ESG Considerations for Commercial Real Estate 2024

In 2024, sustainability has become a key factor for businesses looking to lease serviced offices, flexible office space, or managed office space. Occupiers play a vital role in reducing the environmental impact of their chosen spaces, aligning with broader corporate goals around environmental, social, and governance (ESG) responsibilities. This guide explores sustainability considerations for businesses to look out for when selecting office space.

At Cushman & Wakefield, we value sustainability as a cornerstone of our business. Our commitment extends beyond the environmental realm, aligning with dedication to reducing carbon emissions, promoting energy efficiency, and fostering green building practices. We have been ranked by Time Magazine in 2024 as one of the World’s Most Sustainable Companies.

Energy Efficiency and Renewable Energy Integration

Energy efficiency is essential for businesses looking to reduce costs and carbon footprint when occupying serviced or flexible office space. Reducing energy consumption lowers operational expenses and contributes significantly to achieving corporate sustainability goals.

Key Considerations:

• Energy-efficient Building Design: Look for office spaces certified with high energy efficiency standards, such as BREEAM or LEED. These certifications ensure reduced energy consumption and lower environmental impact.
• Smart Energy Management Systems: Serviced and shared office spaces equipped with smart technology allow occupiers to monitor and control energy use across heating, ventilation, lighting, and office equipment.
• On-site Renewable Energy: Many flexible office spaces incorporate renewable energy sources such as rooftop solar panels or geothermal systems to meet some of their energy needs.

Benefits:

• Reduced energy bills for occupiers
• Lower carbon emissions and improved environmental performance
• Improved sustainability credentials that appeal to eco-conscious clients and employees

Sustainable Building Materials and Construction Practices

Occupiers of shared office space and flexible offices should assess whether their chosen building is constructed from sustainable materials and follows eco-friendly construction practices.

Key Considerations:

• Recycled and Low-impact Materials: Office buildings that use recycled steel, reclaimed timber, or other low-carbon materials reduce their environmental impact. This is particularly important for businesses aiming to minimise their carbon footprint.
• Green Roofs and Living Walls: These features help manage stormwater, provide natural insulation, and enhance the building’s aesthetic appeal. They are increasingly popular in sustainable office spaces.
• Modular Construction: Buildings designed with modular construction methods generate less waste and are faster to assemble, making them an environmentally sound option for office spaces.

Benefits:

• Lower embodied carbon from construction
• Enhanced thermal efficiency, reducing energy needs
• Support for sustainable supply chains

Case Study: THE BLACK & WHITE BUILDING (74 Rivington Street, London, EC2A 3AY)

This is central London’s tallest mass timber office building –  a sustainable and boundary-pushing work space! It embraces sustainable materials, significantly reducing carbon footprint compared to equivalent concrete structures. Furthermore, its focus on wellness means this building has been kitted out with a yoga studio and roof terrace with outdoor space to relax.

Water Efficiency and Waste Reduction

Water conservation and waste management are critical considerations for businesses occupying flexible and shared office spaces. Managing water and waste efficiently can make a substantial difference in environmental performance.

Key Considerations:

• Water-saving Fixtures: Low-flow taps, dual-flush toilets, and water-efficient appliances are standard in sustainably designed office spaces, reducing water consumption.
• Greywater Recycling Systems: These systems repurpose greywater for non-potable uses, such as irrigation and cooling, helping reduce water demand.
• Waste Reduction Programmes: Many serviced offices offer comprehensive waste management, including recycling, composting, and waste-to-energy initiatives that reduce landfill contributions.

Benefits:

• Reduced utility costs related to water
• Lower water footprint, supporting environmental stewardship
• Contribution to circular economy principles through waste reduction

Case Study: HYLO (103-105 Bunhill Row, London EC1Y 8LZ)

Built on the original building’s superstructure, it saved over 2,500 tonnes of CO2. With 13 additional storeys, it offers an estimated 25% carbon saving over a 10-year lease compared to new buildings.

