It’s energy efficiency.

Energy efficiency is the cheapest source of new energy because every kilowatt-hour that I save on the grid is one that someone else can use.

Within the world of computers, the price-performance efficiency is even more pronounced. A 2023 iPhone 15 is 60,000 times cheaper than a 1976 Cray-1 supercomputer. It’s also 180,000 times more energy efficient and 5,000 times more powerful.

Kevin Weil, chief product officer at OpenAI, says that OpenAI’s models are improving 10-fold every year in energy efficiency. Deferring compute-heavy tasks such as AI training to times when data-centre energy use loads are light and assigning loads across many data centres – in essence adjusting when and where power is used – could have the same benefit of building 200 gigawatts of new capacity, argues Amory Lovins, one of the cofounders of the Rocky Mountain Institute, which is on a mission the transform global energy systems. That’s far more than enough to power all projected new data centres from existing utility assets.

AI driving efficiency in buildings

Computers aren’t the only arena where efficiency is making giant leaps. Buildings represent roughly 40% of global energy consumption and 75% of U.S. electricity use, making them an enormous target for efficiency improvements. Research published in Nature Communications found that AI applications could reduce building energy consumption by 8% to 19% by 2050, and up to 40% when combined with other policies such as retrofits and low-carbon power generation. Building efficiency can free up more electricity use than AI will ever require.

This creates a fascinating dynamic: while AI consumes energy, it also enables efficiency gains across the broader economy. The key is ensuring that AI deployment is strategic and coupled with robust measurement and verification protocols. AI for buildings isn’t theoretical; companies like BrainBox AI and others are already deploying systems that optimize HVAC (heating, ventilation, air conditioning), lighting, and energy storage in real time based on occupancy, weather and grid conditions.

“Artificial intelligence is the latest development in a long-standing megatrend in which information, analysis and innovation have been replacing the waste of energy and materials that characterize the overbuilt technologies of the 20th-century fossil economy,” notes Ralph Torrie, director of research at Corporate Knights. “Of course it uses electricity, but not nearly as much as it displaces.”

There are many examples of rapid, unexpected gains in energy efficiency. In 2021, all the blockchain-based cryptocurrencies combined used somewhere between 190 and 250 terawatt-hours of electricity, which is just about 1% of global electricity demand that year, or roughly the same as Taiwan’s consumption. Critics called blockchain technology fundamentally unsustainable.

Then in September 2022, Ethereum underwent a major transformation it called “The Merge,” shifting its consensus mechanism from “proof of work” to “proof of stake.” This cut the network’s energy consumption by 99.9%. The network’s annual energy use dropped from 80 terawatt-hours – the same amount of electricity that Austria or Finland uses in a year – to just 0.01 terawatt-hours.

Proof of stake achieved these gains by eliminating wasteful competition. Instead of miners racing to solve puzzles, Ethereum now relies on validators who are chosen to create new blocks and confirm transactions based on the amount of Ether (Ethereum’s native currency) they have staked as collateral. This method secures the network through financial commitment rather than raw computational power.

When real limits appear, innovation often accelerates in unexpected ways. Constraints can become the spark for new possibilities.

— Anthony Di Iorio, Ethereum co-founder

The shift to proof of stake also enhanced its security, scalability and environmental sustainability. This landmark move positioned Ethereum as a leader in sustainable blockchain innovation and demonstrated that large-scale decentralized systems can evolve to meet global energy and climate goals without compromising performance or decentralization.

Ethereum co-founder Anthony Di Iorio says that Ethereum’s massive efficiency gain is part of a broader pattern of disruptive innovation across technologies: “When real limits appear, innovation often accelerates in unexpected ways. Constraints can become the spark for new possibilities.”

For Di Iorio, the key lesson is that “fundamental architectural redesign beats incremental optimization. When you eliminate structural inefficiency rather than just making a system slightly less inefficient, you unlock orders-of-magnitude improvements.”

DeepSeek, a Chinese AI company, also showed that algorithmic innovation can cut costs – in its case by 97% even under severe hardware constraints. Meanwhile, SETI@home coordinated millions of personal computers to create a huge virtual supercomputer to power its search for extra terrestrial intelligence.

Better orchestration, multi-tenant GPU sharing (in which multiple users share computational resources) and carbon-aware scheduling could push AI infrastructure use from today’s 25% to 40% to 55% to 60%, effectively doubling capacity without building any new facilities.

“The question isn’t whether AI will consume catastrophic amounts of energy,” Di Iorio notes. “The question is whether we will apply what we’ve already learned about radical efficiency gains.” That means implementing the measurement and transparency frameworks that enable market discipline and establishing the policy guardrails that ensure that efficiency serves sustainability rather than just enabling endless expansion.

The path forward: Three essential actions

Three near-term actions could save 15 to 70 terawatt-hours by 2028:

Default to efficiency. Major cloud platforms and AI frameworks should make lean, right-sized models the default choice rather than requiring developers to opt in. When efficiency becomes the path of least resistance rather than an extra step, adoption accelerates dramatically.

Focus on hardware use. Better workload-management software can increase effective use from today’s 40% to 55 to 60%.

Mandate transparency. Energy consumption per task should be as visible as price and latency. When enterprises and governments demand kilowatt-hours-per-million-tokens disclosure in their AI procurement, providers will compete on efficiency. Market mechanisms work, but they require information.

