Your Building, Your Advantage

In recent years, sustainability disclosure policies have expanded rapidly across the globe. In addition to the United States and the European Union, countries such as New Zealand, China, Brazil, Nigeria, Hong Kong and Singapore have introduced mandatory climate disclosure rules and it is expected that many more will follow. According to the World Resources Institute, 40 percent of the world’s economy will be covered by climate-related disclosure rules.

Despite political resistance and rollback of climate policies in some countries, many businesses and regions have reaffirmed their commitments to the Paris Agreement. A Verdantix survey showed that over half of their 338 respondents will continue with their sustainability goals. Additionally, a BDO survey found that 47 percent of CFOs believe their investment in environmental, social and governance (ESG) strategies will increase in the next 12 months.

The built environment is responsible for 40 percent of global CO2 emissions – a figure that could double by 2050 if left unchecked. Especially if traditional linear approaches, which lead to rapid resource depletion and increased waste, are continued instead of circular models. Buildings alone account for one-third of global energy use. Recognizing the urgency, COP27 called on countries to join the Buildings Breakthrough – an intergovernmental operational framework focused on driving key international action that aims to establish near-zero emission and resilient buildings as the global standard by 2030.

The built environment’s decarbonization challenge

The International Energy Agency (IEA) notes that more effort is needed to reduce emissions in the building sector. Major economies, such as China, Japan, United Kingdom, India, Australia, the European Union and the United States, are already tightening their energy performance requirements for new and existing buildings. These regulations generally require buildings to become more energy efficient or even net zero. In 2022, global investments in building energy efficiency rose by approximately 14 percent, exceeding USD $250 billion. Maintaining this growth in investment could position the sector to meet the annual investments required by 2030 to achieve net zero.

While these regulations and investments contributed to a decrease in direct CO2 emissions from buildings in 2022, indirect CO2 emissions (production of electricity and heat used in buildings) increased. On top of this, it is expected that the global floor area will increase by approximately 15 percent, consequently intensifying energy demand. Simultaneously, to achieve net zero emissions by 2050, the energy intensity of the buildings sector needs to decline five times faster in this decade compared to the previous decade.

This global challenge is also reflected at the national level, where countries are identifying key sectors to target for emissions reductions. According to the UK’s Climate Change Committee, non-residential buildings were responsible for 5 percent of national emissions in 2023. Yet this sector could almost completely decarbonize through electrification, energy efficiency measures and low-carbon electricity supply. For example, in 2022 nearly half of energy demand in buildings was used for space and water heating and nearly two-thirds of heating energy still relies on fossil fuels. Electrifying these systems could yield significant emissions reductions. In addition, energy and building management systems can account for 60 percent of emissions reductions. Replacing gas and oil-based catering equipment with electric alternatives could contribute a further 9 percent by 2040. Clean, efficient, electric technologies also mean reduced air pollution and lower energy bills.

Improving energy efficiency and circularity of building envelopes remains another critical opportunity, especially given the long lifetime of buildings, and the cost of construction and eventual deconstruction. Approximately two-thirds of the global building floor area that exists today will still be in use by 2040. Yet in 2022, the average retrofit rate was just 1 percent, with energy intensity reduced by less than 15 percent per building. To achieve net zero by 2050, all new and retrofitted buildings should be zero-carbon-ready by 2030. However, as of 2020, only 5 percent of new buildings met this standard. Embedding circular economy principles into both new construction and retrofits can help close this gap, ensuring buildings are adaptable, flexible and generate minimal waste, while also reusing materials from deconstructed buildings to reduce demand for new resources.

In theory, technologies available today are able to achieve nearly all required emissions reductions. Still, a multitude of complex issues – such as affordability, market availability, policy frameworks and behavioral changes in consumers – make full implementation a challenge. In this context, FMs can lead the net-zero transition by turning decarbonization into an opportunity rather than a compliance task. To maximize impact, they should deepen their data expertise – analyzing and translating emissions, climate risk and energy use insights into targeted actions that drive measurable results.

Smart building management systems such as IoT-enabled integrated workplace management systems (IWMS) are essential for operationalizing sustainability. These platforms use real-time data to automate and optimize lighting, HVAC, occupancy, and maintenance, improving energy efficiency and reducing emissions. These technologies can also help reduce waste, maximize resource use and play a crucial role in transforming traditional linear economic models into sustainable, circular systems. When combined with electrification and envelope upgrades, smart systems help organizations align with tightening energy regulations, building circularity and net-zero targets. Importantly, they also generate the reliable, granular data needed to support ESG reporting and inform strategic decision-making.

