August 2016

The Power of Data Visualisation in Profiling MEES Risks and Opportunities

August 25, 2016/in Compliance, Data, Sustainability /by Nick Hogg

My colleague Ed Gabbitas recently wrote a blog post titled ‘Why MEES is Changing Behaviour Two Years Ahead of the Compliance Date’. In that post, Ed highlighted some of the challenges around the accuracy and variable quality of some EPCs as well as some broader implications for the sector. In light of the potential adverse impact that MEES could have on some key value drivers, it is imperative that property owners have a clear fund or portfolio view of their EPC risks.

The obvious starting point is to understand where the gaps are. Fortunately, many organisations have started this process already by looking at the extent of EPCs most at risk across their funds / portfolios. A prerequisite to carrying out this analysis is having a single, central database that stores all of the key information in a consistent format.

Those companies that have participated in GRESB will know well that to be able to easily answer the questions relating to extent of portfolio coverage relies on all the key parameters such as EPC scores and an accurate record of associated floor area covered being stored in a consistent format to easily get an aggregated view. If this is stored in a multitude of tenancy schedule spreadsheets it can be an extremely time-consuming process in ensuring that the fund picture is accurate. For voluntary reporting such as GRESB, the effect of getting it wrong might be a dent in scores. However, in the context of MEES, the risks are potentially much more significant – i.e. the inability to let space and therefore negatively impact on income streams.

This is something that we have been able to help a number of clients with through the use of SIERA – our proprietary sustainability management software – to reduce manual intervention and improve the efficiency of storing EPC information in a systematic manner so that information is not overlooked.

Assuming that you have all your EPC information in one place the next step is to prioritise actions for managing the potential risks. This may include identifying which EPCs should be re-modelled for example or identifying particular units or properties for improvement to ensure they are MEES compliant. Regardless of what specific actions are taken, an efficient means of profiling EPCs will help make the task easier.

In the case of one of our clients we profiled the assets of a fund to identify the lettable space most at risk of MEES; the units in the example below represented around 69% of rental income and 51% of total lettable area at a particular asset, which ‘could’ have been un-lettable from April 2018 unless action was taken. We carried out an extensive EPC re-modelling exercise to produce new EPCs.

The before and after scenarios are markedly different, showing a really good result. This example is just one improvement case study amongst a fund of where we had profiled many EPCs using the powerful visualisation tools in SIERA. For example with SIERA’s EPC profiling module, you can edit key visualisations of EPCs against ERV and lease expiry to dial in on particular sets of assets/units and create reports. Both our consultants and clients have benefitted massively from the efficiency of being able to very easily profile against key parameters to customise analyses to inform decision making.

Simplified sample EPC Profile Analysis from SIERA:

To speak to our experts about MEES, SIERA, or any other topics, please don’t hesitate to get in touch.

Scotland’s Approach to Building Energy Efficiency

August 19, 2016/in Compliance, Energy, News & Views /by Paul Sutcliffe

This post originally appeared here on the UKGBC blog, to which we are regular contributors.

Scotland’s ‘competitor’ to the much publicised Minimum Energy Efficiency Standards (MEES), due to be introduced in England and Wales in 2018, has been finalised and will be introduced next month. The approach is markedly different to the plans in place for the rest of the UK.

The scheme in summary

In Scotland, building owners who plan to sell or lease space will need to comply with the new regulations for units over 1,000 square metres in size, from 1 September 2016[1]. An energy performance certificate (EPC) is required, as usual. However, an Action Plan must also be established to identify energy saving opportunities. Action Plans can be issued by qualified Section 63 Advisors (many EPC assessors are in the process of gaining this additional accreditation) who use approved software to calculate improvements. The software has been developed to consider the feasibility of seven improvement opportunities.

Draught-stripping windows and doors
Upgrading lighting controls
Adding central timer controls to the heating system
Insulating hot water storage
Improving lighting
Improving insulation
Replacing boilers if existing units are older than 15 years

Following completion of the Action Plan the owner can then decide to implement the relevant measures or produce an operational energy rating in the form of a Display Energy Certificate (and maintain this on an annual basis). Owners have 12 months to decide which approach to take and have a further 3.5 years to implement improvements if progression of the Action Plan is chosen as the approach.

Exemptions

It is also important to note that buildings constructed in accordance with a building warrant applied for on or after 4 March 2002 are exempt (for now)[2] – although there is a likelihood that this date will change over time to bring more assets into the scheme. In many cases, exemption due to date of construction will be clear. However, this rule has already raised questions.

For example, will a recently refurbished unit located in a building constructed prior to 2002 be exempt?

Consideration will need to be made on a case-by-case basis. The software used to generate EPCs and Action Plans will identify whether the unit meets the exemption criteria or not. As a result, the first part of the process, the EPC assessment, will need to be completed before the requirement for an Action Plan can be confirmed.

