pollution is very noticeable, and beneficial.
The Indian government is also offering subsidies for electric scooters. And some cities across the world are allowing green taxis to go to the head of the line. Another incentive is subsidies: The US was offering tax credits for buying electric cars, for example, and some companies subsidize car-pooling, walking or transit. At Princeton, if I don’t drive to campus, I get some money back.
The main thing is to reduce private motorized mobility, get buses to be electric and nudge people into active mobility — walking, biking — or public transit.
How well are cities tackling the move to net zero?
Cities are making plans in readiness. In New York City, as I mentioned, newly built public housing will have electric cooking and many cities in California have adopted similar policies for electric cooking.
In terms of mobility, California has among the world’s largest electric vehicle ownership. In India, Ola, a cab company similar to Uber, has made a pledge to electrify its fleet. The Indian government has set targets for electrifying its vehicle sector, but then cities have to think about where to put charging stations.
A lot of cities have been doing low carbon transitions, with mixed success. Low carbon means reducing carbon by 10 to 20 percent. Most of them focus entirely on efficiency and energy conservation and will rely on the grid decarbonizing, but that’s just not fast enough to get you to net zero by 2050. I showed in one of my papers that even in the best case, cities would reduce carbon emissions by about 1 percent per year. Which isn’t bad, but in 45 years, you get about a 45 percent reduction, and you need 80-plus percent to get to net zero. That means eliminating gas/fossil fuel use in mobility, heating and cooking, and creating construction materials that either do not emit carbon during manufacturing or might even absorb or store carbon.
That’s the systemic change that is going to contribute to getting to net zero, which we define in our Annual Review of Environment and Resources paper as at least 80 percent reduction. The remaining 20 percent could be saved through strategies to capture and store carbon dioxide from the air, such as through tree-planting, although the long-term persistence of the trees is highly uncertain.
Are there notable case studies of cities you could discuss?
Denver has been covering the most sectors. Some cities cover only transportation and energy use in buildings, but Denver really quantified additional sectors. They even measured the energy that goes into creating construction materials, which is another thing the net zero community needs to think about. Net zero is not only about what goes on inside your city. It is also about the carbon embodied in materials that you bring into your city and what you export from your city.
Denver was keeping track of how much cement was being used, how much carbon dioxide was needed to produce that cement, called embodied carbon; what emissions were coming from cars, trucks, SUVs and energy use in buildings. They measured all of this before they did any interventions.
The city has also done a great job of transitioning from low-carbon goals (for example, a 10 percent reduction in a five-year span) to deep decarbonization goals of reducing emissions by 80 percent by 2050. During their first phase of low-carbon planning back in 2010, they counted the impact of various actions in each of these sectors to reduce greenhouse gas emissions by 10 percent below 1990 baselines, through building efficiency measures, energy efficiency and promotion of transit, and were successful in meeting their early goals.
Denver is also a very good example of how to keep track of interventions and show that it met its goals. If the city did an energy efficiency campaign, it kept track of how many houses were reached, and what sort of mitigation happened as a result.
But they realized that they’re never going to get down to net zero because, while efficiency and conservation reduce gas use for heating and gasoline use for travel, it cannot get them to be zero. So in 2018, they decided that they’re now going to do more systemic changes to try to reduce emissions by 80 percent by 2050, and monitor them the same way. This includes systemic shifts to heating via electric heat pumps and shifting to electric cars as the electric grid also decarbonizes.
So it’s counting activities again: How many electric vehicles are there? How many heat pumps are you putting into the houses that can be driven by electricity rather than by burning gas? How many people adopt these measures? What’s the impact of adoption?
What you’re saying is that this accounting before and after an intervention is put in place is very important. Is it very challenging for cities to do this kind of accounting?
It’s like an institutional habit — like going to the doctor for a checkup every two years or something. Someone in the city has to be charged with doing the counting, and so many times, I think it just falls off the radar. That was what was nice about Denver — and we worked with them, gave them a spreadsheet to track all these activities.
