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What is corporate sustainability?

What is corporate sustainability?

The United Nations (UN) defines sustainable development as ‘development which meets the needs of the present without compromising the ability of future generations to meet their own needs’1 It recognises that organisations can affect the economy, environment and people through their activities and business relationships, making negative or positive contributions to sustainable development. In 2015, all UN Member States adopted the 2030 Agenda for Sustainable Development,2 which provides a shared blueprint for peace and prosperity for people and the planet, now and into the future.

Author: Vincent Fogarty, Vice Managing Director of Diales Technical, London, UK

At its heart are 17 Sustainable Development Goals (SDGs) shown in Figure 1, which are an urgent call for action by all developed and developing countries in a global partnership. They recognise that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.

Figure 1. UN Sustainable Development Goals 

Organisations face increasing pressure from governments, investors, customers, and the public to operate in an environmentally and socially responsible manner. Investors may screen companies based on their ESG (Environment, Social, Governance) performance. Greenpeace’s Clicking Clean campaign highlighted the renewable energy content of major digital platforms. It has become commonplace for organisations to share their green credentials; however, this can sometimes be ‘greenwashing’ rather than transparent and verifiable reporting. The Global Reporting Initiative (GRI) aims to provide transparency on how an organisation contributes/aims to contribute to sustainable development and can form a framework for defining a company’s sustainability strategy through the use of standards. These are aligned with the SDGs. Other sustainability reporting initiatives, such as the UN Global Compact and the World Business Council for Sustainable Development’s (WBCSD) Green House Gas Protocol, are available. Many building types have a high and ever-increasing environmental impact due to their high energy consumption and use of resources, and hence discussions around sustainability tend to focus on this area. Organisations commonly hold ISO 14001 certification. ISO 14064-1 specifies the quantification and reporting of greenhouse gas emissions and removal.

When analysing emissions for accounting and reporting, these are commonly categorised into three scopes:

  1. Direct emissions from sources owned or controlled by the company, e.g., combustion of fuel in boilers or vehicles, fugitive emissions from refrigeration equipment.
  2. Indirect emissions from the generation of purchased electricity, steam, heating and cooling in activities owned/controlled by the company.
  3. All of indirect emissions relating to upstream and downstream activities as a consequence of activities of the company but not owned or controlled by the company, e.g., use of sold products/services.

Organisations may set commitments and targets, such as the Science Based Targets initiative (SBTi)3,  which includes commitments for energy efficiency, clean energy, water, circular economy and circular energy systems.  

Energy consumption and energy efficiency

In recent years, the construction industry has become more aware of the opportunities to improve energy efficiency and reduce energy consumption. As energy prices increase (for example, due to recent geopolitical events in Europe), the business case strengthens – saving energy saves operating costs and increases profitability. However, there is a perception that saving energy is incompatible with reliability. The requirement for high performance is often used as an excuse for poor energy performance. In fact, there are many ways to operate redundant  systems in a manner that is efficient and does not increase risk. One example is running all cooling unit fans at a reduced fan speed rather than running some at full speed with others switched off. The energy consumption is less (due to the cube law), and there is less wear on components operating at lower speeds. In unit failure, the remaining units are already running and need to increase their speed. Often, the designer has focused on sizing equipment for an entire load operation, and adjustments are required to optimise operation at part loads, as this is likely to be a facility's typical operational capacity. Best practices for improving efficiency are well-documented. Most facilities apply several of these practices in design and operation, although there continues to be room for improvement in many cases; as is commonly observed in various building types, the performance gap between how they are designed to operate and how they operate in reality.

Renewable energy

It is not just the amount of energy being consumed that is important, but also how polluting that energy is. Electricity generated from fossil fuels has a much higher carbon footprint than that generated from renewables. Most buildings are connected to a regional or national electricity grid, so will be subject to that local grid carbon intensity. Two identical facilities in different countries could have very different environmental impacts due to their energy supplies.4 More prominent building owners are advertising their commitment to purchasing renewable energy. Microsoft has committed to a 100 per cent supply of renewable energy by 2025, meaning they will have power purchase agreements for green energy contracted for 100 per cent of carbon-emitting electricity consumed by all of their buildings and campuses.

This is an essential step in operating more sustainably, but there are some limitations to this:

  1. In most locations, there is a limited amount of renewable energy available.
  2. If the buildings are connected to the grid, the actual electricity being consumed will be whatever the grid energy mix is.

On-site renewable generation is rare for several reasons:  

  1. Cost – capex and opex.
  2. Skills and expertise. Design, operation and maintenance of power generation requires different expertise and adds complexity.
  3. Space limitations – generation plant takes up valuable real estate. Covering the roof with solar panels may only provide a fraction of the total energy requirements.  

Water usage 

Many buildings have reduced the energy consumption of their cooling systems by using adiabatic, evaporative cooling, which uses the cooling effect of water evaporating rather than electricity powered refrigeration. This results in increased water consumption on site. This is not desirable in locations that suffer from water shortages / seasonal droughts. The net water usage may be more, but the overall environmental impact may still be less when considering the reduced environmental impact of using less electricity. A life cycle assessment (LCA) is required to analyse the trade-offs.

