According to Jon Clarke general manager of smart building technology for Dexus, scope 3 mandatory reporting of carbon emissions is on the way. That’s well and good, he says, but alongside, the property industry needs backup policies and minimum compliance standards to support this enormous shift.
Jon, whose background includes consulting to Google on their Building Operating Systems (BOS) program, is the latest addition to The Fifth Estate’s “tools and tactics” sustainability reporting masterclass on Tuesday. He’s set to provide valuable and influential views on the real world problems that property owners and managers face.
Not only is his company one of the biggest property owners in Australia but he’s spent the past 18 months with his team designing a data architecture to provide data driven performance insights and reporting.
On Wednesday he joined with S+P Global’s head of sustainability Michael Salvatico, for the second briefing on the topic following an earlier briefing with presenters carbon expert Caroline Noller of the Footprint Company and technology expert Bruce Duyshart of Meld Strategies.
Scope three reporting where companies need to report on the emissions of the companies in their supply chain, might not be here yet, he said, “but it’s absolutely coming our way,” Jon said.
“And you cannot report on third party data if we don’t have access to it.”
Getting the digital infrastructure right is the foundation step as the future reporting on energy and performance becomes business as usual. There are many reporting tools coming to market, but most miss the complexity of harvesting the data from the variety of systems within commercial buildings, Jon said.
“The problem is there are no standards. The way the sector contracts and designs buildings is old scale thinking. Systems are siloed, packages are split up.
The Google BOS program presented a unique opportunity to see data at scale done properly compared to commercial buildings that are struggling to become digital. With disaggregated data and the lack of standardisation, creating a data lake is a challenge.
But then buildings are very complicated.
“They’re unique. Designers have their own way of doing things and the system providers also have their own flavour of data that sometimes get personalised by the coding techs.
“Really, we need to be mandating data standards and reporting requirements. NABERS has had a significant impact on energy efficiency, next steps should be data requirements.
Our data strategy, he said, is similar to Google’s BOS program creating a normalised search engine across the portfolio.
S+P Global
According to Michael Salvatico S+P Global is essentially a data company. The data it collects for analysts, investors, insurers and financiers is what the big corporate property owners are focused on. And these days the metrics need an increasingly rigourous climate and sustainability frame.
“We’re the connector between non standardised information, calculations, bringing together information, and then putting it into data sets, which are used by financial institutions. And it’s a challenge. It’s a huge job.”
In Australia the work covers 450 companies, worldwide it’s 20,000.
On Wednesday he said the current systems used to report on expenses “are not designed in a way to meet the classifications of scope 3 emissions [declarations]”.
“So if you’re a bank, or an insurer or an investor, and your desire is to use sustainability information to make a more informed decision, a large part of that decision is comparing your investments. You need to have a standardised assessment to make that comparison meaningful.”
Can AI help?
Will artificial intelligence help to understand the individual metrics various companies use and turn them into a standard?
Michael said the company is hoping this is possible in the future, but for now, “it’s pretty much a no”.
To get to that standardisation, it’s still a manual process.
As with other technology, it’s still a case of “garbage in garbage out”.
When that gets really bad, there’s a term that’s popped up to describe what happens: AI get “hallucinations”.
Clarke says his team has tested parts of AI and his feeling is there’s reason to be confident, “but it goes back to that one word, standards.
“There are so many standards missing from the reporting formats the data formats and also who can access it.”
As a landlord it would make sense to get access to information such as attendance and energy data, he says. “But it’s a challenge legally to get access to that and be allowed to. So there’s lots of hoops to go through.”
He thinks scope 3 emissions disclosures will be a trigger to find a way to standardise that data and make it available in an appropriate way.
Michael said his company has tools to allow the collection of data from large listed companies that are proactively reporting on corporate sustainability, which helps them with their initiatives.
The platform might work well for scope 1 and scope 2 emissions with the first tier supply chain but once you go beyond that there are suppliers who “don’t even understand the questions, let alone have the information precalculated”.
In the end modelling comes into play. If companies don’t have the data the answers will be modelled on the information that they provide.
“We always say to companies, ‘your opportunity is to share information with your stakeholders that you’re confident in. If you do not disclose information, you lose control of the narrative.”
Modelling is not as good as disclosing but then again, he said calculating carbon emissions is modelling.”
Michael says that more important than the current carbon emissions produced in real time is the transition to net zero.
“If you were asking for my view, my opinion, it is that transition is more important than where a company is today with its carbon emissions.”
“The sense of urgency around the need to act to reduce global warming is a decarbonisation story. It’s a transition story of how that company is planning to reduce its emissions to align with a credible standard.”
Jon said: “We’ve got a very big appetite to decarbonise. And we have a journey with a saying that that’s why we should be concentrating and getting our information set right, to work out our roadmap…to hit our targets in time.
A big focus for his company, is around the electrification of buildings.
“To remove fossil fuels is a huge, huge thing we need to do. And that’s a challenge.”
Both Jon and Michael will join our other panellists for what’s set to be a riveting masterclass and discussion on Tuesday. Get your tickets now!