📢 Our sixth podcast 🎙/article, now with Nicholas White, Co-Founder and managing director of Smart Building Collective / Certification
This was our first podcast with Nicholas White despite the fact that he is our co-operating partner for more than three years. We were very much pleased with his first ever visit in Slovakia and Bratislava. Smart Building Certification is the first smart building certification system in the world. We already have the first smart building certified in this system in Slovakia as well. This year was certified as first Nivy Tower. Thanks to his visit we had a nice opportunity to introduce this certification system as well as Smart Building Collective to Slovak real estate market in this special personal way.
💡 The “Real Estate Better” is our series featured by PropTech Slovakia and its partners from Slovakia and abroad. Each episode is devoted to actual real estate challenges, while we share tips, solutions and experiences on how to solve them. This episode was focused on challenge of smart building certifications: 🔦 “What is behind smart building certifications?”.
Links to the episode recorded on 15 December 2023 on www.youtube.com:
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Time stamps/chapters
00:00 Intro
01:23 First loaded question.
03:00 Disheartening experience of implementing tech over people
03:47 Research into human performance and burnout with CBRE
04:53 First aha moment, like there’s something here that we need to dive deeper into it
06:20 Where the idea was born?
10:57 Emphasis of the market years after
12:56 Not so much the batch than the process
15:56 More dynamic and context-driven model
18:31 Recertification on demand
19:29 How does it work?
22:22 Peer review model
23:43 What’s the best part about being an assessor?
26:25 Audit
28:40 Platinum over time with less and less technology? That would be interesting evolution…
31:39 How SBC serves to improve actual results of green certificates, WELL and/or ESG regimes
33:25 Power of collective
34:11 Certification of smart solutions
37:46 The original mission
39:21 Conclusion
Complete Transcription
(Dear visitor, this is complete transcription of our webinar and podcast made by the AI “Whisper”. Whisper is very good, but not perfect and we dared to make just a very quick human supervision of its work. Anyway, if you find some gaps, errors, etc. do not let them disturb you. You can freely contact us or any of our podcast participants via LI profiles, should you wish corrections or further explanations)
Milan
So, good morning. Thank you, Nicholas, very much for accepting our invitation.
To be honest, this is the kind of podcast that we do with PropTech Slovakia and its partners either from Slovakia or from abroad. We do it in a way that we introduce solution providers, consultants or anyone who can help real estate sector and we miss this in our country. We see a big value and that’s why we want to introduce it also in Slovakia or help it in abroad. It can be used in any way.
First of all, very much thank you that you came to Slovakia. It really pleased us when we heard that you could come because we cooperate for, I think, more than three years now. We have two assessors from Slovakia that help you to certify buildings and solutions in this time period. But in Slovakia, we certified the first building only this year. So, maybe first icebreaker question: What’s your reason? Why do you do this? How did you come to Smart Building certification?
Nicholas
That’s a loaded question. But first of all, thank you. Thanks so much for the invitation.
And it’s wonderful to be here in Slovakia with you and the team and to be constantly learning and opening up the horizons and thinking about what we’re going to do together in 2024. I think that’s just a really exciting time for us and our partnership. Yeah, where did it all come from? That is a loaded question. But, you know, personally, I started in the corporate sector.
I was working on big, large-scale ICT kind of transformation projects where we were implementing technology into companies. And it was always quite disheartening how…
Milan
For which company, if I may ask?
Nicholas
Oh, I used to work for, and I don’t know if based on the stories that I’m going to tell, and I’m just kidding.
I used to work for Canon first, Canon Europe. So, that was a big one. And then I worked for Ricoh. So, actually, Japanese companies, big Japanese companies and all about technology and printers and cameras and all the exciting stuff. A lot of what is used now in this podcast as well.
But we were doing these big IT transformation projects, and I was always quite disheartened by how organizations would, in a way, run over their people in that process, implement tech. And here you go, it’s in, and you get the value. And it’s like, well, no, the value is a whole another… That’s a whole another ball game.
You have to unpack what that technology is actually capable of doing, and then you have to align an organization and its people to actually use the technology in a meaningful way. Otherwise, what’s the point? The technology can actually make things worse rather than better. And so, we ventured into, first of all, transformation management, helping organizations change and transform, and research. My co-founder, Elizabeth Nelson, she was doing all kinds of research into human performance and burnout and why do people do what they do.
