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Håkon Grimstad

Aussie SMEs pull forward net-zero targets without waiting for government mandates

With the Australian Government committing to Net Zero carbon emissions by 2050 and many countries around the rest of the world pulling forward their 2030 emission targets, every Australian business has an eye on how it can reduce its carbon emissions, become a better global citizen and demonstrate their commitment to customers.

Net Zero is, for the first time in history, a mainstream business, brand and political issue. We can expect sustainability and Net Zero to be a significant factor in the upcoming Federal Government election and it will also play a role in upcoming state and territory elections.

Targets established by governments around the world may seem ambitious but there will come a time when those targets are not just aspirational and will represent future regulatory obligations. Being prepared for this is important but there are substantial reputation and brand benefits to being ahead of that curve. 

It’s not only private and ASX listed businesses preparing for the regulatory changes. Becoming a leader in the quest for Net Zero is viewed favourably by customers keen to spend with businesses that align with their values. 

Accelerating your Net-Zero ambitions now makes good business sense. Energy costs represent a significant and rising expense to businesses. In Australia, about a quarter of all energy use and 10% of carbon emissions come from commercial buildings. 

Buildings that are less energy efficient are not only more costly to operate but they also find it harder to attract new tenants. For example, government agencies will not lease facilities that are rated at below four and a half NABERS energy stars. 

And they’re not alone. Many organisations, large and small, list Net Zero emissions as a criterion for choosing a location. A recent survey by Savills, on what younger workers want, found that the green rating (environmental performance) of their building was most important to them, ahead of free snacks, games rooms and a gym.  

Energy-efficient buildings that emit less carbon are also more attractive to investors, have higher value, and cost less to run. The shift towards Net Zero isn’t just a regulatory or political imperative – it’s smart business.

Moving towards Net Zero can seem like an insurmountable mountain. But like any long journey, it starts with plotting a course. That plan requires information and targets.

The equipment that manages your building – systems such as lighting, HVAC (heating, ventilation and air conditioning), elevators and escalators, temperature and carbon dioxide sensors, and other plant and equipment – offer a raft of data and opportunity for greater efficiency and sustainability.

Start with a baseline and look for ways to optimise, or even decommission, inefficient equipment. The cheapest, lowest emitting energy you can access is the energy you don’t use. As well as giving you an immediate cost-saving, reducing your energy use lets you support investments into renewable energy sources. 

Once you understand where your energy use occurs, what carbon emissions you’re generating and have picked off the low hanging fruit, it’s time to look for more opportunities to push towards Net-Zero. Armed with the right data, look for ways to drive greater operational efficiencies and put greater scrutiny on capital purchases. 

As new regulatory regimes come into effect, businesses that aren’t able to collect data about their energy use and emissions will be left scrambling and playing catch up.

By preparing now, businesses that collect the right information and present it meaningfully will be able to show customers, shareholders and other critical stakeholders that they are prepared for the future and able to meet market expectations. 

While many of the more well-known standards for energy efficiency in the commercial world target real estate, through the NABERS rating system and GRESB for real estate, there is also increased scrutiny on production environments, with operators of factories and warehouses examining ways to reduce their carbon footprint.

Achieving Net Zero ahead of looming regulatory deadlines isn’t just about ensuring you’re following government mandates. Customers, tenants, investors and other stakeholders are all looking to partner with progressive businesses and brands that are serious about achieving Net-Zero.

Increased operational efficiency and better decision making about capital investment deliver bottom-line benefits to Australian businesses that achieve Net Zero and do it early.

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David Walsh

David Walsh

David Walsh is the founder of CIM, a world leader in building analytics software, making it easy to operate large buildings at their peak operational performance and deliver economic and environmental benefits.

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