In the green: How building decarbonization can be cost negative

There’s a prevailing misconception that going green will cost businesses, well, a lot of green. Many executives and stakeholders fear that embracing sustainability inevitably results in higher costs for businesses. In fact, while 98% of CEOs believe they have a responsibility to make business more sustainable, many still fear it will affect their profitability.

However, this doesn’t have to be the case. There is a wide array interventions that can lead to significant savings while also enhancing a company’s environmental footprint. Building decarbonization efforts in particular can be financially advantageous, and a range of simple, sustainable changes can contribute to a greener future while also offering significant returns on investment.  

Here are a few building-focused interventions that can lead to substantial savings: 

• Switching to LED Lighting: According to the Department of Energy, LED is “today’s most energy-efficient and rapidly developing lighting technology.” Compared to incandescent lighting, LED lights use at least 75% less energy and last up to 25 times longer. In fact, replacing 25 incandescent bulbs with LEDs could save a business around $3,700 annually on energy costs. This makes the investment in LED lighting a smart, cost-effective choice for reducing utility expenses. 
• Utilizing Smart Thermostat Technology: Smart thermostats optimize energy use by adjusting heating and cooling based on real-time needs. This reduces unnecessary energy consumption, helping businesses lower their utility bills and improving overall energy efficiency. Data from the Environmental Protection Agency found that on average, users save 8% on utility bills when using smart thermostats. 
• Enhancing Insulation: Improving insulation may not seem like a major upgrade, but it plays a crucial role in maintaining energy efficiency. For example, installing double-pane windows can significantly reduce heat loss in winter and keep buildings cooler in summer; making the switch to double-pane windows can cut energy consumption by 24% in winter and 18% in summer.  
• Installing Heat Pumps: Heat pumps are an energy-efficient alternative to traditional heating and cooling systems. Though the initial investment can be higher, heat pumps work by transferring heat rather than generating it, resulting in significant energy savings over time. In fact, switching from an electric furnace to a heat pump can result in savings of 30-40% on energy bills, making them a cost-effective choice for businesses looking to enhance their sustainability.  

While many of these cost-negative interventions may be simple, a large portfolio can make decarbonizing at scale much more complicated, especially if some of these interventions have already been implemented or are not well-suited to the buildings’ needs and environments. As such, the cost of goods or labor can vary significantly by location, making the true cost difficult to ascertain. Robust energy modeling is critical to a strong decarb roadmap; however, it often requires extensive information about the property, its site, and viable energy sources.  

Odyssey, a machine learning-driven solution from Telesto Strategy and Optiml, streamlines this process by creating customized decarbonization roadmaps for each property. By creating digital twins, Odyssey can simulate the impact of different combinations of interventions, such as replacing windows or installing heat pumps, to determine which combination of interventions results in the optimal outcome.  

To learn more about cost-negative interventions for your business, contact us at info@telestostrategy.com.  

Other Telesto resources: Learn more about property-level decarb roadmaps using the power of machine learning. Find additional information on how to get started with ESG and build topical familiarity with our ESG Glossary as well as Telesto’s ESG Maturity Model.