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Future-proofing buildings: Why bother?

This author no longer works for DNV GL.

It would be easy to believe that climate projections alone would be enough to motivate building owners to protect their assets. One doesn’t have to search far for the data on how dire the climate situation has become. With drought in the Western U.S. and flooding elsewhere, these extreme weather events are having a significant impact on U.S. economy. And hurricane and wildfire season has only just begun.

But these extreme conditions have not motivated building owners to proactively increase resiliency or develop adaptation strategies. Which should not be a surprise—moral imperatives have never been much of a motivating force. Knowing that, DNV GL’s Sustainable Buildings and Communities (SBC) team set out to identify the three primary drivers that we believe our clients should be thinking about.

Cost to Insure: The insurance company Munich RE estimates that insurers faced losses of $510 billion from extreme weather events from the period of 1980 to present. Given the current trends, insurers have already required disclosures of climate risk in order to remain solvent. With increased disclosure, insurers will find additional risk, and building owners will likely start to see increased premiums.

Cost to Operate: Climate predictions show warming trends across winter and summer will result in significant increase in air conditioning loads. In a 2006 report by the California Energy Commission, predictions show a 20.3 percent increase in annual electricity use and a 10.3 percent increase in peak demand given worst-case scenarios for greenhouse gas emissions. And then there’s also the health impact of climate change. As ground level ozone increases, building owners and operators will need to consider how poor air quality impacts occupant health and productivity, which is estimated to cost employers billions every year.

Business Continuity: The 2013 Carbon Disclosure Project S&P 500 Climate Change Report  found that nearly 80 percent of the 5,000 respondents considered climate change to present business risk. Of those that consider climate change a risk, 63 percent said it was immediate (1–5 years) and 75 percent said the impact would be directly to their business operations. Risks to business continuity include damage to infrastructure, supply chain disruption, critical service interruption, or depletion of resources.

To help our clients address these risks, the Sustainable Buildings and Communities (SBC) team has been busy this year developing new tools and guidelines for building owners and operators to increase the climate resiliency of their facilities. We’ve been conducting research, engaging thought leaders and will be presenting on the topic at a number of upcoming conferences, including ACEEE Summer Studies and GreenBuild 2014. Stay tuned to the Utility of the Future blog to hear updates on our progress.

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