Heat recovery

Reusing waste heat is one way that buildings try to improve their environmental credentials. Rather than rejecting heat from cooling processes to the atmosphere, this can be captured and used by others (residential buildings, greenhouses, swimming pools), for example via a heat network, thereby reducing their energy consumption for heating.

There are a few barriers to wider adoption of waste heat reuse:

  1. Although there may be a large amount of heat available, it is usually relatively low-grade heat e.g., air <40C. This limits the economics, applications, and distance of the heat user. It is easier to look for an external user for waste heat during the facility site selection process and of course there is more need for heating in locations with colder climates. Note this is one of the selling points of liquid cooling – the ability to recover higher temperature heat from buildings.
  2. The buildings will be rejecting heat all year round but for many applications heating is seasonal. A solution must be in place to deal with heat rejection 100% of the time. This may mean that waste heat recovery and a traditional heat rejection system must be installed,  creating additional infrastructure and cost.
  3. Risk and contractual commitments. Heat recovery systems and plants are not standard in building installations; it is unlikely that a building's operation team would have the skills and resources to maintain such an installation, meaning that a third party would need to be responsible. In many cases, heat pumps are used as part of the system to increase the recovered heat temperature in line with the heat user’s requirements. The heat user would also need to be tied-in to specific commitments about how much heat they would consume and when. Managing these aspects in locations with existing district heating networks is easier. 

There are examples of heat recovery systems being installed as part of a planning requirement but then never being connected  (waste of capex and embodied environmental impact). The SDIA  argues that the business case for waste heat recovery needs to be developed by looking at the economics and selling this resource to energy companies who have the interest and means of using it. 

Figure 2. Product life cycle, by Operational Intelligence.  

Life cycle impacts

Energy consumption during the operational phase is only one part of a building’s environmental impact. LCA is a methodology which considers the holistic impact of a product, process, or service on the environment. A LCA looks at the products and processes within a system from cradle-to-grave, from the extraction of raw materials to manufacturing, transportation, operation, and eventual disposal, as indicated in Figure 2.  

Green building certifications 

Some buildings may be independently accredited in order to demonstrate their green credentials. Schemes include BREEAM,5 LEED,6 and NABERS.7 These originate from green building certifications from other building types,  such as offices and are based on achieving specific credits in order to reach a scoring level. Although they use established and auditable methodologies, in most cases the scoring does not reflect the holistic environmental impact and focuses on their energy efficiency rather than the significant embodied impacts.

Policy and regulation 

The high environmental impact of buildings has not escaped the notice of policy makers. The EBC’s International Review of Energy Efficiency in Buildings for IEA EBC Building Energy Codes Working Group8 presents a review of international policies and standards relating to building energy efficiency, including voluntary schemes and suggests possible future policies. One way of influencing the market is through green procurement practices, i.e., actively seeking or requiring more sustainable solutions. The European Commission has developed green public procurement (GPP) criteria for different areas including buildings, in recognition of the fact that Europe’s public authorities are major consumers  and so can influence the market for goods and services.9 

The World Green Building Council’s 'Net Zero Carbon Buildings Commitment'10 calls on businesses, organisations, cities, and subnational governments to reduce (and compensate where necessary) all operational and embodied carbon emissions within their portfolios by 2030, and to advocate for all buildings to be net zero whole life carbon by 2050.

It is important that policy also takes a holistic view of environmental impact and does not promote perverse incentives, e.g., support for waste heat recovery that does not incentivise reducing the amount of heat produced through energy efficiency.  

Much of the work to improve the sustainability of buildings is driven by economics (saving energy saves operating cost and increases profitability and competitiveness) as well as corporate social responsibility pressures; however, there is also a concern that unless the industry acts voluntarily, it will face increasing legislative restrictions.  


Sustainability needs to be embedded into all aspects of buildings design, build and operation. It is not enough to buy renewable energy or design buildings with high efficiency – action is required by all stakeholders throughout the value chain. In order to make a real impact an understanding of key areas to prioritise is important – not just token gestures.

This article was written for issue 26 of the Driver Trett Digest. To view the publication, please visit: www.driver-group.com/digest-issue-26

1.  United Nations Brundtland Commission (1987). Report of the World Commission on Environment and Development: Our Common Future Towards Sustainable Development 2. Part II. Common Challenges Population and Human Resources 4. [online] Available at: http://www.un-documents.net/our-common-future.pdf
2. United Nations (2015). Transforming Our World: the 2030 Agenda for Sustainable Development | Department of Economic and Social Affairs. [online] United Nations. Available at: https://sdgs.un.org/2030agenda
4. Minimising Buildings Environmental Impact – Beyond Energy Efficiency, Flucker et al CIBSE ASHRAE Technical Symposium 2017.
5. https://bregroup.com/products/breeam/ 
6. https://www.usgbc.org/leed 
7. https://www.nabers.gov.au/ratings/spaces-we-rate/ data-centres
8. International review of energy efficiency in Buildings for IEA EBC Building Energy Codes Working Group, Brocklehurst, Pacific Northwest National Laboratory 2022.
9. Development of the EU Green Public Procurement (GPP) Criteria for Buildings, Server Rooms and Cloud Services, Dodd et al, JRC 2020 
10. https://www.worldgbc.org/thecommitment


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