Opinion - 07/May/2020

Financing smart buildings: contributing to your core business

Making buildings greener and more energy efficient makes environmental and economic sense if the right financing solutions are used, says Thomas Geiselbrecht, Financing Solution Partner, Siemens Financial Services

Smart finance can help the digital transformation of the built environment at low or no-cost


The digital transformation of buildings has experienced strong growth and sales of smart-building technology is predicted to increase in the region of 30% a year as organisations globally recognise their tangible benefits and seek to make their buildings greener. The sector is under considerable pressure during the current pandemic, but this should make smart buildings that much more attractive to retain tenants and staff.

Businesses want to consume less energy: first from a desire to reduce energy usage and create a cleaner environment; second from the corporate motivation to reduce expenditure. Their challenge is the capital cost of converting to smart buildings.

In essence, conversion to smart buildings turns a former cost into an enabler of business. Digitally enabled office space can be personalised, so the profile of the person working in a given area — immediately on login — dictates information access, security protocols, climate control preferences, room automation and services access/charging and much more. The building effectively becomes a multi-faceted administrative assistant, automatically managed and controlled through digital transformation. Everyone benefits — owner/landlord, operator, tenant and user.

Tangible financial benefits are gained through this transformation. Unwell staff cost UK businesses £77 billion annually in lost productivity, while in the US the annual cost of absenteeism represents around $226 billion. Building management systems can help to control temperature, varying it across different rooms or areas, depending on its use and the desire of its occupants. LED technology offers sophisticated colour and brightness combinations to manage occupant comfort, mood and improve staff concentration and productivity.



Buildings can also protect against crimes with increasingly sophisticated security systems. Improved pixelation can mean images are captured quicker, and 360 degree cameras mean that one camera can be used where several were once needed. In Sweden, nearly six out of ten businesses have been directly affected by crime in the last two years. Integrating the latest technology into properties can help minimise this threat.

While there are clear benefits from the digital transformation of the built environment, that transformation carries a cost. Smart finance is, however, helping to make conversion happen at low or no-cost. Smart buildings have the potential to save approximately 15% to 25% on energy costs, contributing to a cleaner, greener world. If those savings can be harnessed and used to pay for the initial cost of conversion, then owners and landlords can transform their buildings without major capital outlay.

Pioneering landlords and owner-occupiers are increasingly looking to solutions whereby the supplier of a service such as smart-building conversion bundles the conversion into a monthly fee across an agreed-upon contractual period. This is leading to the rise of a concept called “Smart Buildings as a Service“ — sometimes called “servitisation.” Landlords and owner-occupiers are conserving their capital for growth and improvement initiatives and are choosing to let integrated technology-service-finance companies fund the digital transformation of their buildings. There are a variety of modern financing models that allow this to happen, but the most attractive of these involves smart solutions partners that are able to do this at low or zero net cost for the building’s owner — public or private.

In conclusion, smart building conversion is attractive to all stakeholders, but perceived costs are proving an obstacle. Smart financing can remove that obstacle. Future energy savings can be harnessed to pay for the enabling conversion. The result is that landlords and building owners can go smarter, cleaner, greener, all without having to find precious capital to make it happen.

The views expressed in this opinion are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy

Do you have a thoughtful response to the opinion expressed here? Do you have an opinion regarding an aspect of the global energy transition you would like to share with other FORESIGHT readers? If so, please send a short pitch of 200 words and a sentence explaining why you are the right person to deliver this opinion to opinion@foresightdk.com.


Leave a Reply

Your email address will not be published. Required fields are marked *

Related articles

Building energy efficient, sustainable homes for all

As governments across Europe attempt to deal with the economic and social impacts of coronavirus and how and when to end strict confinement measures, the time is right to invest to ensure every person can live in a healthy, connected and sustainable home, argues Davide Cannarozzi, CEO and Founder of GNE Finance

Read more

EU ushers in game-changing financial rules

An EU taxonomy to define green investments is expected to enter into force in 2021, but some experts want it to be used immediately to inform stimulus packages aimed at dealing with the social and economic fallout from the Covid-19 pandemic

Read more

Green Deal for heat — smart sector integration is key

As the EU puts forward plans for a European Green Deal aimed at getting the region to climate neutrality by 2050, Jan Rosenow and Richard Lowes from the Regulatory Assistance Project argue for much more attention to be paid to the decarbonisation of heat

Read more

Getting the finance to flow

To create demand for sustainable finance, governments should integrate climate criteria into their procurement and in how they draft policies and regulations

Read more

Responsible investors see greater role after pandemic

Investors taking ESG issues into account are increasingly examining future scenarios, particularly around climate change

Read more

What will it take to start — and sustain — a renovation wave?

With the European Commission planning to announce details of a building “renovation wave” in the autumn of 2020, Susanne Dyrboel, vice-chair in Renovate Europe explains what the EU executive should be considering to make its vision reality

Read more