The projections of AI’s looming energy crisis aren’t wrong if we assume nothing changes. But stasis isn’t how technology works when talented people face hard constraints with clear incentives to solve them.

Jim Harris is a #1 international bestselling author writing on AI, disruption and innovation. He speaks at 50+ events a year.

The post The single greatest tool for reducing greenhouse gas emissions is energy efficiency appeared first on Corporate Knights.

The letters were both due for release Tuesday at 9 AM local time.

Cancelling the program “would set us back years in achieving our [greenhouse gas] emissions reduction goals, and denies the majority of Canadian homeowners the supports they need to create energy-efficient and climate-ready homes,” Green Communities Canada tells Wilkinson. “The forests are burning, and nearly all houses in the country need to be retrofitted. Now is not the time to slow down.”

The post Abrupt end to Canada’s green retrofits program leaves industry in chaos appeared first on Corporate Knights.

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This wasn’t the first time that energy efficiency experts had challenged the EPC rating system. Earlier in 2021, the national government had concluded that an EPC grade didn’t predict how larger buildings actually performed in terms of energy consumption and carbon emissions.

The United Kingdom’s EPC labelling system is hardly unique. Since the early 1990s, hundreds of thousands of developers have opted to build their projects according to elaborate checklists and performance thresholds prescribed by green building organizations. Some, however, have not aged well. Just 12 years ago, a New York developer erected a US$1.8-billion office building, One Bryant Park, praised for its sustainability features and its LEED Platinum rating. Today, the owner faces steep fines because the building’s carbon emissions exceed the cap established by a 2019 New York City bylaw known as Local Law 97.

These clashes reveal two important shifts in the narrative about the carbon footprint of buildings: one is that some green labels don’t really deliver the goods; the second is that local building and energy codes, which traditionally established minimal standards, are playing a much more important role in driving carbon reduction in buildings, which account for about 40% of all greenhouse gases.

Since the early 1990s, the world of voluntary certification has functioned like a marketplace of aspiration. A range of organizations offer seals of approval for a fee. Developers have to jump through hoops that run the gamut from technical air tightness measures and storm water management to fuzzier categories, such as wellness and “ecosystem services.”

The oldest is BREEAM, which originated in the United Kingdom. It commands the largest market share in Europe (560,000 buildings are BREEAM certified) and is seen as the common ancestor for many later certification schemes, including LEED, which has been administered since 1993 by the U.S. Green Building Council (USGBC). As of 2019, the USGBC had issued 100,000 LEED building certifications for commercial projects. Passive House, prevalent in northern Europe, has a narrower mandate focusing on energy performance.

The number of building certification standards has proliferated. A 2017 study published in Building and Environment estimated there are now about 600 green rating systems globally. Developers seek out such certifications not just because they yield greener buildings, but also because those buildings are more marketable, and profitable. In North America, academics and environmentalists have criticized LEED’s approach because developers could game it out, running up their score by adding cosmetic features (e.g., bike parking) that don’t really improve a building’s carbon footprint.

A 2018 study published in the Journal of Exposure Science & Environmental Epidemiology offered a bracing conclusion: “A decade of research suggests that LEED-certified buildings, on average, achieve little or no primary energy savings relative to other similar buildings,” the authors  wrote. “Evidence suggests that any reduction in site energy is typically achieved through increased electric use and corresponding off-site energy loss.”

But in the past few years, some governments have stepped into this breach by cranking up their sleepy old building codes as a means of driving decarbonization.

“A decade of research suggests that LEED-certified buildings, on average, achieve little or no primary energy savings relative to other similar buildings.”

–Journal of Exposure Science & Environmental Epidemiology

The City of Toronto and the province of British Columbia, for example, have both adopted what are known as “step codes” – tiered building regulations that set out increasingly stringent energy/carbon performance standards. For private builders, the first-tier requirements are mandatory, and the system works like an escalator: at regular intervals, the second (voluntary) tier becomes the basic mandatory tier, and so on. The fourth and latest version of the Toronto Green Standard went into effect in May.

Under New York’s Local Law 97, property owners whose buildings have more than 25,000 square feet of floor space are required to meet energy efficiency targets and reduce emissions by 20% by 2024 or face fines; even more stringent caps come into effect by 2030.

San Francisco in 2020 banned the use of natural gas in all new buildings, joining New York City and a growing number of municipalities that have taken the same step. California this year amended its own building energy code to require all new homes to be fitted out with solar panels, phase out refrigerants, and establish new standards for heat pumps and electricity storage systems to ease pressure on the grid.

For years, environmentalists have argued that tougher building codes could reduce emissions, and this future seems to have finally arrived, at least in some places. But it raises an interesting question about all those certifications: in a world of tougher codes, will these ecolabels still be necessary?

Thomas Moore, a senior consultant with Steven Winter Associates, a New York–based green building services firm, says the choice of certification is highly dependent on the type of project. For companies or institutions that plan to own a structure for a long time, he says, the best choice is Passive House, which emphasizes airtight building envelopes, high-performance windows and extensive insulation, all of which is meant to minimize heat loss and thus reduce energy consumption by as much as 90%.

“People in New York City with projects that achieved high LEED ratings are now being told that there’s a new law on carbon emissions that wasn’t accounted for 10 or 20 years ago and [they] will get a fine.”

