Article Source: Harvard Business Review
Photo Credit: HBR Staff / Simone Hutsch / Sharon Pittaway / Unsplash
Two global crises — the Covid-19 pandemic and climate change — have forced us to rethink the way we operate buildings. But what happens when the precautions taken to combat each come into conflict? Business leaders not paying attention to these potential issues could soon be caught off guard.
Here’s the problem in a nutshell: Covid-19 is caused by a virus spread nearly entirely indoors in under-ventilated spaces. A key control strategy has been to bring in as much outdoor air as possible. What was once hand-wavy (“bring in more air!”) is now being codified. Late last year, a Lancet Covid-19 Commission Task Force comprised of experts from around the world put forth new enhanced targets for ventilation, in a move that marks the start of big changes. In the United States, for example, the CDC is developing new standards, and, most recently, under pressure from the White House, ASHRAE — the standard setting body for building systems — announced that it will release its own new standards for higher ventilation rates in buildings. This is important because ASHRAE standards ultimately become code.
However, bringing in more outdoor air comes with an energy cost and appears to be at odds with our climate goals. Buildings consume 40% of global energy — 70% in some major cities — and are thus a major contributor to global warming. So governments and businesses have put forth ambitious proposals to reduce that carbon footprint. New York City, Boston, and Seattle have all introduced new laws with aggressive energy-reduction targets for buildings, and just recently the United States announced a new “Federal Building Performance Standard” that targets 30% reductions in energy use.
Are healthy buildings and green buildings in conflict? The short answer is they don’t have to be. There is a path forward.
The Necessity of Both Movements
First, let’s recognize that we can’t favor one course of action over the other. Here’s why both are necessary.
Articles in top scientific journals like The New England Journal of Medicine, The Journal of the American Medical Association, The Lancet, and Science have made it crystal clear that airborne transmission is the dominant mode of spread for Covid-19, which has already killed more than a million Americans and is poised to kill more than 100,000 a year from now on, as well as many other respiratory diseases. Scientists, doctors, government officials, corporate leaders, and any well-educated person on the street now knows that fresher air means less community spread. Social and traditional media are on high alert for new or resurgent infectious diseases, from monkeypox and RSV to polio and influenza. And the public now has relatively cheap air quality sensors to assess how well your office, store, or factory is ventilated. Heightened awareness of respiratory disease means higher expectations for buildings. My neighbor now talks to me about MERV-13 filters.
The White House started with its Clean Air in Buildings Pledge, to which major technology, higher education, and commercial real estate companies and nonprofit groups have signed on, but it has since announced a holistic approach to improving indoor air quality: tax credits, new research dollars, walking the walk by requiring its portfolio of more than 1,200 federal buildings to adopt a healthy building strategy, and steering remaining American Rescue Plan (ARP) funds toward clean-air goals. This has prompted ASHRAE to say that it will put out new ventilation standards in six months (blazingly fast for this organization), and we can expect those guidelines to be adopted as code.
Finally, the business benefits of healthy buildings are becoming obvious. I previously wrote in HBR about the positive correlation between indoor air quality and cognitive function, where costs to implement are ($40 per person per year) are dwarfed by the productivity benefits ($6,500 per person per year). We’ve since had similar findings in a study of office workers across the United States and another year-long study of more than 300 people across six countries. In our book Healthy Buildings, John Macomber of Harvard Business School and I showed how investments in building health can lead to productivity gains that result in 10% improvements in organizational profitability. MIT researchers found that healthy properties rent at 4% to 7% more per square foot, and at a macroeconomic level, Lawrence Berkeley National Lab estimated that simple improvements to indoor air quality could generate more than $13 billion in benefits for the U.S. economy.
With pressure from the bottom up (the public), the top down (governments and standard-setting organizations), and outside (the scientific community), companies will find it difficult, if not impossible, to eschew the healthy building movement.
Of course, the same is true of energy-reduction efforts. Customers, employees, investors, and governments are all calling on corporations to reduce their carbon footprints, and buildings provide a huge opportunity.
Investors are leading the charge in demanding information on the sustainability performance of real estate. Consider GRESB, the Global Real Estate Sustainability Benchmark, a tool that now assesses and ranks more than 1,800 entities and is used by 170 institutional and financial investors with more than $51 trillion in collective assets under management.
Increasingly, buildings’ achievement of energy-efficient goals are not just a nice-to-have or something optionally reported, but a must-do. For example, new city-level mandates – like Local Law 97 in New York City, which aims to reduce building energy use 40% by 2030 and 80% by 2050 – comes with significant fines to building owners if they’re not met. Boston and Seattle’s rules are similar, and you can be sure other U.S. cities will follow.
