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Stop wasting your energy

A recent Masterclass with OPNBuildings, HaysMac and Crystal Associates explored why many sustainability strategies fall short. The discussion highlighted a consistent pattern: leaders focus on carbon targets without understanding the energy systems that need to support them. Because when energy is ignored, every decarbonisation plan stands on weak foundations.

Why decarbonisation efforts fail

Many organisations treat carbon as the outcome. This creates the false impression that carbon reduction is the primary goal. Carbon is only a measure: sustainability depends on understanding how energy is used and where it is lost. Companies often assume unlimited capacity or rely on offsets rather than improving performance. This widens the credibility gap around net-zero commitments.

Decarbonisation fails when energy is not measured, tracked, or managed accurately. Leaders struggle to predict future demand. And this only makes sense: working with spreadsheets and fragmented information, it’s easy to overlook inefficiencies. Without the right insights, it’s easy to miss early signs that systems are not performing as expected. This leads to ambitious plans built on uncertain ground. Money is wasted. Capacity is strained. Strategy becomes noise rather than impact.

Treat energy as a necessary input

A stronger approach begins with treating energy as a critical input. Organisations need clear scenario planning: the ability to map goals, constraints, and baselines in one place. A structured way to review progress and adapt.

The message is clear. Stop wasting energy. Build sustainability on real insight and real performance. Understand demand, capacity, and efficiency. Only then can sustainability plans become credible, deliverable, and financially sound.

The risk no one’s managing

Every well-run organisation understands the importance of risk management. Identifying, avoiding, and mitigating risk is second nature in finance, operations, and governance. Yet when it comes to energy, that discipline often disappears.

For decades, energy was treated as a relatively stable cost and a guaranteed resource. Prices rarely moved enough to matter, and supply was assumed to be secure. So few organisations built the same level of systems or scrutiny around energy that they did around financial or operational risk.

That complacency is now becoming a liability. Who’s managing the risk connected to the energy that keeps your operations going?

A new landscape of risk

Energy risk today looks nothing like it did a generation ago. The shift from fossil fuels to electrification has created new dependencies — and new vulnerabilities.

Oil and gas once offered security of supply. Now, as demand for low-carbon electricity accelerates, networks are struggling to keep up. Utilities are imposing caps on the amount of power they can guarantee, and access to electricity — once taken for granted — is no longer guaranteed.

It’s easy to say, “Let’s use energy more efficiently.” But that’s impossible without the right structures, frameworks, and insight into how energy is actually used. Without accurate data or reliable reporting, efficiency slips quietly. Equipment drifts from design performance. Processes waste energy unseen. What starts small becomes costly — unnecessary spending, wasted capacity, and growing exposure to energy volatility.

And that brings us back to the real issue: risk. When supply is limited, waste isn’t just inefficient. It’s unsustainable.

Managing energy as a core business risk

Energy can no longer be excluded from the risk framework. Understanding where it comes from, how it’s used, and how it might be managed is fundamental to operational continuity.

And managing energy starts with visibility. Reliable data systems, clear forecasting, and regular reporting are the foundation of control. When organisations treat energy with the same rigour as finance — structured systems, auditable data, and forward-looking planning — they not only reduce waste but build resilience.

Because if something is essential to keeping your business running, it deserves to be managed like every other critical risk.

Why energy risk now sits on the CFO’s desk

Access to capital now depends on clarity.

Banks, investors, insurers, and regulators are no longer waiting for organisations to act voluntarily on sustainability. They’re setting the terms. If a company can’t show credible, verifiable data on its carbon and energy performance, its ability to borrow, insure, or attract investment will start to tighten.

That responsibility now lands with the CFO. Frameworks like the IFRS sustainability standards are reshaping how business value and risk are measured, and energy data sits right at the centre. The quality of that data will decide whether a sustainability report holds weight — and whether a company can prove it's managing risk responsibly.

The missing link in financial governance

Most finance leaders assume their organisations already have reliable data. But in reality, energy and associated carbon information is often scattered, incomplete, or unverifiable. It sits in different systems, owned by different teams, and is rarely audited. That gap leaves sustainability disclosures exposed and puts credibility on the line.

Finance teams are used to basing every decision on solid evidence. Forecasts, budgets, and cash flow all rely on structured, traceable data. Energy performance should be no different.

