Property and Infrastructure Specialists

Building Sustainability into your Asset Management Plan

Sustainability as defined by The United Nations, focuses on meeting the needs of the present without compromising the ability of future generations to meet their needs. The concept of sustainability is composed of three pillars: environmental, social, and economic—also known informally as planet, people and profits. While successful businesses align their sustainability goals to their values, it’s the savvy businesses who recognise that sustainability is integral to cost-effectively managing their assets.
Sustainability in your Asset Management Plan

Making the leap towards Sustainability

So, as a good corporate citizen, you’ve made the commitment that your company is going to be sustainable during the current decade. Well, that was the exciting and easy part of the journey. Have you actually considered if this commitment aligns to the target you’ve set?

Depending on your industry, you may already have to report on your greenhouse gas emissions, focusing on your Scope 1 and Scope 2 emissions. These are the emissions generated by operating your business from heat, steam or electricity you purchase. As the world moves closer to a global agreement to Carbon Net Zero Emissions by 2050, you will need to report on Scope 3 emissions, ie: the impact on emissions that your products or services generate.

Building Sustainability into your Asset Management Plan

To quote Henry Ford, ‘To do more for the world than the world does for you – that is success’. In today’s challenge to use less resources, this translates into “how can you optimise your business to achieve this target for the planet, while recognising there may be business benefits as well.” There are some simple structures that you can leverage in place to deliver the target. Some areas of focus to support meeting the desired state of sustainability include:

1. Procurement practices

2. Energy consumption and efficiency.

These areas connect the planet and profit pillars in a sustainability strategy.  

Procurement Practices

When looking at your organisation’s procurement policies and procedures, do you consider the complete life cycle of a particular item that is being procured?

Under Asset Management principles, an owner of an asset is also responsible for the appropriate disposal of an asset. Until recently, most organisations did not consider that the disposal of an item impacted their footprint in relation to sustainability. As a result, a significant amount of material was sent to landfill rather being recycled.

The procurement equation should consider what recycled materials can be added to improve the sustainability and potentially the efficiency of what is being procured. A simple example is the inclusion of recycled paper into the manufacture of new paper. Something that was once considered waste is now a resource. It reduces the use of new resource forests to be more sustainable in their use by using less in the manufacture of paper.

In the context of an Asset Management Plan (AMP), when procuring an item or a service, consider how sustainable is the item being procured. Does the item’s specification nominate how it is put together or what materials are to be used?

A good example of this is hot water systems. The current benchmark is instantaneous hot water, because of its energy efficiency, its size (the space requirements during construction) and the fact that it can be recycled at the end of life. However longer-term, as part of planned lifecycle replacement, suppose you didn’t have to use additional energy from natural gas, but could reuse energy that you had already used once? Installing a heat pump allows you to transfer heat generated by your air conditioning to heat hot water to your building. This is an Asset example of taking what was a waste product and transforming it into a resource.

As part of your procurement approach, if you had procured green energy to power the air conditioning, both your heating for hot water and cooling of air would be carbon neutral.

Building your sustainability targets into your Asset Management Plan will allow you to leverage a staged replacement of equipment (which had a fixed useful life independent to your targets) that considers the opportunities for recycling, reduction of resources and operational efficiency.

By making these small changes in your procurement practices, you can:

  • reduce your impact on the planet
  • positively impact the delivery of a service to people
  • either save money or increase profits.

Energy Consumption

Do you have equipment as old as the last oil crisis? How can Asset lifecycle planning move your equipment and your energy costs into the new age?

When it comes to addressing energy efficiency in equipment, take a long-term approach. Energy efficiency should form part of an AMP to transition assets over their lifecycle, rather than outlaying large amounts upfront to rectify or minimise issues in energy consumption.

I noted earlier about the opportunities that waste management generates. In this context, the Energy paradigm needs to change for how we consider energy. At present, most people consider energy to be electricity, gas or oil, water, wind or solar. ln fact, the definition of energy can be summarised in terms of hot and cold water, hot and cold air, plus the emergence of Hydrogen as a safe energy component.

In most circumstances, asset owners can partially offset their existing energy footprint by introducing energy produced on-site from a combination of solar and wind assets. However, due to their variability, they need to be supplemented by battery storage in order to move the needle closer to complete independence from the generation grid.

When we look at energy efficiency, it is usually focused on delivering a cost-saving in the first instance. However, there are emerging trends whereby the long-term investment in the development of shared infrastructure between different property owners within one precinct, is bringing benefits to a larger group. For example, buildings within one precinct can require different energy formats like steam, hot water, cold water etc. By combining the various energy demands, a solution like the use of a gas-fired tri-generation turbine may deliver significant energy efficiency and cost savings.

So, from an AMP perspective, energy generation, use and the subsequent distribution need to be examined to allow asset owners to optimise the sustainable use of energy types going forward.

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