Though very few cities have done before and after, Denver is not the only one. There are 15 other cities showcased by ICLEI, an organization that works with cities to transition to green energy.
I have worked with ICLEI-USA to develop protocols on how to report and measure carbon emissions. One of the key questions is: What sectors are we tracking and decarbonizing? As I mentioned at the start, most cities agree with tackling energy use in transportation and building operations, and greenhouse emissions from waste management and wastewater. ICLEI has been a leader in developing accounting protocols, but cities and researchers are realizing that cities can do more to address construction materials — for example, influencing choice between cement and timber, which may even store carbon in cities over the long term.
I serve on ICLEI-USA’s advisory committee for updating city carbon emission measurement protocols, and I recommend that cities also consider carbon embodied in construction materials and food, so that they can take action on these sectors as well.
But we don’t have the right tools yet to quantify all the major sectors and all the pathways to net zero that a city can contribute to. That’s the next step in research: ways to quantify all those things, for a city. We are developing those tools in a zero-carbon calculator for cities.
Over the past few years, several startups have released one-off solar-powered concept vehicles, but up until now, we have yet to receive a mass-produced solar-powered car. It looks like that will change soon with the introduction of the Lightyear 0—an electric sedan that gets its power from the sun.
Lightyear is a Dutch startup that has an ambitious goal to start production of the Lightyear 0 this fall with the first deliveries starting in November. The Lightyear 0 features 5 square meters of double-curved solar arrays that can charge the electric vehicle while it’s driving or parked outdoors. The solar panels can add up to 43 miles (70 kilometers) of range a day in addition to its estimated 388 miles (625 kilometers) on Europe’s WLTP cycle.
This means drivers can literally drive for months without having to use an outlet or public charger. Lightyear estimates people who drive an average daily commute of about 22 miles, could go up to seven months between charges. Lightyear estimates the solar panels can add up to 6,835 miles (11,000 kilometers) of range per year.
“Today is the day we’ve all been waiting for since us five co-founders sat in a kitchen sketching out our dream of building the most sustainable car on the planet,” says Lightyear co-founder and CEO Lex Hoefsloot. “In 2016, we only had an idea; three years later, we had a prototype. Now, after six years of testing, iterating, (re)designing, and countless obstacles, Lightyear 0 is proof that the impossible is actually possible.”
In addition to its groundbreaking solar panels, the Lightyear 0 also stands out from current EVs with its four in-wheel motors. The electric motors generate a combined 174 horsepower and 1,269 pound-feet of torque, which can accelerate the Lightyear 0 from 0-62 mph in 10 seconds and a top speed of 100 mph.
With an energy use of 10.5 kWh per 62 miles (100 kilometers), Lightyear says it is the most efficient electric vehicle and its drag coefficient of less than 0.19 makes it the most aerodynamic family car yet. Although the Lightyear 0 is more than 16.4 feet long, it only weighs 3,472 pounds.
Inside the Lightyear 0 focuses on sustainability and minimalism with naturally-sourced and vegan materials, like microfiber suede seats and rattan palm detailing. Its interior also features a 10.1-inch touchscreen infotainment system that runs the Android Auto operating system.
Hoefsloot said in a statement that the Lightyear 0 is unique from electric vehicles: “Electric cars are a step in the right direction, but they have a scaling problem. By 2030, we can expect 84 million electric vehicles (EVs) on roads in Europe alone. There’s no hiding from it, access to charging stations will not keep up with the demand for electric cars. To minimize plug-charging and maximize range, the industry’s strategy, so far, has been to add batteries. That increases the carbon footprint of production and, in turn, boosts weight and the need for high-power charging stations. Our strategy flips that approach. Lightyear 0 delivers more range with less battery, reducing weight and CO₂ emissions per vehicle.”
The company only plans to build 946 Lightyear 0 vehicles a year. It hasn’t announced the market distribution.