Without the same discipline as shown to the financial aspects of the business, decarbonisation plans are just educated guesses.

From compliance to control

Financial planning and decarbonisation are connected. Every spending decision affects both cost and carbon. Managing that balance takes the same structure and accountability that finance already applies to reporting and risk.

Energy data needs to be treated like financial data: it must be consistent, auditable, and ready for scrutiny. Achieving that means linking finance, operations, and sustainability around shared standards and integrated systems.

Technology helps close the gap. Real-time monitoring, scenario planning and reporting tools can turn energy performance into something measurable and dependable — a financial metric that informs investment decisions, supports compliance, and protects access to capital.

Clarity as a measure of value

Energy risk is financial risk. Treating it that way builds resilience and trust, both with regulators and with the market. Clear and reliable energy data is no longer a nice-to-have; it is a must-have.

Clarity now defines credibility. And credibility decides access to capital.

Reporting under CSRD starts this year—here’s what that means

The Corporate Sustainability Reporting Directive (CSRD) came into force across Europe in January 2023. Globally, countries are introducing their own frameworks, with momentum building toward greater alignment across sectors, markets, and reporting standards. But it’s 2025 when the real pressure begins.

This is the first year that thousands of large companies across the EU are expected to report under the new framework, using data from 2024. For sustainability leaders, that shifts the conversation from planning to proof. It’s no longer about whether your organisation is preparing. It’s whether your portfolio is ready.

CSRD demands more than ambition. It requires clarity, structure, and verifiable insight into how your assets actually perform. And that means energy efficiency, emissions, and operational transparency are now headline issues—not backend metrics.

What UK companies need to know

Even though the UK is no longer part of the EU, the CSRD could still apply. If your company has securities listed on an EU-regulated market, or if it generates more than €150 million in EU turnover, you may fall within scope. This includes UK firms with large EU subsidiaries or branches that generate significant revenue. It’s critical to review your structure now. Reporting obligations will expand, and compliance won’t just mean better paperwork—it means disclosing meaningful, auditable sustainability data across your operations.

Early CSRD reporters are flagging around 24 material topics and 40 key impacts, risks and opportunities on average—but there’s no consistent way they’re doing it. The takeaway? If your team isn’t aligned on how to approach double materiality, you’re going to struggle to report clearly or credibly.

Not just data—disclosure with direction

CSRD doesn’t just ask for more data. It requires meaningful and auditable reporting on how your operations align with environmental, social, and governance (ESG) expectations. This includes specific disclosures on energy use, carbon emissions, climate risk, and the resilience of assets across your portfolio.

This level of transparency means moving beyond estimates and modelled projections, toward real-world performance indicators that stand up to external scrutiny. Friends of EFRAG notes that while Scope 1 and 2 emissions are widely reported with clear targets, Scope 3 remains a significant challenge, especially across supply chains. Many companies set net-zero targets without clear pathways to reach them, making performance tracking and transparency non-negotiable.

The organisations that will thrive under this directive are those who already know how their buildings perform—and who can clearly show what’s improving, what’s not, and what comes next.

The role of building performance in CSRD

Buildings are one of the biggest contributors to operational emissions. That makes them a focal point in CSRD reporting, whether you manage a portfolio of offices, retail, logistics, or mixed-use assets.

But the real challenge isn’t the emissions themselves. It’s knowing where they come from, what’s driving them, and how to bring them down—credibly, not theoretically.

That’s where operational insight becomes essential. You don’t need hundreds of sensors or new systems to get started. Often, the first indicators are already available. What’s missing is a clear line of sight between performance, targets, and action.

Don’t wait for compliance to catch you

CSRD is being phased in, but the reputational pressure is already here. Investors, regulators, and occupiers are all looking for clear evidence of environmental performance. And with carbon reporting under greater scrutiny, gaps in visibility won’t just delay compliance—they’ll erode confidence.

It’s not about racing to comply. It’s about using CSRD as a structure to validate what you already know: where performance is strong, where the friction points are, and how to prioritise action that actually delivers impact. Readiness isn’t about ticking boxes. It’s about knowing where you stand.

You don’t need to have all the answers. But you do need to be clear on how your portfolio performs today, and what needs to happen next.

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New EU Energy Directive: what it means for commercial real estate

In April 2024, the European Parliament adopted a major update to the Energy Performance of Buildings Directive (EPBD)—and it’s now officially in force. While the direction of travel has been clear for some time, this revision puts regulatory weight behind it. For the first time, minimum performance standards for non-residential buildings are legally binding across the EU: class F by 2030, class E by 2033.