–Yetsuh Frank, managing director of Building Energy Exchange

Passive House certification, moreover, has to be earned through verification of the completed project’s actual energy performance, not via checklists of features that generate points, as is the case with LEED (i.e., a LEED Platinum building must score over 80, whereas LEED Certified is 40 to 49). “If you’re a long-term investor and will hold on to a building for 50 years,” Moore says, “then Passive House aligns very well.” Some point to the fact that one way to achieve Passive House certification is to use a lot of petrochemical-based insulation, which drives up embodied carbon. But life-cycle analysis will be mandatory by the end of the decade.

Toronto now accepts Passive House–grade energy modelling results as a means of demonstrating compliance with the Toronto Green Standard. By 2030, they’ll no longer be optional. New York, by contrast, took a more hard-edged approach with Local Law 97, which has firm 2025 deadlines and real fines. By 2024, New York will also have an all-electric building regulation.

These new building codes represent a sea-change, says architect Yetsuh Frank, managing director of Building Energy Exchange, a non-profit that seeks to educate building owners on decarbonization. “People in New York City with projects that achieved high LEED ratings are now being told that there’s a new law on carbon emissions that wasn’t accounted for 10 or 20 years ago and [they] will get a fine.” He points out that by emphasizing the stick as much as the carrot, New York legislators have forced property managers and their bankers to pay more attention to the risk exposure associated with failing to update older buildings.

Moore is also seeing more projects where the developer is layering on certifications; that is, using not just LEED or Passive House, but others that measure related aspects of a building’s performance, like healthy indoor environments. “That’s what buyers care about,” he says, pointing out that certification systems like Well and Passive House are highly complementary.

All of this activity offers more proof that we simply have to find ways to make buildings that generate fewer emissions and don’t make their inhabitants sick; neither are nice-to-haves. Indeed, it may be that the voluntary building-certification systems that evolved over the past three decades will eventually become obsolete. The sooner we get to that day, the better.

Toronto journalist John Lorinc writes about cities, sustainability and business.

The post Green building labels need renovating appeared first on Corporate Knights.

If you could live in a home that was highly energy efficient, climate resilient, comfortable and healthy for about the same cost as a code-built home and was built to outlast current buildings, would you move in?

All that’s missing to make that a reality for homebuyers is an improved government building code that recognizes how easy – and important – it is to lower household energy bills and provide shelter during extreme weather events. 

Unfortunately, governments around the world have repeatedly failed to deliver, and this cycle of building-code failure is about to continue in Ontario.

During a short and rushed consultation that ended in March, the provincial government released a proposed update to the building code. The latest changes were meant to be based on the model national code released last month. The proposed federal code isn’t the pathway to net-zero it’s hyped to be; it’s an improvement but not there yet. Meanwhile, Ontario’s proposed code is a step backward when it comes to making buildings more energy efficient and resilient in the face of the climate crisis.

A quick code refresher: every five years, the Canadian Commission on Building and Fire Codes, established by the National Research Council of Canada, develops and publishes the model Canadian National Building Code. The federal code is voluntary, but since many provinces lack the ability or desire to develop their own, most adopt some or all of it.

The latest federal model code is a step code, much like that found in British Columbia. This means it’s designed to allow provinces to ratchet up energy performance levels over time to increase efficiency and drive down greenhouse gas emissions. By having steps, it gives the building industry a clear idea of what will come next, performance-wise.

The proposed federal code isn’t the pathway to net-zero it’s hyped to be; it’s an improvement but not there yet.

Rather than adopt the step code, the provincial government in Ontario proposes to opt for the lowest possible efficiency level. For smaller buildings, Ontario will make no improvements in energy efficiency. For larger buildings, the province will put in place a standard that is less efficient on some of the requirements for windows, doors and insulation, making it less stringent than what is in place today. With everything we know about the climate crisis and building solutions, this is not only a wasted opportunity that will end up costing Ontario more in the long run; it will also hurt the province’s long-term competitiveness to attract jobs in the low-carbon economy. Real estate investors in Europe and the United Kingdom are already seeing inefficient buildings suffer a 30% reduction in value, while a robust Canadian energy-efficiency marketplace could add up to $48 billion to GDP.

Worse still, it may come with the collateral damage of those homes and lives when buildings are not able to withstand extreme weather events. For example, buildings with generous insulation, triple-pane windows, air tightness, heat-recovery ventilators and low energy use can support residents during extreme temperatures, like those during the unprecedented heat dome that killed 600 people in B.C. last summer.

Ontario municipalities looking to improve their green-building standards will find that the regressive provincial code stymies their plans. Municipalities use a process called site plan control to develop green building standards, but having more tools, such as a unified robust building code, would drive consistency, predictability and capacity to help transform the market across the province.

Federal code is an improvement but a missed opportunity

Meanwhile, the top step of the new federal code calls for a 60% reduction in energy use over the previous model code, released in 2015. It’s an improvement but not as ambitious as B.C.’s step code, which has limitations but targets a near 90% reduction. There’s plenty of evidence demonstrating that more is possible, with minimal cost increases, but that ambition did not make it into the code. In a world where Canada will have to double its electricity supply to get to net-zero, shouldn’t we look to save energy at every step?

In today’s building stock, including “green buildings,” there is a performance gap between expected and actual energy performance. A low-cost way to close this gap and verify the efficiency level of buildings is by conducting what’s called a blower-door test to see how air-tight they are. With heavy lobbying from the building industry, air-tightness testing was first added to and then pulled from the federal code (and wasn’t added to the Ontario code). 

