Green Legislation & The Commercial Built Environment

Across the EU, the Corporate Sustainability Reporting Directive (CSRD) and the Energy Performance of Buildings Directive (EPBD) have become the driving factors for corporate climate strategy, while the UK equivalent is contained within The Environment Act. The end result is that building owners (and tenants for that matter) can no longer afford to put their carbon footprint on the long finger. 

When it comes to evaluating the environmental impact of commercial buildings, Energy Use Intensity (EUI) has emerged as the most important metric in assessing energy performance. EUI measures the total amount of energy used by a building in a year divided by its floor area and is measured in kWh/m². 

Let’s begin by looking at the significance of EUI in the context of recent Environmental, Social, and Governance (ESG) legislation and the role it is set to play in the commercial built environment. 

‍Recent Legislation & EUI Targets

In July 2021, the Climate Action and Low Carbon Development (Amendment) Act was enacted in Ireland, signalling a commitment to substantial reductions in greenhouse gas emissions by 2030 and 2050. This legislation provides the basis from which a comprehensive framework for achieving these targets can be set.

Moreover, at the European level, CSRD is a legislative measure aimed at enhancing sustainability reporting by companies throughout the EU. Widespread greenwashing practices (where companies make misleading claims about their ESG performance to boost their reputation) have undermined the credibility of ESG reporting. This has made it challenging for both governments and stakeholders to accurately gauge true progress towards sustainability in the built environment. CSRD addresses this problem head-on by requiring companies to disclose their impact on a wide range of measures, the most important of which for commercial building owners being in-use energy performance, as measured by EUI.

EPBD sets stringent EUI targets for commercial buildings to achieve as well as the timeline in which to do it. It requires public buildings to achieve net zero by 2028 as well as achieve at least energy performance class E by 2027 and D by 2030. All new buildings should also be equipped with solar technologies by 2028, where technologically suitable and economically feasible.

This means that building owners need to take measures now to drastically improve their energy performance and lower their emissions. 

‍Energy Optimisation & Paris Proof Targets

Achieving these EUI targets is inextricably linked to Paris Proof Targets, which in turn are set to ensure that carbon emissions are reduced in line with the aims of The Paris Agreement. These differ somewhat by sector, but by way of example, the EUI targets for base building energy in existing office buildings are 55 kWh/m²/yr by 2030 and 30 kWh/m²/yr by 2050. 

If you’re interested in taking a deep dive into the subject, the UK Green Building Council provides the best guidance on energy performance targets for the built environment in the UK, with the Irish Green Building Council due to publish their equivalent framework in the very near future. 

‍What Does This Mean For Commercial Property Owners? 

To meet these climate targets, commercial property owners, particularly those with office spaces, need to develop a sustainability roadmap that prioritises energy performance and achieving their EUI targets. For most, this will require substantial improvements in HVAC energy efficiency.

Currently, 75% of the buildings in the EU are falling short of these performance indicators, due to a number of challenges from the performance gap to year-round cooling demand. 

As a result, building owners need to make greater efforts to optimise their energy use and reduce their building’s EUI to align with the legislative framework as well as the aim of a more sustainable future. Green building ratings like LEED and BER, while important, no longer sufficiently tick enough boxes — the efficient and measurable use of energy, as demonstrated by EUI, is the new (and future) measure of success.

‍Achieving EUI Targets Ahead of Schedule

1 Cumberland Place, part of Hibernia REG’s €1.5 billion office portfolio in Dublin, was already a highly energy-efficient building, having achieved LEED Platinum rating in 2018. The owners sought to take its energy performance to the next level by focusing on optimising their HVAC system.

Symphony Energy implemented a Smart Optimisation programme at 1 Cumberland Place managing to significantly reduce its gas and HVAC electricity demand by 75%. Upon completing the project, Hibernia REG had not only met but exceeded their 2030 Paris Proof target for the building. Now, they only need to replace the existing boiler with an energy-efficient heat pump to achieve their 2050 target — 26 years ahead of schedule.

By focusing on HVAC performance and implementing next-generation climate tech, it is now very achievable for commercial property owners to meet and exceed their sustainability targets and reduce their carbon footprint.

Want to learn more about our project at 1 Cumberland Place? Read the full case study here.