ESG and HVAC

ESG, or Environmental, Social, and Governance, is a framework that allows a company to evaluate how it manages risks, boost its sustainability, put an increased focus on health and safety, and become more environmentally friendly in general.

With more companies putting a focus on ESG principles, the HVAC industry is positioned to help make those goals a reality.

One of the biggest ways a building automation system (BAS) can assist with environmental goals is to simply put everything in the same place, where operators can visualize, monitor, and improve systems, including fire, lighting, security, and HVAC. According to the Drawdown Project, building automation systems can boost heating and cooling efficiency by more than 20% and energy use for lighting, appliances, and other systems by 8%.

“Connected building automation systems also support operators by providing actionable data and analytics, helping them identify problems and opportunities to improve the building’s performance,” Brian Meyers, system controls portfolio leader, Trane Commercial, added. “When a building is equipped with a BAS, there is the double benefit of having all the building’s data that can be used to act on and reduce energy use and intensity.”

With automation contributing to lower energy usage, naturally that helps the “e” portion, which can be further enhanced with these systems also reducing GHG emissions.

“ESG would not be possible in most scenarios without building automation. If you look at the tenants behind ESG — they cannot be properly achieved manually,” said Ross Goldstein, lead consultant with Commercial HVAC Business Solutions.

BAS can help to improve occupant safety by ensuring comfortable working temperatures and sufficient indoor air quality, which can lead to a healthier, more productive environment for employees. Being able to detect other issues, like gas leaks, is a huge bonus in the safety and security realm. With remote monitoring, an operator always has access to data on what airborne gases and particles are present within a building.

There’s also the “g” aspect, governance, which is also aided by BAS by ensuring that the systems are managed and operated in a way that upholds transparency, accountability, and ethical standards.

Goldstein said three good examples of this practice are:

1. Data security and privacy: BAS relies heavily on data collection and analysis. Data security is paramount. Proper governance mechanisms must be in place to protect sensitive information from cyber threats and misuse.
2. Compliance and reporting: Effective governance requires that building automation systems comply with relevant regulations and standards. This includes adhering to energy efficiency standards, environmental regulations, and health and safety codes.
3. Ethical procurement and operations: Companies must ensure that the components and services related to building automation systems are sourced ethically. This involves assessing suppliers for their ESG performance and ensuring fair labor practices, environmental responsibility, and ethical conduct throughout the supply chain.

To see a real-world example of how BAS can improve ESG, Meyers said to look at La Cité, a college campus in Ontario, Canada.

“La Cité had a goal to help reduce energy consumption and lower greenhouse gas emissions while providing a comfortable learning environment for its students,” Meyers said. “The Trane team worked with them to identify actions, which included using a BAS. Implementing Tracer SC+ helped the colleague sequence strategies to monitor gas, water, and electrical use in all campus buildings and align the HVAC systems with class schedules, helping to drive energy savings and helping to reduce the time required to transfer data from class schedules to HVAC schedules by one month.”

For more proof that BAS are gold-medal worthy, take a look at what Johnson Controls undertook recently in Paris.

Automation at the Olympics

With millions of fans traveling to the French capital for one of the world’s oldest sporting events, keeping them safe and comfortable was a high priority for stakeholders.

Johnson Controls integrated advanced building automation systems, HVAC, and fire suppression technologies across eight venues, which contributed to the International Olympic Committee’s ambitious goal of reducing the event's carbon footprint by 50%, when compared to previous games.

GOLD WINNING AUTOMATION: At this summer’s Olympics, Trane utilized building automation technology to increase the comfort and safety of the game’s millions of guests. (Courtesy of Amanda Ma – Unsplash)

For example, two of the latest innovations of Johnson Controls’ York 3.3 MW industrial chillers are in operation at the new cooling production plant, the La Chapelle plant, located in the Adidas Arena sports and cultural complex. As the twelfth power plant in the city of Paris' cooling network, it meets the cooling needs of the Adidas Arena and the surrounding area. This equipment provides sustainable and energy-efficient cooling at one of the flagship sites of the Olympic Games.

“With temperatures rising year on year and heatwaves becoming the norm, the need for sustainable cooling technology is critical to ensure optimal conditions in venues while minimizing the impact on the planet,” said Marc Vandiepenbeeck, CFO and EMEALA president for Johnson Controls. “Chillers are one of the most energy-consuming pieces of equipment in a building and represent an important opportunity to cut energy use and cost, while minimizing carbon footprint and delivering a healthier indoor environment.”