And it was actually kind of this perfect match, bringing those two worlds together. Because if you can understand why things are the way they are, you can probably better transform them as well. And then we got this amazing opportunity from CBRE to do a large scale research project into what is the impact of the built environment on people. We said, well, yeah, that’s an amazing opportunity. That is so cool. We have to do that.
Milan
Isn’t that the project that Elizabeth wrote about in her book?
Nicholas
Yes. So, she ended up writing a book about it after it was done. But what they did is they built a living lab, they hung up all kinds of sensors, and they hung up different lighting and advanced lighting systems, circadian lighting systems.
And then they started changing all the things in the environment and doing cognitive tests on people to see what was the impact of those changes and the results were phenomenal.
It was clear, very clear, that the built environment has significant impact on our well-being, on our health, but also our ability to perform as humans. And so that was kind of the first aha moment, like there’s something here that we need to dive deeper into it.
And there were kind of two main learnings that came from that.
One, the research was clear, there’s an impact from the built environment on people.
Two, the way that we got there with smart technology is extremely complicated, political, challenging, very, very complex.
Milan
It’s not easy to get there, so many technology.
Nicholas
No. No. So we implemented this technology, which took a lot of time and a lot of resource, a lot of money to make it happen. And then when the research was done, that living lab also completely died because there was no one there to continue using that data, exactly what I just mentioned about humans and technology.
So that was really unfortunate, but also we got the results we were looking for in the research.
And then we had multiple opportunities after that, one with Booking.com where we did a research with them that kind of led to their new campus. We did one with GSK in the UK.
Milan
Glaxo Smith&Kline?
Nicholas
Yeah, Glaxo Smith&Kline, a large pharmaceutical company. And every time you saw the same thing happen, the research was amazing, the living lab kind of died afterwards. So we started to say, where is there a standard that we can just plug into and do this research more collectively, community with less waste before and after? And that’s really where the idea started, where it was born.
Milan
It’s fascinating story. In my perception, there’s something that we missed as well. For us, it was clear that we need to deploy some technology in buildings that we know they needed some, but there was so much different information and we just didn’t have a clue how to do it in a way that would bring the results that we were seeking for, that the people will use the building, that the building will be energy efficient, that you will feel good and all this together.
And what we liked on your model was that it put all these values into one structure and into the process of how it should work on a long-term basis. So that’s why it was interesting and that’s why we decided to actually apply for assessorship program and then also to dive more into the process itself because it’s evident that it always needs improvement itself. We need to improve the process because no building is the same and that’s for us the main benefit stemming from the cooperation and that’s why we think that it makes sense. But ,what were your experiences with opening this idea to the market? How did buildings react? How did solution providers react? What did you notice?
Nicholas
Yeah, I mean, it was fascinating, right? Because I don’t think the goal, the value, it was never to set out and create a certification. That became the product in a way because that’s how the market knows how to communicate, right? The real estate sector is traditional, it’s slow moving and it’s a natural beast. It knows what it knows.
And certifications is a world that real estate really understands. We were recently in the Verdantix report on smart building certifications. It was a pretty cool report and it was an honor to be in it. But they talked about over 170 building certifications globally for real estate and that’s just crazy. That’s a crazy number of certifications.
How do you kind of decipher which one is valuable and which one’s useful? And they all have different expertise behind them, they all have different research and they all have different reason. So there’s a lot of value in all of them. But what was interesting with certification was what the market knew and that’s something we could use to get into the market and talk to the market in a meaningful way.
And when we originally put our launch webinar together, we launched at the smart building show in Amsterdam in, I think it was January of 2020. And then we did a quick webinar right after that.
We had like 200 people show up, like first go. It was crazy. We were like, okay, there’s interest, there’s appetite. And then it’s okay, what is that? And how do we unpack it and actually pull value and help people transition or use this kind of mechanism to move their business forward, really… And with smart building, I think you just alluded to that. There’s a thousand different ways to get there. There’s extremely complicated ways to dive into it. And the value is also just immense. The value cases that come from it are infinite. There’s tons of them.
