4 ways sustainable infrastructure can bolster business goals
Energy efficiency provides an attractive, low-risk return on investment.
March 24, 2023 By Hassaan Khan
March 24, 2023 – With buildings being responsible for almost 40% of annual global CO2 emissions, building owners and operators are beginning to understand the critical role they will play in the coming years to ensure a thriving future for their communities. Improving the efficiency of these buildings is the first step on the road to decarbonization because—unlike many other sustainability-driven investments—energy efficiency provides an attractive, low-risk return on investment.
However, reducing emissions and waste while generating financial benefits aren’t the only reasons for investing in sustainable infrastructure projects. These endeavours can also benefit business operations across organizations; and smart business leaders know it. From improved comfort and reliability to better patient care and student success, the benefits of these projects can be far reaching and materially impact the strategic goals of the organization.
The Johnson Controls Energy Efficiency Indicator Survey found that 62% of organizations around the world expect to increase investments in energy efficiency, renewable energy, or smart building technology in 2022. These organizations understand that making investments in infrastructure upgrades—like updated lighting, heating and cooling, water and connected communications systems—drives energy efficiency, productivity, economic growth, streamlined operations and cost-savings across industries.
The business benefits of sustainable projects
1. Energy efficiency
For many, energy efficiency is being driven by greenhouse gas emissions reductions—but energy-efficient infrastructure is far-reaching. It includes water conservation, energy use reductions, and energy production within facilities—all of which can boost business operations in addition to helping the environment.
The Canadian Department of National Defence (DND) addressed its energy consumption to meet regulations and improve its operations. In 2021 alone, the DND completed four projects centred on increasing energy efficiency to reduce long-term utility spending within the department. The most recent of these—a multiphase project to be completed at CFB Halifax—aims to reduce GHG emissions by 23%, or 15,000 tons, and generate $3 million in yearly savings.
DND will achieve this goal by reducing the operating times of existing equipment through controls optimization. These upgrades include variable frequency drives (VFDs) and occupancy sensor integrations, operational schedules, setpoint adjustments, CO2 sensors and control point additions across over 100 facilities.
In addition to driving energy efficiency and GHG reductions, the modernized infrastructure will improve comfort for DND team members—both military and civilian—and deliver long-term cost efficiencies.
2. Modernized infrastructure
Building methods and technologies have come a long way in recent years, and facility managers are beginning to understand that the physical environment in which a company operates can directly impact its technological and logistical capabilities. By investing in state-of-the-art connected systems, building owners are investing in the health of their building infrastructure and the comfort of their occupants for years to come.
Take, for example, the latest in healthcare technology. Hospitals are going digital, and both patients and doctors will reap the benefits. The next generation of hospitals will run on connected, sustainable solutions that improve occupant health, comfort and satisfaction to provide better healthcare experiences. Hospital managers are investing in advanced information technology to provide highly visible, easy-to-navigate, interactive patient care.
Connected building solutions offer real-time information on energy efficiency, maintenance operations and space performance to improve asset performance, lighten the load on staff, and streamline patients’ experiences.
3. Savings, savings, savings
The savings that come with consuming less energy, water, and other resources are significant. With the rising cost of energy, facility operators and owners know just how much they’re spending on powering buildings each year, and those bills can be staggering. Even relatively modest upgrades can save organizations tens of thousands of dollars in energy spending each year.
For example, the Brandon School Division in Manitoba recently undertook a sustainability project that aimed to save the district money by reducing energy consumption. After performing a detailed audit of existing fixtures, the district opted to install LED lighting in its facilities. This one change—a retrofit of the lighting fixtures in two key areas—is estimated to generate more than $50,000 in savings annually while reducing energy consumption by more than 876,000 kWh per year.
The school district can take these savings and put them into school resources to provide students and staff with the tools they need to succeed.
4. Reliable, resilient physical environments
Efficiency-focused improvements and retrofits that replace out-of-date infrastructure elements with newer, more reliable models extend equipment life and increase resiliency within facilities. An initial investment in equipment that will stand the test of time can relieve pressure on budgets down the line, allowing businesses to focus their efforts on generating revenue rather than performing maintenance.
Furthermore, updating business-critical electrical infrastructure to modern, smart solutions helps businesses safeguard operations against grid failures that are out of their hands—especially in provincial utility markets where there are significant peak-demand savings or opportunities to monetize any excess energy their microgrid generates. Businesses that invest in onsite generating assets are taking a proactive approach to mitigate the negative effects of future disasters, putting success in their own hands.
Funding the upgrades
As is often the case, the price tag on sustainable infrastructure upgrades can be prohibitive to organizations looking to embark upon or improve their sustainability initiatives. It’s no secret that construction projects are expensive and can require a significant upfront investment.
However, partnering with experts in sustainable infrastructure can make innovative funding mechanisms available to organizations of any kind. These mechanisms provide businesses across a range of industries with the freedom to pursue infrastructure upgrades despite budgetary constraints.
Meantime, guaranteed savings and performance contracts protect organizations from risk when undertaking upgrades by passing the costs to a third party who has the experience designing and operating energy-efficient buildings. Under these contracts, the construction and consultancy partner assumes the upfront costs of the upgrades and guarantees a baseline level of savings that can be used to pay for the work over time.
Should the buildings underperform during the project period, the third party is responsible for the shortfall—not the organization itself.
Canadian companies can also look to public and private organizations offering grants to businesses interested in sustainable upgrades. In 2022, the Canada Infrastructure Bank worked with several energy services companies to commit more than $125 million to accelerate private sector decarbonization retrofit projects across the country. Buildings across Canada—whether commercial, industrial, manufacturing or multi-residential—can leverage these low-cost funds to make facilities smarter, safer and healthier for occupants without impacting their existing budgets or balance sheets.
All of the above options can allow businesses to invest in their futures while alleviating any risk that may come with investing in a more sustainable model. Regardless of the funding model a business chooses, the benefits of the investment will be the same: modernized operations that cost less. The fact of the matter is that businesses that want the benefits of sustainable infrastructure really have nothing to lose by pursuing them—and they have a lot to gain.
Hassaan Khan is the area general manager, Sustainable Infrastructure–Canada, for Johnson Controls.
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