The Lightyear 0 is definitely not cheap with a starting price of €250,000 ($263,243 USD), which means accessibility will be a barrier to entry for most consumers. The good news is the company is also working on a second model that will better appeal to the mass market with its €30,000 ($31,589 USD) starting price. Production of its second EV will begin in late 2024 or early 2025.
There’s still much to be seen with the Lightyear 0. While the most sustainable way to view car ownership is to not own a car, the reality is many people need vehicles in their day-to-day lives and Lightyear’s concepts spotlight innovation in the car space.
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?
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.
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.
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.
The conversation within and beyond the boardroom around environmental, social, and governance (ESG) is rapidly maturing. In recognition of the important role ESG plays in driving long-term value creation, more and more boards are focused on and are disclosing how their governance structure is evolving to consider ESG more intentionally. Having a defined plan for overseeing the integration of ESG and the interconnectedness across the pillars of “E”, “S”, and “G” into strategy and disclosure helps demonstrate the significance and prioritization of ESG efforts from the top, to both investors and broader stakeholders.
Amid this shift in board governance, investors continue to increase expectations on climate and ESG matters, as noted by the number and breadth of shareholder proposals on related issues in the 2021 proxy season. As investors update and finalize their proxy voting guidelines for 2022, there is the potential for more votes to be cast against board directors who do not demonstrate an adequate understanding of ESG and sufficient disclosure.
Change is also coming quickly on the regulatory front. The SEC has disclosed its regulatory agenda and has included four important areas that fall under the ESG umbrella: climate change, cyber risk governance, board diversity, and human capital management; proposed rules are expected in early 2022. The SEC also has begun to focus more on ESG-related comment letters. In late September, the commission issued a “Dear CFO” letter that provided a sampling of the types of comments issued about climate change and sustainability disclosures, with a particular emphasis on the consistency of climate-related risk disclosures and the relevance to financial reporting.
In addition, there has been significant movement toward the global convergence of standards. The IFRS Foundation announced at the UN Climate Change conference in Glasgow in early November the formation of the International Sustainability Standards Board (ISSB), which will consolidate the Climate Disclosure Standards Board and the Value Reporting Foundation (which includes the Integrated Reporting Framework and Sustainability Accounting Standards Board (SASB) Standards) by June 2022. The global ISSB standards are intended to elevate sustainability standard setting to be in line with that of financial reporting and accounting, and will promote transparency and consistency in sustainability disclosures to better inform decision-making for users of general-purpose financial reporting.
Other standard-setting entities enhancing their involvement in ESG include FASB, which has released a staff educational paper on the intersection of ESG matters with financial accounting standards; and the Commodity Futures Trading Commission, which has established a climate risk unit. With the pace of the ESG developments expected to accelerate rapidly in 2022, company management and boards should be focused on enhancing governance structures and the control environment around managing, and overseeing, ESG risks and opportunities and delivering high quality disclosure.
Trends in board governance of ESG
The “G” in ESG pertains to the broader corporate governance policies and practices that a company has put in place, and ESG is a significant area of focus for boards to better understand and oversee. As a starting point, the board should define its governance structure, policies, and practices that provide a framework for overseeing ESG accountability and strategic focus. This includes the structuring of board and committee oversight and the associated delegation of responsibilities.
Building on our 2020 initial research in this area, as highlighted in figure 3 (see PDF), there was a marked increase in 2021 in the percentage of S&P 500 companies disclosing in their proxies the primary committee(s) overseeing ESG relative to last year (from 72% to 86%). This trend likely is the result of companies progressing along an ESG maturity model (see figure 1 in PDF) that is more integrated into their core business strategy and risk program and defining how the board oversees such ESG efforts.
Notably, the 35 companies newly added to the S&P 500 this past year (see figure 2 in PDF) were more than twice as likely not to have disclosed the committee overseeing ESG, suggesting that company size and market expectations may have an impact on the formalization of an ESG governance framework.