So, we started from a health and wellbeing and human performance perspective, but we soon unpacked sustainability. And now a few years later, the emphasis on ESG and EU taxonomy has gone through the roof. And then the whole market is wondering about ROI of smart and what is the value of smart and how do we actually pay for it? And does the owner of the building pay for it or the tenant pay for it? So all of these kinds of very complex discussions come out in this work that we’re doing now, which is just so exciting.
Milan
Another thing that I would like to highlight and ask you to a little bit more dive in is the nature of certification because traditional certifications
that we know, especially the most popular green building certifications like BREEAM, LEED, more and more popular WELL, these are very much about the batch. It’s very hard to get to them because the criteria are really strict, but it’s very often done in a way that it’s focused on one period of time that has start and end, you got a batch and then it’s very much open what will happen after.
And it’s more solved via in-use certifications because this you have to confirm after three years or, and there’s a process that you need to prove in the meantime, but it is not so continuous. The mistakes can happen from minute to minute. And this is not in the certification process.
And what I would like to highlight is the fact that smart building certification is not so much about the batch, but about the process that you have in which you can cover these continual activities. And you can analyze what does need more often and more frequent control, how much you can get from it, how much value you can build on it and what not. You can decipher a lot of questions that you
cannot in traditional certifications, but also it can help the traditional certifications because a lot of criteria are very similar, very the same. And if we put there the smart layer, it means that from the batch becomes a living thing. And you can really, really prove that these criteria, even if it was certified three, five, 10 years ago are checked on a daily, monthly, weekly, or whatever needed basis. So, this is what I would like to hear from you.
Nicholas
Yeah, it’s really interesting because when we, like I said, the smart building certification was born out of necessity, right? We said, where is there a standard that we can plug into and do these things easier with more efficiency? And we then looked into the market and we started doing some literature reviews and different searching for that standard. And this was 2018, 2019, there was nothing in the market.
The European Union was making a little bit of noise about the smart readiness indicator, but nothing had been published yet. So there was nothing to dive into and see what that was going to be. And we also were like, okay, European Union, it’s probably going to be slow and it’s not going to be quite as dynamic as what we’re looking to be a part of. And then my co-founder Elizabeth Nelson, she had had some experience with certifications in the past. She had supported a consultancy on well certification and even in BREEAM and LEED. And what we realized was that a lot of those certifications are exactly what you said. They’re a bit like a check mark exercise. You check the box, you get the stamp and you move on.
And we knew that smart in its infancy was going to have a certification as well because real estate love certifications and it was going to happen. And what we knew it couldn’t be was a check mark exercise where you list the technologies you have, here’s your checklist, here’s your stamp, next, move on. We knew it needed to be more than that. It needed to be about context. What are you trying to do with smart? What is the human component of smart?
Why are you actually putting in this technology and how are you building your organization and your process and your governance to actually pull value out of the things that you’re investing in? Because without that, it’s just technology. And technology without using it, it’s just a waste. What’s the point?
Why would you do it? So it needed to be more dynamic. And in doing so, what we did is we created together with a ton of really smart people and partners and universities and research and pulling all this information together of how to do it is a context-driven model
that, yes, it benchmarks on the total level and you can see how you do against other buildings, but it also benchmarks on sublevels. So you can drill down into the areas that you’re doing really well and you can celebrate those and you can make some nice noise in the market and you can tell your story about why you are so good in that space.
But it also allows you to drill down into areas of opportunity and things that you may have not thought of yet and things that you can push your building and your organization further to be thinking about. And that’s really the most exciting piece is that you’re continuously helping people to improve and to change and to encourage them to make a difference. The other innovation that I think is really exciting
that we announced at the beginning of this year, 2023, which we’re almost at 2024, it’s crazy, was that we moved away from recertification on every two years. What we saw from that model was that it is flawed in the sense that a building, first of all, why would the work that they just did with you to certify their building not be relevant two years from now? Because I think that that’s just crazy.
You just did a ton of really amazing, nice work. It should still be valid. So now what we do is we certify 2023. You are a platinum or a gold building 2023. And how the benchmark and how smart adapts and changes over time, we will all see together. But we launched recertification on demand, right? Because if we come back every two years and say, oh, you got to pay up. We got to go again. It’s like, well, two years goes quite quick. It feels like we just did this. And we’re really busy with other things right now. It’s not a good time. It’s too much.