The federal code also continues to use a “reference building approach,” where energy performance is assessed against a similar hypothetical building – an approach that will continue to exacerbate the performance gap problem. In a net-zero world, where investors are seeking decision-useful climate data, shouldn’t we aim to deliver quantifiable reductions in carbon pollution over the life of the building? Instead, we are expected to just trust the building industry.

Equally troubling is the near complete absence of resiliency measures added to the federal code to protect buildings from high winds, floods, wildfires and more. Incorporating projections about future climate conditions into the codes will reduce the need for costly future retrofits, according to the federal government’s own expert panel on disaster resilience.

Ontario municipalities looking to improve their green-building standards will find that the regressive provincial code stymies their plans.

One major problem: developing Canada’s model code is a conservative and opaque process. 

The Canadian Commission on Building and Fire Codes uses a series of committees composed primarily of members of the building industry to develop the new code. Gaining a seat at the table is near impossible. The commission also receives advice from provinces and territories through a committee that can block virtually anything the code committee wants to move forward.

While the commission may have done good work in the past to ensure the integrity of our buildings, the process is too slow to address the innovative building needs of Canadians during a worsening climate crisis.

If the federal government wants to meet its climate-mitigation and -resilience goals, it needs a stronger code, and it needs provinces and territories to take a step forward, not back. The code-development process needs to be reformed to make it faster, more accountable, transparent and innovative to help solve the climate crisis. 

More ambitious codes will spur jobs and innovation while delivering high-performing buildings that are comfortable and better for your health. If built correctly, they will have the potential to significantly cut carbon pollution while also sheltering us from some of the worst climate-related impacts. Change is needed because the codes belong to the public, not entrenched interests and recalcitrant provinces.

The post Why is Ontario making new buildings less energy efficient? appeared first on Corporate Knights.

New York City has been requiring building owners to submit information about the energy performance of their buildings for a decade, and this “benchmarking” policy has become gradually more aggressive, beginning with very large structures, then expanding to somewhat smaller buildings, banning the use of heating oil, and finally requiring disclosure. 

“There’s some element of naming and shaming to inspire some action,” observes Chris Halfnight, policy director of the Urban Green Council, a non-profit focused on promoting building sustainability in New York. “Nobody wants to live and work in or own and operate a building that’s getting a D when there are buildings getting As and Bs.”

The premise behind regulated building benchmarking is that it forces asset managers to measure energy performance, which provides them with information they can use to upgrade their systems. While the capital costs of those retrofits aren’t trivial, more energy-efficient buildings have lower operating costs, less exposure to rising energy prices and smaller carbon footprints.

The policy is rooted in the old accountant’s adage about not being able to manage what you don’t measure. But does benchmarking produce results?

In December 2020, after a decade of benchmarking, the results of New York’s policy were impressive: “Over the last 10 years,” according to a summary by the Urban Green Council, “total emissions from roughly 3,200 regularly benchmarked properties fell by about 22.6 percent.” Levels of four major air pollutants related to the use of now banned heating oil fell by 29%.

Those results built on earlier assessments that provided proof of concept. In 2017, the National Electrical Manufacturers Association produced a survey that looked just at NYC. It found that 77% of building owners changed the way they manage their assets because of benchmarking, for example investing in more energy-efficient lighting or calibrating their HVAC systems so they wouldn’t heat and cool simultaneously. The authors cite results from other studies showing that compliance with the bylaws led to an overall 14% reduction in building energy-use intensity (i.e., energy use as a function of size) between 2011 and 2014. 

A Lawrence Berkeley National Laboratory evaluation pointed out that, as of 2016, 24 jurisdictions in the U.S. had benchmarking and transparency (B&T) rules. It found that in 10 of the largest cities in those regions, buildings demonstrated “a 3 to 8 percent reduction in gross energy consumption or energy use intensity over a two- to four-year period of B&T policy implementation.” While the authors cautioned that some of the findings were preliminary, they did note that building owners also made non-energy improvements to their assets – water consumption, for instance – resulting in higher property values and improved productivity for tenants. 

There’s some element of naming and shaming to inspire some action.

-Chris Halfnight, policy director of the Urban Green Council

The cities that have B&T rules aren’t just the usual suspects; they include places like Kansas City, Denver and Orlando, and (red) states like Utah and Ohio. In other words, this approach isn’t just the preserve of cities under Democratic administrations, like NYC or Seattle.

Canada, interestingly, is way behind. British Columbia has a benchmarking program, but it is voluntary, and only a year old. In Ontario, the previous Liberal government passed benchmarking legislation but didn’t bring it into effect. The Tories did enact the law, known as Energy and Water Reporting and Benchmarking (EWRB), but the regulations apply only to buildings over 100,000 square feet and exempt public sector real estate. The regulations will extend to buildings over 50,000 square feet in 2023.

As for the transparency part, the raw data collected under EWRB is released through Ontario’s open data portal. But, unlike many of the U.S. B&T laws, including New York’s, addresses aren’t disclosed, nor has the Ontario government done much with the data it does gather. As one City of Toronto energy official puts it, the information is “not particularly useful.”

Sean Brennan, Urban Green Council’s director of research, says the location data is crucial because it enables policy-makers and researchers to make detailed location-based evaluations of energy consumption patterns in the city, which in turn allows the city to focus its enforcement efforts. 

