Broker briefing: how flexspace can help businesses achieve their sustainability goals

Broker briefing: how flexspace can help businesses achieve their sustainability goals

With clients’ ESG commitments more vital than ever, knowing the benefits around flexible working and workspaces is a must

When it comes to the key focuses for commercial real estate in 2021, one priority stands out: sustainability. The pandemic has raised awareness of climate change across society – 70% of participants in an international survey by BCG said they were more aware since Covid-19 that “human activity threatens the climate and that degradation of the environment, in turn, threatens humans”. It’s an emerging consciousness that nobody can fail to be aware of, and an area that companies will increasingly tackle by incorporating flexspace into their business model.

Does sustainability matter to tenants?

ESG – environmental, social and corporate governance – has become a key driver for the investor community coming out of the pandemic, so companies will have it at front of mind when making their own choices about offices and other real estate. The energy used by buildings and embedded in their construction dictates that environmental impact is paramount in the decision process – and that applies to tenants just as much as to building owners. Research by KPMG last year found that 83% of industry executives expect to see growing tenant demand for sustainable and environmentally-friendly buildings as a result of the pandemic. Flexspace, together with a hybrid working model, has the potential to make a significant contribution towards helping companies meet their sustainability targets.

Why is flexspace greener?

Put simply, flexible office space offers a more efficient use of real estate. According to infrastructure consulting firm AECOM, only 42% of desks are occupied in office buildings at any one time, based on a survey of 500 offices in 27 countries. That adds up to huge inefficiency, and as the company notes, the answer is to adopt more flexible spaces that “break the connection between one person and one desk”. In using flexspace, companies only have to take the square metres of floor space they require at one time, and as businesses expand or contract, their usage rises and falls accordingly – so that actual usage can be optimised at a much higher level.

Why does this matter?

Companies with more office space than they need fail to optimise their carbon footprint and will struggle to meet their own targets for carbon emissions. As things stand, buildings of all kinds are responsible for almost 40% of greenhouse gas emissions – including 28% of emissions through heating, air conditioning, lighting and other operational use, and 11% of emissions embedded in materials and construction. So, reducing a company’s overall amount of office space will directly help tackle climate change.

Are there benefits to sharing?

Co-working is one way of sharing space with other organisations, and that means you can also share resources, such as photocopying or printing facilities, reception and office support, restaurants and cafés – all of which use energy and other resources. That’s not to mention office furniture. In the UK alone, some 1.2 million office desks and 1.8 million office chairs end up in landfill each year, according to the Waste & Resources Action Programme (WRAP), based on figures produced in 2011.

What about commuter emissions?

The main environmental benefit of a hybrid working model, where colleagues work partly in a centralised office and partly remotely, from a local office, is that it reduces the workforce’s commute – the single biggest thing companies can do towards meeting their ESG commitments. Companies can act on this by offering flexspace as satellite offices closer to employees’ homes, usually in suburbs or rural areas outside of cities. Commuting has significant environmental costs, such as carbon emissions and atmospheric pollution from vehicles: as Knight Frank points out, the eco-benefits of cutting down commuting were recognised as early as 1973, when Jack Nilles, a former NASA engineer proposed telecommuting from satellite offices as “an alternative to transportation – and an innovative answer to traffic, sprawl, and scarcity of non-renewable resources''. Giving the option of a local flexspace office also allows a company’s workforce to work in the heart of their communities – boosting the local economy, in the vein of the ‘15-minute city’ concept – taking cars off the road and reducing rail journeys.

Who’s doing it?

Most companies expect working from home part of the time to become a feature going forward. Those who’ve said they will allow it on a permanent basis include Microsoft, Facebook and Twitter. Global companies Standard Chartered and NTT (Nippon Telegraph and Telephone Corporation) have both recently signed landmark deals to use IWG’s worldwide network of workspaces to allow their employees to work closer to home. Those who’ve committed to adopting a hub-and-spoke model include Google, Fujitsu and Virgin Money. Expect to see more statements about flexible working and sustainability in company annual reports going forward; this is very much the future of work, with the clear ESG benefits just one area of improvement for those making the change.

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