But really, certification is only interesting in key moments for real estate, right? It’s either you’re trying to sell your property. You’re trying to lease it again or get new renters in. You’re trying to get some new financing for property or you’re trying to market it. An internal process, of course, is validating your work, benchmarking your work, making sure you’re doing the right things. So based on those aspects, we have launched recertification on demand, saying wherever you are in your process, you let us know when you need to get a facelift or re-engage with the collective.
Milan
Could you describe how does it work? What is the shortest possible time to go through certification process? And I can imagine that even if you do this on-demand certification, it’s second, third or fourth, it’s much easier then because you know what to expect from the process and the information are gathered or being gathered on a continual basis if you want to make. So, it can be much shorter process. How does it work?
Nicholas
Yeah, so the shortest amount of time is a month. It’s about four weeks. And the way it works is that we sit together with the stakeholders of a building and we do a kickoff session.
We exchange a ton of information back and forth about this project and the asset and what made their building the way it is and how they built their smart building.
Then we open up an online assessment that they fill in as a team. And they actually find this to be a really interesting process as a team. It’s an innovative process. We also believe that every step of certification should be useful in itself. It shouldn’t be that we’re giving you very, very complex documents and Excel files to fill in. You throw them over to us. They go into a black box and you never see them again. That’s not certification of the future. Certification of the future is open transparency where you can see exactly how you’re scoring and where you can add value to your asset. And not only add value to your certification, add value to your asset. That’s what we’re doing this for. That’s really where we need to be moving. And so it’s an online assessment that you fill in with your team. You take as long as you want for that. That’s actually the most time consuming aspect. Because if you have a centralized team that knows everything about the building, they can fill it in in a day. But if they need to source the information from the other parts of the organization, that’s the challenge. That’s the coordination aspect. So however long the building takes is how long they take. Then there’s a consistency check. It’s actually one of our proudest things. I think you were definitely a part of that. The consistency check checks your answers and it pulls out all the inconsistencies in your answers. So if you, for instance, say, hey, I have occupancy sensors. And then later in the assessment, when we ask you about coverage, you say 0%. Then there’s an inconsistency there. So, it pulls it out and it really checks your work for you, which is kind of cool.
Then it goes to our peer review model. And this is very, very unique in certifications in the sense that we come from academia. We were writing research papers. And whenever you go to publish a paper, it gets peer reviewed. And we thought, shouldn’t buildings be peer reviewed as well? So, we have an assessor community that reviews the documentation and reviews the story with us. And the certification is really built up of quantitative data and qualitative. Quantitative is black and white. You either have an occupancy sensor in your room or you don’t. But there’s a lot of qualitative data around a smart building that is…
Milan
They need to be explained.
Nicholas
Yeah. You know, your process, your governance, your integrative design, your connectivity infrastructure, your mission, your vision, your business cases, your ROI plan, all of those things. And these assessors look at that and say, hey, we just assessed a bunch of buildings. We have some ideas. You know, have you thought about this? Have you thought about that? And we also never thought that was going to be such a cool role for assessors. I don’t think we thought that that was something that was going to be so cool. And actually I should turn that question on you. Let’s do that in two seconds. I’ll finish the process. But then I want to hear from you, like, what’s the best part about being an assessor? You know?
Milan
It’s definitely the learning process because where else would you have a chance to read these fascinating things about the building setup or building challenge? And to be honest,
you work with some of the smartest buildings in the world. So, it’s a unique chance to learn about what challenges these buildings have. Where are the benefits? Where are the weak points?
And if you can find it and give your professional advice, because we, as assessors, are good, everyone, in something else. For instance, me, I am director of FM Institute. I’m expert on telco and legal stuff that is connected. We can say that I am expert on prop tech providers and someone else is expert on finance. Yeah. And to have a good composition of assessors on each building is actually really rewarding because you can get advice afterwards. Our advice is part of the report that the building gets. So, it’s learning either for them as for the assessors. It’s something like an exam that the assessor is going through.
It’s a survey for assessor full of information and then assessor just fills it in and he gives his own explanations, advices, and impressions from what he learns.