The Challenges

The approach, at first glance, seems practical.

Seven sensible improvement measures have been identified that, if feasible, need to be considered for implementation, and the bar has been set at the relatively low level of 2002 building warrant standards. However, practical challenges remain.

Take the following scenario:

An owner wants to let an old (pre 2002) and large (over 1,000 square metre) office building on a Full Repairing and Insuring (FRI) basis. The EPC and subsequent Action Plan will be produced. To continue to comply, the owner will need to produce either a Display Energy Certificate or progress the implementation of the Action Plan. However, lease structures for most FRI buildings will prevent compliance (as the owner will not have access to data and will not be able to implement improvements).

To ensure compliance, owners of such buildings will need to ensure lease clauses are in place that require single-let FRI tenants to provide energy performance data to owners, as a minimum.

As a priority, landlords should review their portfolios and develop compliance plans to prevent problems in future.

[1] Units under 1,000 square metres will still need to produce an EPC, but will not be required to progress further.

[2] Transactions that are exempt from requiring an EPC are also exempt from additional action plan requirements.

If you have any questions, please don’t hesitate to get in touch.

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Health and Wellbeing – The Next ‘Sustainability’?

August 18, 2016/in News & Views, Sustainability /by EVORA

As a society, more and more of us are adopting city lifestyles and increasingly spending a greater proportion of our time inside (an estimated 90% of our day inside buildings), without thinking too much about how we interact with those buildings and vice-versa.

Along comes the concept of ‘health and wellbeing.’ A phrase that initially sounds insubstantial to most, but has been established by a rush of recent research discussing the benefits it can bring to building occupiers. With the likes of GRESB, UKGBC, WELL conducting research, quantifying and discussing health and wellbeing, this looks to be the next big topic grabbing business’ attention. We look to see where the value lies in businesses adopting health and wellbeing, or whether this is just the next hollow buzzword across the industry.

So, what does this all mean? Health and wellbeing revolves around two basic principles:

Altering building aspects (e.g. daylight, air quality, thermal control community space) for a more productive work environment. Shown in Figure 1 as the ‘physiological’ factors, altering the ways which our body reacts to the environment it is in.
The incorporation of operational schemes into working environments (flexible working, learning opportunities). The ‘psychological’ aspects, those that affect our mental attitude in the working environment.

The case for Health and Wellbeing

1. Financial Value

One of the main arguments in favour of the concept is the general acceptance that most of us are more productive working in well-lit, thermally comfortable offices with good air quality as opposed to dark, dingy spaces – with this improved workspace encouraging the greater productivity of staff and, in turn, generating greater returns from staff.

With staff costs typically accounting for around 90% of overall operating costs (Figure 2 below), maintaining employee productivity through health and wellbeing measures can provide substantial monetary value for all businesses, regardless of size.

2. Health and Welfare

Perhaps a fairly obvious point to most of us, but the correlation between health and happiness is an aspect that should not be overlooked for the value it can bring to businesses. Healthier staff are typically associated with lower levels of absenteeism, deductions in sickness leave and higher retention levels in the jobs/buildings which enhance this (PwC UK, 2008).

3. Attract Talent and Business

This is more of a long-term influence. While improvements can be made to the satisfaction levels and retention of current employees and tenants, aspects such as the incorporation of community space, ergonomic work spaces and transport links (which are all associated as health and wellbeing metrics) are also considered as attractive ‘pull factors’ for work environments – attracting new staff and clients to businesses/buildings.

Accreditation

While research into health and wellbeing metrics is increasingly conducted, criticism arises in the lack of tangible ways to measure the progress of improvement measures put into place. While building aspects provide an easier method of measurement (for example, air quality samples can be regularly taken with IAQ meters); operational schemes, such as additional community space, are not so easily measured.

And so comes the introduction of the WELL Standard. A scheme developed by Delos, after 7 years of research, to add a measure, best practice and a benchmark to the concept. The standard is lengthy – 238 pages – covering the seven core aspects of air, water, nourishment, light, fitness, comfort and mind. While the adoption of the WELL Standard has been slow in the UK, with only 4 registered WELL projects, its outlook to provide a measurement to this increasingly discussed topic will undoubtedly see that is acts as a major player in this growing field.

Who are the real drivers?

With a number of benefits being thrown around by many, excitement is growing for this new up-and-coming trend – but where is this excitement coming from? Health and wellbeing is a principle that is driven by and for building occupiers and, with many occupants never giving any thought to the concept before, it could be that the missing link to this all is engagement with tenants throughout the process.

To date, health and wellbeing is typically only driven through large institutions, who generally view the trend as another way to differentiate the services they provide. This raises questions to the practical relevance of health and wellbeing – if changes in associated aspects/schemes will be relevant across a multitude of building dynamics and to SME’s, as well as large institutions.