The transparency, he adds, “helps the public grasp what is going on.” For example, the B&T data has been used to map energy efficiency within the city.

Anecdotally, Brennan says, the subject of a building’s energy-efficiency ratings now comes up in the context of meetings of the occupants of co-ops, or when firms looking to rent office space are reviewing leases and wondering if they’re moving into a healthy building. 

Halfnight points out that B&T policies are not “a mandate to take action … It’s a necessary first step.” What’s clear, however, is that when benchmarking rules force landlords to measure and disclose how they run their assets from an energy-efficiency point of view, many will take the next step because it makes good business sense. 

The emission reduction is the bonus. 

The post What happened when NYC started naming and shaming buildings for bloated footprints appeared first on Corporate Knights.

If these shifts mark the state of art as Canada slowly wakes up to the implications of the climate crisis, consider a recently opened 200,000 sq.-ft office building project by Snøhetta in Trondheim, Norway, a remote northern city at the same latitude as Yellowknife. The Powerhouse Brattørkaia isn’t merely a net zero building; this structure actually produces surplus clean energy (all of it solar) that is pressed into service in a micro-grid serving the surrounding community.

As Snohetta founder Kjetil Trædal Thorsen said of the project, “Energy-positive buildings are the buildings of the future. The mantra of the design industry should not be ‘form follows function’ but ‘form follows environment.’”

The sleek, wedge-shaped building overlooks Trondheim’s harbour and features a distinctively angled pentagon-shaped roof plane interrupted by a circular opening. According to senior architect Andreas Joyce Nygaard, the angle of the roof is optimized to harvest solar energy, which is tricky in northern Norway, where the sun can be very low on the horizon in the winter and very high in the summer. The 21,500 sq.-ft roof produces 25% of the building’s energy needs, with the balance provided by more PV panels on the walls and a deep-water heating/cooling system.

But Nygaard points out that the Powerhouse was designed with a holistic view of energy that incorporates not only the building’s current consumption but also the embedded energy in the materials as well as their capacity to be re-used at the end of a 60-year life cycle. The glazing, for example, varies depending on the orientation of the windows to the sun so they provide the maximum amount of daylight to replace or augment artificial sources. The windows facing the sun (south and west) are smaller because, as he says, cooling the building takes a lot more energy than heating does, thanks to the extensive insulation used in the design.

The exterior cladding is a very thin, dark aluminum sourced from a supplier that uses recycled aluminum in its production, thereby minimizing embedded energy and carbon. The aluminum closely resembles the wall-mounted solar panels. “It has to have an aesthetic,” says Nygaard.

© Synlig.no

The building’s energy system includes “liquid light” – an interior lighting system programmed to adjust to the amount of available daylight – and a computer-operated network of windows and shades that open and close automatically as a means of maintaining fresh airflow instead of forced air.

Nygaard acknowledges that the Powerhouse’s performance depends on both its orientation and the absence of shadows from nearby buildings. He also says Powerhouse tends to generate surplus energy during the summer months, when energy is cheap and plentiful, but still draws on local power sources in the winter. “It’s not like we’re independent. We need to be connected to the grid.”

The next challenge for Snohetta’s powerhouse concept is figuring out how to store the surplus energy produced during the summer months, potentially in on-site energy storage devices like batteries. “At this point, there’s no solution for that,” Nygaard says. “If we have one, maybe we could be off the grid.”

Toronto journalist John Lorinc writes about cities, sustainability and business.

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Yet those construction flaws, in the aggregate, add up to something much larger and more problematic. By most estimates, buildings today account for about 40% of all carbon emissions, and therefore play a huge role in the accelerating climate crisis. We should be thinking of all those drafty apartments as if they were gas-guzzlers spewing carbon and other harmful gases into the atmosphere.

In many ways, the solutions to building-related carbon emissions are way less high tech than the gear required to run an electric vehicle. We also know where to find the sources. According to Omid Alaei, vice-president of QEA Tech, a 25-employee Markham engineering firm, as much as 50% of a building’s energy losses involve the so-called building envelope: windows, exterior walls, balconies, doors, and so on.

In low-rise residential structures, these leaks aren’t especially difficult to locate using conventional scanning techniques. Apartment buildings, by contrast, are far more difficult to accurately assess.

To remedy the problem, QEA Tech’s engineers developed a thermal imaging software system that can be loaded onto a digital camera-equipped drone. It flies around the exterior of a building, taking pictures to create what a three-dimensional heat map. The algorithm detects areas where there seems to be excessive heat loss and compares these to the so-called R values of those portions of the building – i.e. the rated insulation value of a particular window or segment of exterior wall.

When the system notices a significant difference, QEA Tech’s technology not only pinpoints the places where the leaks are occurring but also estimates the return on investment associated with a retrofit. Alaei cites one building where the drones located a piece of wall that was missing insulation. The annual cost of the heat loss was about $2,000 while the installation of the replacement insulation set the property owner back by just $500 – a clear win. (The scans themselves range in price from about $5,000 to $30,000, depending on the size of the building).

Such scans, he adds, have become increasingly popular among property managers working for insurance companies and other institutional investors purchasing multi-unit residential buildings. “We’re targeting high rises because there’s no [other] solution for that,” Alaei says.

Toronto journalist John Lorinc writes about cities, sustainability and business.