Nicholas
Yeah.
And the assessors are becoming incredible experts in the space because they’re seeing all these buildings so they know so much about them. And then once that assessor program ends or it’s finished then it goes to a report phase where we explain everything to the building back what we’ve observed in the scoring, the quantitative, qualitative scoring, and they have a chance at that point to say, oh, here’s low-hanging fruit, here’s long-term vision goals, here are things you should speak about and stories we can tell. And we have a content team and a research team that can help with supporting buildings to tell those stories. That’s really, really nice. And there’s also an audit at that phase. And that audit is we don’t believe that the audit should be too painful that you’re only throwing over documentation for us to again put in that black box and you never hear anything again. It should, actually, also be very useful in organizing your documentation around smart building. And you have it all in one place in the assessment with this report. It gives you a full view on your smart building infrastructure.
Milan
It should prove all functionalities and the coverage actually on the buildings that they are either there and how far.
Nicholas
Yeah. And then when we go to reassess in the future, we literally just open that assessment back up and it’s about adjusting the things that have changed. And that assessment might change as well because it’s a dynamic process we’re in.
The smartest building of this year will definitely not be the smartest building five years from now because everything is changing and smart is moving really, really quickly. So the benchmarks are also changing. So if you want to stay as an example, you can be a platinum 2023, you may not be a platinum 2027. You might need to reassess to say, you know, am I still a platinum and what have I learned and what do I need to change?
Milan
And maybe you will come to a conclusion that you want to be or that you don’t want to be platinum anymore, that it’s too far.
Nicholas
Yeah. Well, and what’s interesting is there’s a really interesting thing happening in the market right now where some of the platinum buildings, you know, they say, I think we went too far. There’s too much tech in this building and it’s, we’re not getting the ROI or the value out of that tech. So , there’s this rationalization happening in tech of what is the right level of technology to be putting in buildings. And we’re definitely a part of that process right now and that story and that research. And what we need to do as an industry is keep our finger on the pulse of what is actually adding value and driving value in real estate. And the certification should reflect that. So, how cool would it be if the platinum certification over time is actually less and less technology? I think that would be a very interesting, you know, evolution.
Milan
Definitely. I would just like to switch to, I know that smart building certification is certifying some of the smartest buildings that are out there on the market, but European Union has some nice initiatives, like you already mentioned, smart readiness indicator. And the ambition of the idea is to offer some model of evaluating smartness in the building that can be used for every building in European Union. The model is quite robust, but it’s application not. We already went through it. What are your plans? Do you also plan to offer some kind of help to organizations with these schemes? There’s a lot of noise about ESG, EU taxonomy, a lot of big real estate portfolios. They go through GRESB reporting. More and more real estate is touched by this and this wave will be stronger and stronger each year. How would like you to help this sphere?
Nicholas
I’m so excited for 2024 and 2025, 2026. You know, I think this is a long game we’re playing here. Real estate is long. Everybody, this whole industry is slow moving, so we have a ton of work to do to move it, right? So, one of the things that’s really interesting that happened at the end of last year is that with the smart building certification, we launched that in 2020.
And one of our hypotheses was that no two buildings are the same. And we actually proved that. We did, you know, after 20 certifications of buildings, we saw that no two buildings were the same in how they built their smart building, their technical infrastructure, these types of things.
So we actually changed our name last year to Smart Building Collective to double down on that concept of we need to do this together. We need to be a community working on these these issues together. And the certification itself should be crowdsourced. It should be a product of buildings and solutions and consultancy firms and MSIs and research institutions and universities. And it needs to be feeding the framework and how we evolve. So the best buildings and the best solutions that we find are helping to influence the world to be better, to move the real estate industry forward.
And actually all these incredible initiatives that are happening around the globe, looking at other certifications or standards or law or taxation, those are all part of that feeding network. It’s part of that collective ecosystem.
And smart, if you look at smart technology, it’s a tool. It’s literally a tool to achieve the results that we’re actually after, right?
So, if you look at like a WELL certification, the technology can help you to prove what makes your property healthier and more prone for human performance, you know.