HYLO boasts WELL Gold and BREEAM. It has excellent certifications, high-rise tower floors, efficient podium floors, and roof gardens. Sustainable features include rainwater harvesting, reducing mains water reliance by up to 50%, and real-time energy monitoring to optimise consumption and costs.

Indoor Environmental Quality (IEQ)

The quality of the indoor environment is critical to the well-being and productivity of employees working in serviced or flexible office spaces. Good air quality, ample natural light, and thermal comfort are essential for health and efficiency.

Key Considerations:

• Air Quality Management: Occupiers should ensure that office spaces have advanced air filtration systems and sensors to monitor air quality. This reduces the risk of pollutants and improves occupant health.
• Natural Light: Maximising natural light is a key feature in sustainable office spaces. Large windows and open layouts help reduce the need for artificial lighting and create a more pleasant working environment.
• Thermal Comfort: Flexible and shared office spaces should provide optimal thermal conditions, with advanced HVAC systems that adjust according to weather and seasonal variations.

Benefits:

• Healthier, more productive work environment
• Improved employee satisfaction and retention
• Reduced energy costs through effective natural light use

Carbon Offsetting and Net-zero Goals

Businesses looking to occupy serviced or flexible office spaces must also consider how their space contributes to their overall carbon reduction and net-zero goals. This can be achieved through energy efficiency measures, renewable energy, and carbon offset initiatives.

Our video highlights the key sustainability questions that all occupiers should be asking.

Key Considerations:

• Carbon-neutral Buildings: Occupiers should choose office spaces that have already achieved carbon neutrality or have clear strategies to reach net zero through energy efficiency, green energy, and carbon offset programmes.
• Green Leases: Flexible office spaces often allow businesses to engage in green lease agreements, ensuring both the landlord and tenant commit to sustainable practices such as energy efficiency and waste management.
• Corporate Carbon Offsetting Initiatives: Occupiers can purchase carbon credits to offset the emissions associated with their energy use, further enhancing their sustainability efforts.

Benefits:

• Alignment with corporate sustainability objectives
• Positive impact on brand image and reputation
• Contribution to global climate action initiatives

Sustainable Transportation and Mobility Solutions

Occupiers of serviced and shared office spaces should consider the availability of sustainable transportation options as part of their commitment to reducing emissions.

Key Considerations:

• Proximity to Public Transport: Opting for office spaces near major transport hubs reduces the need for private vehicles, encourages the use of public transport, and reduces the overall carbon footprint.
• Electric Vehicle (EV) Charging Infrastructure: Many flexible office spaces now offer EV charging stations, which support the growing number of employees and clients using electric vehicles.
• Cycling Facilities: Providing secure bicycle storage and shower facilities encourages employees to choose cycling as a sustainable mode of commuting.

Benefits:

• Lower transportation-related carbon emissions
• Enhanced well-being for employees
• Support for national and local sustainability targets

Resilience and Climate Adaptation

As climate risks intensify, resilience is increasingly important for businesses selecting serviced or flexible office spaces. Properties that adapt to changing climate conditions will better support long-term business continuity.

Key Considerations:

• Flood and Weather Resilience: Buildings in areas prone to flooding or extreme weather should incorporate resilient design features such as elevated foundations or reinforced structures.
• Climate-resilient Landscaping: Sustainable office spaces often feature drought-resistant plants and green landscaping that require minimal irrigation, enhancing the building’s resilience to weather variations.
• Emergency Preparedness: Occupiers should assess the building’s readiness for extreme events, ensuring it has proper emergency systems and backup power in place.

Benefits:

• Reduced risk of operational disruptions
• Long-term viability of office space
• Enhanced safety for employees and assets

Conclusion

Sustainability considerations are vital for businesses when selecting serviced offices, flexible office space, or shared office space in 2024. By focusing on energy efficiency, sustainable materials, water management, indoor environmental quality, carbon neutrality, and resilience, businesses can ensure their office space aligns with their broader ESG goals. Embracing these considerations reduces environmental impact, offers cost savings, enhances employee well-being, and strengthens corporate reputation.

Need expert advice on lowering your company’s environmental footprint through office space? Call us on 0203 296 2001 or email flexoffices@cushwake.com.