Doing well by building good – Energy efficient AND healthy office space

The commercial real estate sector is currently confronted with new regulatory pressure to reduce the energy consumption of office buildings. Several governments have announced a minimum energy label standard for commercial buildings as a condition for operations in the upcoming decade. A recent article from the Financial Times illustrates that a vast majority of office buildings in London and the UK in general do not have the necessary energy label B to stay operational after 2030. Investing in energy-efficient buildings can be expensive and provides pitfalls when the renovations lead to an unhealthy indoor environment for occupants. The current shortage of labor supply and employees’ increasing request for working from home puts extra pressure on providing them with an attractive office space. However, there is a vast number of scientific studies that give real estate developers and businesses advice on how to build an energy-efficient and healthy building – and it can even be profitable!

While there is a common agreement on how to make a building more energy efficient (for example by installing isolation systems or heating pumps), it is less clear how to make it healthier for its occupants. In that regard, real estate developers need to consider two major determinants: Indoor temperature and indoor air quality. Heating and air conditioning a building to keep it at a stable temperature level (often around 21°C) can be very energy demanding, so it is only fair to ask if a stable temperature is really needed. A recent meta-analysis of 35 studies showed that within a temperature range of 18°C to 34°C, no relationship between temperature and office work performance could be found. However, there is the idea in scientific discourse to allow the temperature to drive between 17°C in the morning and evening and 21°C during the midday for a normal office day. Such a dynamic temperature drift comes with major health benefits and does not decreasethe perceived comfort level of occupants. Adding local cooling and heating devices like an air fan or a heating desk can also reduce any negative effects on cognitive performance induced by the temperature shift.

Air quality is a straighter forward story. Increasing evidence confirms the negative consequences for the cognitive performance of office workers if ventilation rates are insufficient. The negative relationship between low ventilation rates and high carbon dioxide levels indoors has been confirmed in a systematic review including 38 studies across office buildings, school classrooms, and laboratory studies. Thus, the evidence emphasizes the importance to have sufficient ventilation rates.

This leaves us with the question if investments in the building envelope to make it a healthy building are also profitable. Allowing the indoor temperature to drive between 17°C and 21°C during the day can lead to a 59% reduction in energy consumption (in kWh), which has been shown in a case study for a Swiss office building. Additionally, installing ventilation systems is an effective way to reduce the spread of airborne infections and thus reduce sickness absence costs. A study examining a sustainable office building in The Netherlands confirmed such cost reduction. Building labels like LEED and WELL are strong signals that a building is energy efficient but also offers a healthy and generally satisfying indoor environment for occupants. And indeed it has been shown that investments in green buildings are profitable, leading to 16% higher selling prices and 3% higher rental rates per square foot than otherwise identical buildings.

Thus, the best response to tightening regulatory pressure and rising expectations from employees is to invest in office space in such a way that it not only reduces energy costs but also offers a healthy and performance-enhancing environment for office workers. Real estate investors will be rewarded with higher property values while renting businesses will benefit from reduced health-related costs and higher productivity of their employees.