There’s a pure business case for investing in energy-efficient buildings, too. My colleagues and I have estimated that over a 20-year period, U.S. companies that adopted green building standards saved a collective $6.7 billion in energy costs, not to mention the knock-on health benefits from reducing pollution, including averting hundreds of premature deaths and tens of thousands of missed workdays, which generated an additional $4 billion in savings. This green building movement has been led by U.S. Green Building Council’s LEED certification, but new initiatives like the World Green Building Council’s “Net Zero Carbon Buildings Commitment” are setting even more stringent goals.
All that to say, we’re seeing pressures on the climate side like those on the health side, with buildings in the middle of this tug-of-war.
So how do we optimize to benefit both health and climate?
Give your buildings a tune-up.
“Commissioning” is the process of making sure your building is performing the way it’s designed. I liken this to giving your car a tune-up. Everyone with a car knows that car performance slips over time. The same happens with buildings. We have design standards but not performance standards, and I guarantee your building is not performing the way it did on the day it opened, or even last year.
The good news is that giving your building a tune-up improves indoor air quality and saves energy and money. The process involves simple things like system cleaning, performance checks, leak checks, evaluation of wear-and-tear, general maintenance. Lawrence Berkeley National Laboratory estimates the cost to do this at $0.26 to $0.82 per square foot, but, with energy savings of 5% to 14%, this has an ROI of less than two years!
Maximize outdoor air.
Increased ventilation is one of the best strategies for reducing infectious disease transmission in buildings. It also comes with those cognitive function benefits and is associated with reduced worker absenteeism. Your employees will be less sick and perform better. It’s a no-brainer from a business decision-making standpoint. Adding heat-energy-recovery ventilation and heat-recovery ventilation – which recapture the energy and heat in air before it is exhausted from a building – should become commonplace.
Upgrade your filters.
The filters in your building are most likely MERV-8 filters, which are designed to protect equipment and capture about 20% of airborne particles. MERV-13 filters are designed to protect people and should be the new minimum, as the U.S. government just mandated for all federal buildings, because they capture 80% to 90% and are made with a low-pressure drop, meaning your HVAC fans won’t have to work too hard to push air through them and you won’t pay a significant energy penalty.
Deploy a real-time indoor air quality monitoring network.
This is key because it is the path to understanding how to optimize both health and energy in a building. Currently we are flying blind when it comes to building performance. Is outdoor air pollution causing a problem? Are you hitting these new ventilation targets? Confident that the air quality in your building is “safe”? (Confident enough to share this data with employees?)
Advances in new lower-cost, smart building sensor platforms are changing the game quickly, allowing us to verify the performance of indoor spaces and do things like demand-control ventilation, the process of adjusting airflow in a building based on occupancy using CO2. (Humans are the main source of CO2 indoors, so as we enter a room, the CO2 goes up. That means the ventilation rate should go up, too. But when we leave, we shouldn’t waste energy dumping loads of conditioned air into empty conference rooms.)
Work to electrify everything in your buildings.
As the country phases out coal-fired power plants, it’s clearing the air and revealing that on-site fossil fuel combustion in buildings is an important source of air pollutant emissions, including greenhouse gases. Converting to things like air-source and ground-source heat pumps, which use electricity for heating and cooling instead of oil or gas, allow buildings to capitalize on all that renewable energy planned for our electrical grid.
Use energy-efficient systems in buildings.
There’s a catch to the previous advice. Currently, electricity use is highest in summer due to air-conditioning. But our latest research showed that if all buildings convert to all-electric, we will shift to peak use in winter. (We call this ‘The Falcon Curve‘ because the plot of monthly energy use looks like a falcon with its wings up.) To flatten the curve, we must reduce energy demand in buildings as we electrify them.
Beyond the strategies already mentioned, there are others like exploring energy storage for peak-shaving (The Bank of America Tower at 1 Bryant Park in New York City uses a giant ice cube in the basement as a thermal battery!), using phase-change materials, and doing the basics like adding solar panels. The big picture is that there are a lot of existing technologies on the market, ready to go. Just as it isn’t acceptable to have a green building where people get sick inside, it doesn’t make sense to have a building with good indoor air quality that nevertheless damages our health by contributing to outdoor air pollution. We can and must have both.
Can it actually be done? Look no further than JPMorgan Chase’s new headquarters in midtown Manhattan, designed by Norman Foster, with (full disclosure) my team advising on healthy buildings strategies. It’s an all-electric tower, sourced with renewable energy, with double the minimum ventilation rate, MERV-13 filters, and a real-time air quality monitoring system. If you’re a company or developer planning a new building and failing to consider such features or unwilling to retrofit your existing buildings, you might not be able to attract capital or talent if you don’t consider climate or attract tenants or talent if you don’t consider health. You might thus be sitting on a stranded asset in the not-too-distant future.
Expectations have changed. Corporate buildings — whether executive offices, call centers, factories, or retail and hospitality venues — must be both healthy and green, safe and smart.