The post How drones are heat mapping high-rise energy guzzlers appeared first on Corporate Knights.

Since 2009, I’ve worked with Ethical Markets Media to publish the annual Green Transition Scoreboard. Our latest report details more than $10 trillion of private investments in renewable energy, energy efficiency, green construction, corporate green R&D and life systems over the last ten years.

The full report, titled Transitioning to Science-Based Investing, contains many provocative thoughts from renowned futurist Hazel Henderson. Henderson reveals how science-denial is a huge source of financial risk in today’s markets, referencing the Network for Greening the Financial System’s Reporting for a Secure Climate that shows $1 trillion to $4 trillion in potential liabilities in the energy sector alone.

She says financial systems and global markets are still operating on “anthropocentric textbook formulas, erroneous views of ‘human nature’ and resulting obsolete models of risk, focusing on short-term monetary rewards. Since price data is always historic, they are often backing into the future looking through rear-view mirrors.”

It’s not all doom and gloom. Henderson takes her title of Futurist to heart, showcasing some truly inspiring developments in sectors like energy, water, pollution cleanup, and – my current favourite – sustainable agriculture. With so much buzz around Beyond Meat’s successful initial public offering (IPO), there’s lots of investor appetite for sustainable foods. We’re keeping our eye on everything from halophytes – plants that grow in seawater – to insects as a sustainable source of protein.

Here’s a quick breakdown of private investments to date since 2009:

Renewable energy – Now at $4.419 trillion. Growing strongly, as fossil fuels become “stranded assets” and with the rise of electrification in transport.

Energy efficiency – Grew to $2.172 trillion, which reduces company costs and is the driver of the circular economy where many companies now compete to upcycle all kinds of previously ignored waste streams, for example, TerraCycle and ECOR. Efficiently using all resources creates widespread ripple effects (jobs creation, etc.) and will be central as electrification and better storage advance in transport and other sectors.

Life systems –Includes investments in water, land, remediation, waste and recycling, green infrastructure, which topped $1.9 trillion. The entire current global food system is being disrupted by a host of external forces. We forecast the continued acceleration of the current shifts in our global climate along with the further expansion of alternative plant-based foods and beverages. Also, the lowest hanging, viable shift will be toward salt-loving halophyte foods which can thrive on the planet’s 40% of degraded, desert land and 97% saltwater.

Green construction – This sector advanced strongly to $1.265 trillion, ranging from “low-tech” passive solar buildings to “high-tech” and new construction methods that use biomimicry, including copying the design principles that termites use to keep their mounds cool.

Corporate green R&D – Grew strongly to $581 billion. This sector is also heavily weighted in favor of automotive industries and their shift to electric vehicles, batteries, energy generation, conservation and distribution. Commitments are mostly from car companies’ R & D in electric vehicles and batteries.

Having tracked investments in green sectors for 10 years, I’m encouraged by the speed and scale of the growth that I’m seeing. For a long time, the knock on green sectors was that they weren’t economically competitive without subsidies. Now they’re competing despite a political shift toward populism that is not exactly friendly to the environment. Climate action-curbing politicians like Donald Trump and Doug Ford won’t stop the growth of the green economy, they can only slow it down. The climate crisis is quickly rising among voter priorities, and the political pendulum will swing back at some point, when these sectors will grow even faster.

There’s still much work to be done if we are to avert the worst-case climate scenarios and build a sustainable economy. Ten trillion is a major milestone, but it’s still just the beginning. We forecast continued acceleration of the current shifts in our global economy, and I’m excited to watch the numbers keep growing.

Tim Nash’s Sustainable Stock Showdown will return next week.

The post Green investments top $10 trillion worldwide appeared first on Corporate Knights.

The trip itself was routine. Field was part of the engineering services team at electronics manufacturing giant Celestica. Visiting customers and satellite facilities in other countries was part of the job, and he enjoyed it.

Yet on this day the journey home was anything but routine.

Field, 37 at the time, was mid-flight when he began to feel a sharp pain in his chest. His breathing became short and rapid and his heart rate spiked. He was in distress and trapped on an airplane, and all signs pointed to what doctors determined was a pulmonary embolism.

“It was scary,” he says.

The good news is that Field survived that 2012 experience, but his full recovery still required six months of sick leave. It gave him a lot of time to think about life, his wife and infant son, and his future. “With that 50-50 life and death moment, I came to the decision I wanted to do something very impactful in my work life,” he says. “I wanted to align my personal beliefs with my career trajectory.”

In what Field describes as a “serendipitous moment,” he learned upon returning to work that there was a job opening for a new sustainability manager, part of a renewed effort by Celestica to boost operational efficiency and turn waste streams into profit centres.

After 15 years at the company, it was the kind of role Field needed – and the role he ended up getting. He became, in essence, a sustainability change agent within a 25,000-employee company with operations in 14 countries.

Joined by a core team of five, led by Todd Melendy, vice-president of sustainability and compliance, his mission is to work with mid-level managers across Celestica’s operations – from engineering to logistics to packaging – and sell them on the idea that approaching day-to-day activities through the lens of sustainability is good for business.

“It’s all a reframing exercise,” Field explains. “I show through business cases and proof points that this will help them make their financial objectives, and at the same time they can go home and feel proud of it and talk to their families about it.”