When compared by industry (see figure 4 in PDF), energy, resources, and industrials (ER&I) companies continued to lead, with 94% of ER&I S&P 500 companies disclosing their governance approach in the proxy. This is not unexpected given the industry’s longstanding focus on employee health and safety and environmental matters, coupled with significant regulatory requirements. In the wake of the pandemic, there has also been strong upward movement in life sciences and health care industry proxy disclosure from 63% to 82%, and a similar trajectory has been seen in the technology, media, and telecommunications industry.
Despite the overall increase in proxy disclosure, there continues to be significant variation in the committee(s) that oversee ESG. The percentage of boards utilizing their nominating and governance committee for primary oversight has grown significantly. Not surprisingly, several companies have changed the nominating and governance committee’s name to be more transparent about the broader committee purview. In the callout boxes, within the PDF, we provide a sampling, from S&P 500 proxies, of some of the tailored committee names within the general nominating and governance category as well as some name variations with the ESG/Sustainability category.
Another trend and shift from last year’s research is an increase in the number of companies disclosing that the full board and a committee or multiple committees have a role in overseeing ESG elements (categorized as “multiple”). As ESG programs evolve and specific elements of the “E” and “S” are defined, a shared governance model whereby certain committees are delegated a specific ESG remit evolves. As an example, for many companies, human capital management initiatives, including diversity and inclusion initiatives, may fall under the “S” category and be allocated to the compensation, management development committee, or its equivalent talent committee, while corporate responsibility initiatives may be overseen by the governance committee. The trend for companies to disclose how the full board or committees are delegated certain ESG oversight responsibilities can effectively enable the board to execute on its fiduciary responsibility.
Only 1% of S&P 500 companies reported that the audit committee was the primary committee overseeing ESG for both years. While this is not surprising, following the shared governance model, the audit committee has certain important roles in ESG efforts, including the following:
Audit committees should understand whether there are appropriate internal and disclosure controls and procedures for the metrics disclosed, whether in an SEC filing or a separate sustainability report. This includes working closely with other committees to understand how ESG risks are identified and prioritized and how materiality is defined.
The audit committee should understand the companies’ ESG program—its interconnectedness across the pillars of “E”, “S”, and “G” and the related goals and metrics—and how management considers ESG strategies and the impact they may have on the financial statements.
As the development of companies’ integration of ESG into strategy and disclosure objectives continues to evolve and marketplace standards become more established and authoritative, the role of internal audit and the value of assurance as a tool to drive trust and confidence in ESG performance will become central. Assurance can provide a strong signal to investors and other stakeholders regarding the quality and reliability of disclosures. Audit committees should take the lead in overseeing the assurance engagement. The committee may consider inquiring with management about engaging with public company auditors on how to evolve and mature its ESG programs to meet the increasing demands of the market and regulators.
ESG’s integration into reporting and disclosure continues to proceed rapidly, and having a defined ESG plan and governance structure is increasingly an expectation rather than an exception, particularly for large public companies. Accordingly, boards will likely need to recalibrate their oversight to accommodate these changes and meet the requirements of regulators, investors, and other stakeholders. Given growing scrutiny and market expectations, companies are realizing value and identifying opportunities more quickly and confidently through a more rigorous ESG governance and data measurement and reporting process. Audit committees should consider adding ESG matters as a standing agenda item in 2022, understand the company’s disclosure process, and regularly assess the company’s progress, risk oversight, financial statement implications, and the integration of ESG considerations into the core business strategy.
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:
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:
Reclaimed, recycled or sustainable wood
Plant-Based Polyurethane Rigid Foam
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”.
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.”
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.”
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.”
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
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.
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.
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.
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.
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.
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.
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.”
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.
Written By: Benjamin Laker View the original article here
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.
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.
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.
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.
Written By: Ahmet Burak Dağlıoğlu View the original article here
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.