Joint development of 12 indicators to comprehensively evaluate the merits of new construction and renovation of energy-saving buildings

This is an English translation of the news release issued by Deloitte Tohmatsu Group on December 11, 2023. If there is any discrepancy between the Japanese version and the English translation, the Japanese version shall prevail.

Tokyo, JAPAN, 11 December 2023

Deloitte Tohmatsu Consulting LLC (CEO: Masato Sase, hereby referred to as “Deloitte Tohmatsu”), a company of Deloitte Tohmatsu Group, and NTT FACILITIES, INC. (President and CEO: Kazuhiko Matsubara, hereby referred to as “NTT FACILITIES”) have jointly developed an index to comprehensively quantify the effects of new construction and renovation of energy-saving buildings. Buildings with excellent environmental performance can have many secondary, indirect, and synergistic effects by improving the office environment, such as promoting employee health and improving intellectual productivity. By using these indicators, it is possible to make positive investment decisions on the construction of energy-saving buildings, including not only energy reduction effects but also secondary effects. The two companies will contribute to the decarbonization of assets owned by companies and local governments by supporting investment decisions for new construction and renovation of energy-saving buildings such as net Zero Energy Buildings (ZEB).
 

Background and purpose of the initiative

As the reduction of energy consumption in buildings becomes an urgent issue in order to achieve carbon neutrality by 2050, there is a need to promote energy-saving buildings such as ZEB, which reduce energy consumption to virtually 0.

Buildings with superior environmental performance can have many secondary, indirect, and synergistic effects by improving the office environment, such as promoting employee health and improving intellectual productivity, as well as reducing turnover rate due to increased engagement. On the other hand, the cost-effectiveness of buildings with excellent environmental performance is often evaluated by the amount in reduction of CO2 and energy usage, and those effects are limited. As a result, deciding on introducing energy-saving buildings has been slow.

Given this background, NTT FACILITIES, which has long been designing ZEB and supervising ZEB construction as a ZEB planner, and Deloitte Tohmatsu, which has extensive experience in comprehensive support for carbon neutrality and knowledge of the well-being of employees working in office buildings, have been working since April 2023 to develop a quantitative evaluation method for the effects of energy-saving buildings other than reduced energy and utility costs. Effects other than reduced energy and utility costs are called Non-Energy Benefits (NEBs). In this initiative, we have developed evaluation indicators for NEBs, such as "Promote Health" and "Improve Intellectual Productivity," described below.

By using this evaluation index, it is possible to comprehensively evaluate the effects of new construction and renovation of energy-saving buildings in monetary terms and to appropriately evaluate the return on investment. In the case for an office building with a total floor area of 1,200 m2 and 30 full-time employees, it was estimated that the payback period would be reduced from 20 years to 4 years.

Definition of the NEBs evaluation index

The NEBs evaluation index was developed mainly to measure the effects of new construction and the renovation of office buildings. In developing the evaluation index, we comprehensively identified the effects of energy-saving buildings on stakeholders such as employees who use the office buildings, customers such as businesses and consumers, government and local governments, local communities, financial institutions, shareholders, investors, and NPOs and NGOs. In addition, we verified the validity of these measures in light of existing surveys conducted in Japan and overseas and defined 12 indicators as effective items for new construction and renovation of energy-saving buildings.

For the eight indicators for which data necessary for evaluation was obtained, calculation formulas for quantitative evaluation were prepared and verified. The formula for calculating the evaluation index was prepared by constructing a logic model that links the financial impact of each evaluation index with measures for new construction and renovation of energy-saving buildings, and by using existing data such as basic building specifications and operating conditions. We also plan to formulate formulas for the remaining four indicators as needed.

Approach to the NEBs evaluation index

For example, in the case of item 2, "Improve intellectual productivity," it is expected that energy-saving measures will improve thermal insulation, thereby achieving a thermal comfort environment and improving the intellectual productivity of employees.

The NEBs evaluation index can be refined to fit the actual situation by confirming internal data (information on facilities and equipment, information on employees, etc.) and information obtained from employee surveys, checking the usage of facilities and equipment, and holding interviews with employees.
 

Future prospects

In the future, we aim to accumulate knowledge by conducting quantitative evaluation of NEBs in more buildings, including buildings designed by NTT FACILITIES, and to conduct more precise quantitative evaluation in energy-saving buildings of NEBs, which are effects other than reduced energy and utility costs and reduction in environmental impact. Through this initiative, we will not only contribute to carbon neutrality by promoting the adoption of ZEB and other energy-saving buildings, but also aim to improve employee wellbeing and reduce CO2 emissions in Scope 3. We will also work with a wide range of stakeholders to promote decarbonization throughout the local community.

The NEBs evaluation index’s detailed quantification method and results verifications are published in the following white paper (only Japanese version available).

https://www.ntt-f.co.jp/profile/whitepaper/001/