Closing the loop

With $5.6 billion (U.S.) in annual revenue, Celestica is one of the world’s largest electronics manufacturing services (EMS) company. It designs and engineers electronics products for its customers, manufacturers those products, and can manage the supply chain from start to finish.

The company’s core business over the years has been making circuit boards and doing final assembly for a range of electronics products, from telecom switches and airplane cockpit equipment to smart phones and medical devices. Past and current customers include BlackBerry, Cisco Systems, Honeywell Aerospace and Nortel Networks.

“Solder is our life,” says Field as we walk past a training lab within Celestica’s sprawling Toronto campus, which serves as its global headquarters. The lab is used to teach college students how to properly solder, which sometimes requires the kind of delicate touch that automation doesn’t provide.

Just as those students are learning to put circuit boards together, a team in another area of the building is busily taking products apart. Field leads us down a hallway where to the right are big boxes used to collect product packaging for recycling. We then enter a restricted area and walk along another hallway lined with shelving that is stacked with an assortment of boxes and bins, each designated for a particular item – random chair legs, old office phones, used computer monitors, and worn in keyboards, etc.

Compared to the rest of the building, it’s not a pretty sight – an example of getting dirty to get clean.

Field says employees are encouraged to reuse the items internally. If there’s no opportunity for reuse, they gets tossed into one of several large bins in the adjoining room where a team of Celestica employees spend their days dismantling and separating each piece. It’s not just Celestica’s own waste, but also defective items and other e-waste from its customers.

Celestica used to treat this part of the business as a cost centre. Like most companies, it paid somebody else to take the material off its hands. But that also meant giving up control at a time when customers want assurances of proper disposal. Will the e-waste end up in a landfill in a developing country? Will local scrap yards strip out what’s valuable and dump the rest? Could either scenario be on the evening TV news, a potential PR crisis in the making?

Value in values

Homeowners like to think that the mystery people who pick up electronic waste from the curb are doing us all a favour by recycling these products responsibly. But there are many shades of recycling, and that e-waste often ends up in the hands of scrap dealers who don’t comply with environmental regulations.

To get at the copper in wiring, for example, some will burn off the plastic, rubber and insulation. To get after the valuable metals on a circuit board, they’ll pluck out what they want and send the rest to landfill – or worse, illegally dump it. It’s not a pretty business.

“The open burning and toxic dumping pollute the land, air and water and exposes men, women and children to poisonous emissions and effluents,” according to a 2013 e-waste report from the World Intellectual Property Organization (WIPO), pointing out that most of this e-waste ends up in developing countries. “The health and economic costs of this trade are neither borne by the developed countries nor by the waste brokers who benefit from the transaction.”

Celestica saw the importance of maintaining more control over the e-waste it handled, but after some research it also began to realize just how much value was there to extract. A tonne of high-grade e-waste typically carries 10 ounces of gold, 20 ounces of silver, an ounce of palladium and 200 kilograms of copper. Sometimes a small amount of platinum is present as well.

“All of these components and circuit boards have precious metals in them,” says Field, pointing out that the USB plug on a computer keyboard has gold on its tabs that most people just forget about. “If you break them apart down to their base elements, you might get 20 times the amount you would have otherwise gotten.”

The growing realization of the value within e-waste can be seen by the number of patents filed annually that are related to e-waste recovery and recycling. Global e-waste patents rose from less than 50 a year in 1980 to more than 650 a year in 2010, WIPO reported.

Rising market prices for various metals is a big part of the increase. This is particularly true for rare-earth metals, given concerns around resource scarcity as demand for such materials grow.

Tony McDermott, operations recycling manager at Celestica, has spent the past 10 years trying to show top management the business case for mining Celestica’s own e-waste. The company has since bought into the idea and is now working to expand it into every corner of its global operations network.

“They stopped viewing this stuff as waste and started viewing these waste streams as commodity streams,” Field explains. “As soon as you flip that equation for them, your garbage instantly becomes a profit centre.”

Broker of best practices

Celestica, like other large manufacturing services companies, is in a unique position as a company that makes products for others. It has about 100 customers worldwide, and they all fall somewhere along the sustainability learning curve – from laggard on one extreme to groundbreaker or early adopter on the other.

“With some of the more progressive ones you can learn tips and tricks,” says Field, pointing to Cisco as an example of a customer that has helped Celestica learn how to lower the carbon footprint of freight and logistics. This put Celestica in a position to share that wisdom with other customers who have fallen behind on the learning curve. “There’s a huge teaching opportunity.”

Some call this lateral innovation, or technology brokering. The idea is that a problem solved in one market or company can be repackaged to solve a problem in another. Field says it’s “part of Celestica’s advantage.” The company, for example, now regularly shows off what it’s doing around equipment re-use and e-waste recycling, partly to impress customers but also in hopes the approach will inspire others to act in a similar way.

That the company takes sustainability seriously will, it hopes, prove a selling point for some current and future customers that face growing pressure from investors — and their own customers — to green up their game. Celestica was the only EMS company to make it onto the 2015 Corporate Knights Global 100 ranking, and it was one of only 12 Canadian companies on the international list. Domestically, it ranked 15^th on the 2015 Corporate Knights Best 50 Corporate Citizens in Canada list.

It’s also one of eight founding members of the Electronics Industry Citizenship Coalition, which was established in 2004 “to create an industry-wide standard on social, environmental and ethical issues in the electronics industry supply chain.”