Unlocking the power of data

A solid but perhaps surprising step to support obtaining accurate data is creating a sustainability report. Sustainability reporting, guided by disclosure frameworks, enables transparency, benchmarking, progress tracking, and refinement of net-zero strategies.

Although this may now sound straightforward, composing a sustainability report remains a complex process. All ESG components must be accounted for, including accurate emission data per portfolio, building, space or even asset.

Navigating multiple regulatory jurisdictions can feel overwhelming, but many mandatory disclosure frameworks have overlapping requirements that can simplify compliance. In some cases, disclosure frameworks can highlight weaknesses in existing data strategies. Automation accelerates and improves data collection by linking reporting platforms with external sources, such as energy suppliers or utility providers. Integrated solutions can make reporting much easier and less error prone. Centralizing data in an integrated platform improves reliability, traceability and source capturing. It also streamlines reporting, provides easy progress updates, uncovers opportunities for improvement and drives strategic decision-making. Rigorous insights enable FMs to demonstrate sustainability impacts, build business cases and justify investments – especially where sustainability is not yet a strategic priority.

However, more data does not always equal the right data or more accurate actions towards better sustainability performance. As data collection technologies become more accessible, organizations risk gathering too much data without a clear purpose. Once sustainability goals are defined based on the initial data collection, they should guide future data collection efforts – ensuring that new data supports decision-making and measurable progress.

Beyond compliance: The business case for sustainability

Mandatory reporting may be a catalyst, but it should not be the only motivator. A recent Globescan report highlights how organizations that embed ESG into their core strategy unlock tangible business value – from stronger reputations and stakeholder relationships to increased sales and efficiency, cost savings, and supply chain resilience. A BDO survey found that 91 percent of organizations integrating sustainability expect higher revenue in 2025, compared to just 74 percent of those that don’t. Similarly, CDP estimates that addressing supply chain climate risks could generate up to $165 billion in financial gains.

Additional research shows that organizations applying environmental principles save millions in production costs and boost sales through resource traceability. Adopting circular economy practices can also generate substantial savings, as optimizing resource use and transforming waste into valuable inputs reduce both raw material and waste management costs. The business benefits also extend to talent attraction: a recent survey found that most people prefer employers with a positive environmental and social impact, and nearly half of Gen Z and Millennial respondents would accept lower salaries to work for a values-aligned organization.

Investors are equally attuned. Ninety-three percent believe climate change will impact investment performance, and many rely on disclosure frameworks to identify low-risk, sustainable businesses. A Harvard survey confirms this shift – 51 percent of respondents view climate risk disclosure equally as important as financial reporting.

Capturing this value, however, requires more than compliance or reporting. It demands integrated, cross-functional collaboration. Especially in a world where corporate directors are being held personally responsible for sustainability inaction, they will expect greater collaboration within their organization to achieve results. FMs cannot drive sustainability alone. Finance must embed ESG in budgeting and capital allocation, ensuring sustainability initiatives are both strategic and financially viable. IT must deliver tools for data collection, automation and analysis, to enable tracking and optimization of sustainability initiatives. Additionally, emerging topics such as the environmental footprint of data centers and AI are now integral to the sustainability agenda. Risk officers must assess climate exposure and reputational threats. Procurement must integrate circular economy criteria into its policies, selecting suppliers who follow circular principles and choosing products designed for longevity and recyclability. Also, other departments like R&D and marketing must translate strategy into action.

Ultimately, strong collaboration – often led or coordinated by FMs – ensures shared ownership of sustainability goals, streamlines data across the business, and empowers every function to contribute to net-zero outcomes. In this way, sustainability becomes a lever not just for compliance, but for long-term competitive advantage.

Conclusion

Despite shifting political landscapes and delayed reporting deadlines, the imperative for sustainability – and the role of facility professionals therein – remains clear: to improve living and working conditions by delivering measurable, sustainable business value.

As the built environment becomes central to climate action, FMs are uniquely positioned to lead the transition to net-zero buildings. By leveraging data, smart building technologies and cross-departmental collaboration, they can turn compliance obligations into long-term strategic advantage.