Looking ahead…

At present, health and well-being is held back by a number of questions surrounding the tangible ways to measure and monitor attributed aspects and the practical relevance of the trend. While aspects such as access to exercise and the abundance of community space are consistently mentioned as key attributes to consider for health and well-being improvements, the psychological improvements which these bring to individuals are hard to monitor progress on. Buildings are also extremely dynamic, adding further complications in the lack of a ‘one model fits all’ approach.

Ultimately, the key issue continues to be – who is health and wellbeing for? Is this truly a no-brainer that all institutions should incorporate or is this just another case of an emerging buzzword with little substance? However important, health and wellbeing is an emerging trend throughout the industry that should not be ignored in passing and one which EVORA will continue to engage with, through our consultancy and market-leading sustainability software SIERA.

SIERA: A Case Study in Sustainable Project Development

August 3, 2016/in Data, Sustainability /by Pete Thirlby

Software development Rule No. 1:

“As long as you have users, your product will never be finished!”

When we began the SIERA project we knew that our journey would be one of continual improvement and continual change; our product would have to evolve to meet the demands of our clients, global reporting standards, a constantly changing regulatory environment and the challenges of working in different jurisdictions.

Our project methodologies and technology frameworks would, therefore, have to provide the flexibility needed to meet this constantly changing agenda. Part of my Technology Director role is to ensure that our development project is sustainable in terms of the tools we employ, the security of our environments, and the availability of resources to manage and develop our software.

Here’s how we achieve that:

Agile Project Methodology

The basis of Agile is to be close to the user and their requirements, and allows us to build and deploy a new release approximately every two weeks. This approach minimises the impacts associated with large amounts of change. It means that we are continually, incrementally, improving the software.

The key to Agile is communication. As a dispersed dev team in Glasgow, London, Swindon and Milton Keynes, we have a daily 15 minute scrum using Join.Me’s screen sharing, video and audio facilities.

Throughout the day (and night!) we are in touch through Slack, our collaboration platform. Project plans are kept in Trello and GanttPro and we share specifications across the team using Google Docs. Freshdesk is our ticket tracking software that can be used by clients and consultants to report faults. Our code is controlled and securely stored with Bitbucket, which allows multiple developers to work independently without getting in each other’s way.

All these tools are in the cloud and can be used on our mobile devices or PCs. It creates an environment where we are always in touch, able to seek out project documentation, and can keep tabs on progress and issues, wherever we are.

Virtual Infrastructure

We deliver SIERA through a ‘software as a service’(SaaS) model. Fundamentally, this means we deliver from a highly secure data centre accessible through the internet. Our servers are virtual machines e.g. not physical servers but a piece of server software running in a massively powerful physical server. We can flex the size of this server within minutes to meet demand by increasing the number of processors or amount of storage. The majority of our clients ‘share’ the same virtual server and database which brings massive economies of scale. It also allows them to instantly benchmark their portfolios – anonymously – against the hundreds of other asset details that we store. Some clients prefer their own server and we can facilitate this easily. In fact, we can ‘spin up’ a new server in under 60 minutes with all the software pre-installed and ready to go.

We take a belt and braces approach to backups; each server is ‘imaged’ once a day and, just in case our data centre went up in smoke (highly unlikely for an ISO27001 certified facility), all our data is backed up to a 3rd party every night.

Multi-tiered Technology

We have created a multi-tiered technical architecture to deliver SIERA. Each layer uses industry standard components. There are 3 elements to this:

Database (the bit that stores the data) – Microsoft SQL Server – Enterprise ready, used globally by thousands of organisations.
API (the bit that links the data to the user interface) – Microsoft .NET providing a RESTful interface. This is a standard for APIs. It makes SIERA an ‘open’ platform that can allow other software to talk to it in a widely understood way, given, of course, that the correct OAuth2 credentials have been provided. All of this takes place through a https:// web address that encrypts all the traffic between the client’s browser and our datacentre.
User Interface (the bit that the user works with) – we use Sencha, a javascript framework that is used by corporates and financial institutions across the world. It provides a rich toolset that accelerates the development process. It also allows us to deploy to PC, phones and tablets with minimal changes and with a common code base.

Subject Matter Expertise

Finally, the key to the success of our software is that its design is underpinned by the deep and detailed knowledge of our sustainability consultants. The origins of SIERA are ‘SDS’ (Sustainable Data Systems), a system that was developed to aid EVORA’s consultants with day-to-day data management processes and reports. SIERA has evolved from SDS and is now almost unrecognisable, but the core processes and reports still prevail, a testament to the solidity of the original design.

To learn more about SIERA or to see a demo of the software, please do not hesitate to contact our experts today.