Environmental IQ

Productivity gains from energy efficiency and sustainability/

By Vivienne Reiner

15 November 2012

Indoor environment quality is emerging as a new focus for green buildings and environmental upgrades, the Profitable Sustainability conference heard this week.

Keynote speaker John Goins, research specialist, with the Center for the Built Environment at the University of California, Berkeley – which has been leading the world on IEQ – said environmental measures needed to move beyond the focus on design to embrace operational management for the life of the building and that high green ratings in the US did not mean significantly better indoor quality.

The Australian Property Institute/Property Funds Association joint conference also heard that the innovative financing model, Environmental Upgrade Agreements -being rolled out in a number of local councils – can be used to improve any element of sustainability including IEQ.

Energy efficiency can be improved significantly by focusing on the indoor environment, with tenants most commonly complaining about airconditioning (too cold in summer, too hot in winter). In particular, people prefer the temperature inside to follow the seasons, rather than remaining at the same temperature year-round, surveys have found.

It is no wonder then that productivity is affected by sub-optimal environments, with a recent survey by Ernst & Young in Australia finding almost one fifth of an employee’s working day is wasted on tasks deemed to be not productive and a 2008 United States Ginsberg workplace survey showing respondents believe they are more than 20 per cent more productive in a good working environment.

Other studies have shown performance generally decreases 1-2 per cent for every degree above or below 21.6C and that noise affects the speed with which tasks are carried out. But even energy-efficient buildings could have bad outcomes where tenants were not given control or did not know how to use devices to increase indoor comfort.

Goins used as an example a LEED Platinum building in which tenants complained about glare and brought in their own fans.

Goins explained that indoor environment quality, or IEQ is something people pay for, just like a good experience at the movies, whether they know it or not. Exclusive brands tend to use airconditioning liberally in outlets to create a feeling of luxury and, conversely, buildings with deteriorating indoor quality become increasingly obsolete in terms of rental returns and ability to attract tenants.

However, just making a place cooler — to reflect brand status or because of a perception that this increases worker concentration — may not have the desired effect: “In many organisations if there’s a sense that the organisation doesn’t care about energy then employees think, ‘why should I?’” Goins said. As well, this tends to be seen as reflective of a lack of corporate social responsibility in other areas.

In addition to temperature, the other most commonly cited complaints are air quality, noise and maintenance. Where air quality is concerned, people like to feel some air movement, particularly in warm weather. Having maintenance operations to complain or make suggestions to also improves perceptions of the indoor environment.

Interestingly, the Center for Build Environment’s analysis has found air quality is the one variable that improves significantly in buildings with high LEED green ratings in the US. This is perhaps reflective of newer buildings as well as the fact that LEED includes a focus on air quality.

In a panel after Goins’s presentation, Sydney University’s Professor Richard de Dear outlined details of the IEQ lab which he heads and was recently launched, with a three-year research project focusing on the Australian environment.
One issue he highlighted was that leases tended to specify temperatures be set at 21.5C or 22C. These were written by people with little understanding of IEQ, he said.  Instead set temperatures should be programed to drift with the seasons. He said temperature should be adaptive, using as an example Local Government Super’s 120 Sussex Street — the lowest energy intensity building in Sydney’s CBD — which has negotiated the temperature be increased to about 24C.

Productivity gains from energy efficiency and sustainability

From left, John Goins, Matthew Clark, Robert Milagre, Richard de Dear and Simon Fox with MC Roger Walker

Robert Milagre, project leader of Green Star Performance for the Green Building Council of Australia, said IEQ had always been a part of Green Star — and was currently worth about 18 per cent of the total Green Star score. But with Green Star – Performance, the GBCA is moving into assessing the operational performance of buildings.

Another newly emerging area — Environmental Upgrade Agreements — is proving a win/win for building owners and tenants. Following Melbourne’s lead, Parramatta is the first local government area to take up the NSW seeding funding for arrangements whereby very competitively priced financing is secured based on projected future income from the upgrade. At 10 Valentine Avenue, tenants approached the building owner to carry out a lighting retrofit of the ageing building and projections under the EUA put the tenant’s lighting energy use savings at 75 per cent and reduced energy bills by about 25 per cent. The tenants agreed to contribute up to 40 per cent of the cost to realise the substantial savings, thereby contributing to the investment that will also improve the building’s valuation.

Commenting during a panel on case studies of sustainable buildings, Local Government Superannuation Scheme’s property portfolio manager Brian Churchill said because of rising standards and increasing regulations, “the business case for sustainability upgrades [based on energy efficiency] is getting a bit blurry”. He said greener buildings only tended to attract a slight premium and that tenants are not engaged enough.

Churchill earmarked IEQ as the next frontier and predicted its popularity would increase markedly as the number of buildings rated for IEQ increased. At LGS’s 120 Sussex Street upgrade, in addition to achieving the highest possible NABERS Energy rating, IEQ improved considerably. Independent testing by CETEC showed a 4 per cent increase in productivity, representing a gain of $1.05m annually.