Over at the tennis stadium, the BAS linked the most vital building equipment including HVAC, lighting control, and energy management. The system controls and monitors performance and provides real-time data so facility managers can identify potential issues, make adjustments, and ensure the stadium is running as efficiently and sustainably as possible.

“We are proud to work with these prestigious venues and help our customers achieve their desired outcomes in energy efficiency, carbon reduction emissions, safety, security, and building management,” Vandiepenbeeck said. “Our expertise in smart stadiums and large venues has made Johnson Controls the partner of choice for stadiums across the world, and we continue to innovate in this space to further elevate the fan experience.”

How Contractors Cash In

BAS are steadily proving themselves to be a vehicle for growth, which is something building owners and HVAC contractors can benefit from.

In terms of market opportunity, research is showing now is a great time for HVAC contractors to add BAS as an offering to customers. According to the Global Trends in HVAC and Smart Technologies conducted in 2022 by the Building Services Research and Information Association (BSRIA), only 10% of facilities have implemented “several integrated smart technologies.”

“Contractors are in a great position to recommend building automation systems to their clients for new builds, retrofits, expansions — nearly any project,” Meyers said. “Furthermore, because BAS implementations have such clear ROI results (the 20% energy gains mentioned above), recommending BAS investments drive a lot of value for the customer.”

It’s estimated nearly 75% of facilities in the U.S. were built before 2000, and many of them contain older equipment, controls, and systems that aren’t nearly as energy efficient as what today’s HVAC equipment offers. Recommending these upgrades will not only save customers money, but will also help them to meet their sustainability goals.

To get started, Meyers suggested looking into some of the resources offered by Trane. Here is some quick advice he has for contractors to help their building owners and clients prepare a map of the goals:

• Assess needs: What supports the existing building environment? Does the building have new or future standards it must meet, and what are they? What are the enhancement opportunities?
• Evaluate solutions: We recommend looking at solutions with open standard BAS protocols and other common standards and guidelines. Will the solution be “IT approved”? Does the BAS have robust application documentation, online help and training to support installation, setup, and long-term use?
• Identify the outcomes: What is the budget, and what are the costs? Outline what the system is capable of (and not capable of) so there are clear, realistic KPIs that set the expectations with the organization.

Aside from the installation and sales revenue, Goldstein said there are other after-the-fact money-making opportunities, like charging a monitoring fee for the systems, a practice that he said has been successful at their company.

“The charge depended on what was being performed, from $12 to $150 a month plus the cost to install the system. It may seem small, but it is additional revenue,” Goldstein said. “You do not have to compete on price. If your company has nothing special compared to other companies, then you are competing on price. Offer the customer something unique; you created a unique selling proposition.”

A properly monitored system can also help a company evaluate the performance of its technicians — if a system is a constant failure, it might be a good time to give a technician additional training. If it’s performing as it should, that means a tech is doing everything right.

Automation features can also lead to a reduction in the number of technicians needed on staff.

“In a tight labor market, we discovered a great benefit once we hit 400 systems being monitored,” Goldstein said. “We would receive the alerts on average two days prior to system failure. This allowed us to schedule the calls. We no longer had to pull a technician off their current location.”

A Look Down the Road

As more technology is incorporated into HVAC systems, they will only continue to advance and enhance at a rapid pace. Given environmental and energy regulations are also being ramped up across nearly all sectors of government, offering and installing smart controls to connect and automate buildings is a money-making opportunity that will also continue to rapidly accelerate.

“Building automation systems are living, breathing, and changing systems that evolve with the needs of the organization and the building,” Meyers said. “New technology is always exciting, but building automation starts with the data. The first step of building automation is to connect everything. Second, build a solid automation baseline, and then third, deploy additional optimization with AI-enabled tools like Trane Autonomous Control powered by BrainBox AI.”

AI-enabled services that can automatically detect issues and perform system optimization 24 hours a day, like Trane’s Autonomous Control system, will help building owners and facility managers reduce energy consumption without sacrificing comfort, meet decarbonization goals, and operate more sustainably.

Goldstein also predicts tremendous growth in this sector, referencing a study published by the Garter Group that forecasts building automation will grow by $9 billion from 2018 through 2028. The amount of money companies save on energy expenditures could also help to fuel additional growth.

“If you read the predictions, and look at the predictions, I feel that not selling this technology, especially for commercial-industrial-municipal contractors, would be a mistake,” Goldstein said.