But the most significant shift isn’t just the targets. It’s the infrastructure being built around them—data registers, renovation passports, and full lifecycle visibility. The EU isn’t just asking for efficiency. It’s mandating transparency.

This is about more than compliance

The directive marks a clear move toward transparency. Alongside updated energy thresholds, it introduces renovation passports, national building registers, and more robust operational reporting. These additions point to a future where performance is no longer privately managed or loosely defined. The data will be centralised, comparable, and public.

What this means for commercial real estate is simple: if you don’t have a clear, verified understanding of how your assets perform, you’re at risk. Once performance data enters the public domain, any gap between what you report and what’s actually happening on the ground becomes a reputational and financial liability.

What about the UK?

While the UK is no longer bound by EU law, the direction of travel is similar. The UK’s Minimum Energy Efficiency Standards (MEES) already ban new leases on commercial properties rated below EPC band E, and by 2030, all leased non-domestic buildings are expected to reach band B. That’s a sharper target than the EU’s class E. And with future updates to the UK’s Energy Performance of Buildings framework under review, pressure is only building. For UK organisations with EU assets—or those eyeing investment or partnerships across Europe—alignment with EPBD-style transparency isn’t optional. It's a signal that the UK market, too, is shifting from ad-hoc compliance to systemic accountability.

Decisions need to be rooted in real data

Energy Performance Certificates (EPCs) offer only part of the picture. Without real-time visibility, strategic decisions around retrofits, asset use, and financial planning remain reactive. The longer that visibility gap remains, the harder it becomes to respond to tightening regulation with confidence.

Those ahead of the curve aren’t waiting. They’re building internal clarity now—using operational data to validate performance, identify inefficiencies, and prioritise actions that deliver measurable impact. That clarity allows for faster, better-informed decisions that protect long-term value and resilience.

We believe action starts with clarity. You can’t improve what you can’t see—and that’s where many sustainability plans stall. We help leaders identify waste, track performance in real time, and unlock the insights that drive down risk before it shows up in your compliance report.

Grid capacity is becoming a hidden blocker to net-zero

Across Europe, organisations are pressing ahead with electrification. Gas boilers are being replaced with heat pumps. Retrofit plans are being drawn up. Net-zero strategies are moving forward.

But too often, these projects run into a critical barrier: the grid can’t supply the energy needed to power them.

Heat pumps don’t fail—until they do

The issue comes down to load. Heat pumps require a significant amount of electricity. When they're sized to match the output of a gas boiler, without first reducing total demand, they often exceed the site's available grid connection.

That triggers a cascade of problems: delays while waiting for extra capacity, costly upgrades to the connection. Or no upgrade at all—because the capacity simply isn’t available.

What should have been a significant decarbonisation step becomes a bottleneck. The system is in. But it can’t be turned on.

It’s not an edge case—it’s happening everywhere

In the UK, more than £200 billion in energy projects are currently stuck in grid connection queues (National Grid ESO, 2023). In the Netherlands, grid operators are pausing new connections in areas of high demand. Capacity is capped, and electrification is outrunning infrastructure.

The result? Heat pumps sit idle. Buildings go unheated. Projects stall—not because the ambition was wrong, but because the strategy skipped a step.

What’s going wrong—and how to fix it

The core problem isn’t the heat pump. It’s the assumption that you can plug it in and carry on as before. That approach ignores the one factor you can control: demand. It’s like switching to an electric car but never checking how far the battery can go. You keep driving the same way and then wonder why you’re stuck on the side of the road.

When you optimise performance first, by fixing controls, tuning systems, and reducing waste, you lower the baseline energy use. That means you can install a smaller heat pump. One that might work within the power you already have. One that doesn’t trigger delays, redesigns, or overspend.

Start with the building, not the tech

Sustainability isn’t about what you install. It’s about what you stop wasting.

That’s why insight is essential. You need to know what’s running, what’s using energy without delivering value, and where efficiency can be gained now, not once the project is already in motion.

Your infrastructure has limits—budget, space, and now power. The best projects don’t ignore those limits. They design around them. If electrification is the goal, efficiency is the enabler, and the strongest net-zero strategies are the ones that can actually be delivered.