The company released its first corporate social responsibility and first environmental sustainability reports in 2010, though CEO Craig Muhlhauser has been a strong backer of sustainability initiatives since taking on the top job in 2006.

Sights on solar

When Ontario introduced its feed-in-tariff program for renewable electricity back in 2009, Celestica saw an opportunity for growth. A local content provision in the program rules meant that foreign companies wanting to sell into the Ontario market had to establish their own module and panel assembly facilities or hire someone local to do the assembly.

Celestica quickly positioned itself as the manufacturer of choice, not just for solar but also for the power electronics that connect panels to the grid. Customers included Recurrent Energy, at the time owned by Sharp (and acquired this year by Canadian Solar), and SolarBridge, a maker of microinverters now owned by SunPower. Other renewable energy customers include Lumos Solar and SMA Canada.

At peak operation, Celestica’s Toronto facility was churning out 235 megawatts of panels a year, roughly equivalent to the capacity of a small coal-fired power plant. The facility, established in 2011, produced its millionth module in November 2013. It’s an impressive finely tuned operation, but also flexible enough to adjust to customer demands.

While solar panel and inverter manufacturing represents today a small portion of the company’s total revenues, Field says there’s a commitment to grow it – possibly even moving into the energy storage manufacturing game, given rising battery demand for use in electric vehicles and grid storage.

The “smart energy” market, he says, “is a high-priority area for us.”

Based on what Celestica has learned at its Ontario operation, the company is well positioned to expand its solar manufacturing capacity to markets in Asia, though it has not disclosed whether it plans to do so. The future of the Ontario operation is uncertain, however, given the province’s gradual phaseout of its feed-in-tariff program and elimination of the local content requirement, which was declared anti-competitive by the World Trade Organization. “The market for solar panels is declining and manufacturing of solar panels on-site is expected to cease in 2016 with the end of the Ministry of Energy’s Feed-In Tariff Program,” according to a 2014 letter from Celestica’s law firm, Stikeman Elliott, to a committee of Toronto city council.

Still, the solar operation remains active today, and the company’s waste diversion goals are having a direct impact. For example, it has already launched a program that reuses or recycles the heavy wooden pallets used to ship solar panels to customers.

Todd Melendy, Celestica’s vice-president of sustainability, explained in a corporate video promoting the initiative that the pallets get beat up, are dirty, and after being used once usually end up being sent to a landfill. “In one quarter alone we had 4,000 of these pallets,” he pointed out. “This is the equivalent of 2,000 fully mature trees. Sending 2,000 trees to landfill, and then cutting down another 2,000 trees to manufacture new pallets is not great for the environment.”

McDermott’s team took on the challenge. The cafeteria in the Toronto campus was going through a renovation. Instead of letting the old conveyor-based dishwasher system be scrapped, McDermott repurposed it as a high-pressure, semi-automated pallet washer that recycles the water it uses.

Once cleaned, the old pallets are inspected, repaired and reused to ship out newly manufactured solar panels. Those beyond repair are shredded and donated as animal bedding. “Giving it away for free is better than sending to landfill or paying to burn it,” Field says.

McDermott estimated that in just three months the company avoided $140,000 in costs by using the new pallet-cleaning system. But his team is not stopping there. For the past two years, they have been researching the best way to recycle old or defective solar panels, a service expected to grow in demand once the first large wave of solar panels installed 10 years ago reach the end of their life.

Field says a chemical process has been explored as a way to delaminate the panels — one of the more challenging parts of the dismantling process, which requires separating the silicon from its backing and the glass —  but there was concern about the volume of chemicals required. “We know it will work but Tony has been focusing his efforts on non-hazardous methods,” he says.

To inspire new and creative approaches, Celestica sponsored a sustainability case competition earlier this year at the University of Toronto. One of the participating teams came up with a steam-based process for delaminating the panels, but it was too energy-intensive. McDermott is now working with community colleges around Ontario on different low-carbon methods for harnessing the required heat, such as using waste heat.

When Field talks about these initiatives you can tell he enjoys his job. You can also see that the wheels are always spinning in search of the next idea that will squeeze even more productivity out of the resources the company uses.

“To be able to work on something I’m passionate about in an industry I’m passionate about in a company that’s given me the permission to grow and change, it has been a triple win,” he says.

Does it Matter?

But is a focus on sustainability performance really giving Celestica an edge over competitors? Rob Young, a technology analyst at Canaccord Genuity, is skeptical. “I don’t think it makes a difference in their ability to get business,” says Young, pointing out the industry’s razor-slim margins. “There’s not really a lot of room in there to worry about environmental impacts.”

Field says it’s a common misconception about the importance of sustainability. For many of Celestica’s customers, he says, protecting the brand is paramount and drawing media attention because of ethical misconduct somewhere along the supply chain is something to be avoided. In that sense, Celestica’s approach to sustainability is a key part of a customer’s risk-mitigation strategy.

He says Celestica is also increasingly seeing sustainability showing up on requests for information from customers. “For some of our customers, sustainability and CSR related metrics account for the same number of points as key metrics like on-time-delivery and quality.”

Finally, more customers are becoming aware that a “triple bottom line” approach is just good business. “We’re proving time and again that when we eliminate waste, conserve energy, or retain skilled employees that it goes directly to the bottom line.”

He recognizes that strong sustainability practices alone aren’t enough to win business. “But it can be that cultural ‘nose-ahead’ at the finish line.”

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