It helps you to prove the value for those certifications, for BREEAM and LEED. The sustainability aspect is the same way. The technology helps you to prove your energy consumption and your water consumption and the things that help you to achieve a BREEAM or a LEED certification. SRIs, the smart readiness indicator, EU taxonomy, they all have that same principle of results and values that you’re trying to do. So we’ve created alignment on all of those different fronts. And it’s about how do we support people achieve their goals and learn about those very complicated, challenging things. Like EU taxonomy
is not an easy subject and it’s a journey we’re all on together. So yeah, the team is prone and ready to support you understand those different aspects, but also to see how the smart building certification can help and how technology can help you achieve those things.
And then more interesting than that is the collective. You know, the smart building collective is made up of a ton of really smart developers who have done it already and are learning together.
Having them meet each other and learn from each other is so important. And the collective is also made up of 50, 60 different partners that are solution providers, consultancy firms, MSIs, which is master system integrators. And they are all at your disposal to just work with and learn from. And let’s put questions to them and put them on panels and learn from them in meaningful ways.
Milan
Actually, I noticed that year after year or year and a half, you realize that some technologies help smart buildings more than others. Some integrate other services. So the correlation with the smart building was really high and you realize that you can use the same survey or very the same survey for solution providers so that they can match.
Nicholas
100%. Yeah. And now for consultancy firms. So we’ve launched, I think it was at the end of 2022, we launched the solution certification. And I think we certified over 35, 40 different solutions, which are all powerful tools. It’s a huge pool of knowledge in smart building.
All of these people are, the one thing that I think Elizabeth and I are most proud of is that the people that are attracted to the smart building collective are wonderful. They’re open, they’re caring, they’re supportive. They’re trying to help each other. They’re trying to help their clients. They’re a really wonderful group of people. So tapping into that is just, it’s a pleasure, right? It’s learning from each other is just so cool in that way.
Milan
Thank you. Thank you, Nicolas. Maybe one last question. Where are you from? Because your accent is really American, but you are from Holland. So what’s your…
Nicholas
Yeah. So I’m originally from New Mexico of all places in the United States. And I went to school there. I did all my studies in the US. My mother’s Dutch and she was an immigrant to the US. And it’s interesting when you have a parent who’s an immigrant, because I think most people, what you’ll see is that they magnet back to where their parent came from to see what it was all about. And so I got stuck in the Netherlands 17 years ago. And that was really fascinating because I couldn’t have planned it. Your life unfolds the way it unfolds. But when I was working in the corporate sector, the Dutch working culture is fascinating. It’s a society that has all the social netting for everything you could possibly imagine. The healthcare is affordable, the childcare is affordable. It’s very much a social country.
So, people have a lot of privilege there in being able to live, especially if you compare it to how we have lived in the US. The discrepancies are massive in the US. You have very rich people who have everything and you have people who don’t have anything. And that split is massive, which we didn’t see, I didn’t see in the Netherlands. But then burnout was still going up and it’s like, why? So like studying work in Holland and how it works or the Netherlands, that was fascinating. And then it never went back, not yet at least.
Milan
So your original mission was to fight burnout, right? Am I right?
Nicholas
I think the original mission is to help people and to help people achieve the things that they want to achieve in life whilst being good for the environment. I think that’s important that we start taking care of the earth, that we start being better to the environment, that we believe that we have impact on the environment and that we try and mitigate that and try and make that better. And real estate was interesting because it was an asset class or a subject area that has the largest impact on the environment. It accounts for 40% of global emissions comes from the built environment. So, if we can move that needle the smallest way possible, we have a huge impact on what’s going on in the world. And so, it was the work that we’re doing, brings this passion of helping people to achieve the best thing that they can possibly achieve in their lives whilst helping the environment and then doing in a crazy interesting subject area. Smart buildings is fascinating technology, real estate, innovation.
Innovation, startups, scale-ups, corporates, people. It’s awesome.
Milan
Very nicely said. Thank you, Nicholas. In half an hour, you will have a visit of the first certified building here in Slovakia. So I hope that you will enjoy it. I have to thank you for this discussion. It was fascinating for me again. And I hope that our cooperation with you will last
for much longer than what we had a chance to go through together. So thank you very much.
Nicholas
Thank you very much. It was a pleasure to be here. And yeah, I look forward to everything we’re going to achieve in the future.
Milan
Thank you.
