How to navigate ESG and challenges in current development

Grinity has been operating on the market for almost three years, but with its extensive expertise – previously under the Arcadis and EC Harris brands – it is recognized as an established player in the industry. What are the current trends and challenges in the development sector, and how does Grinity assist clients in meeting the demanding requirements of the modern era?

We explored these topics with Lenka Matějíčková, Sector Leader Sustainability, who oversees a team of more than 40 sustainability experts, and Jakub Pavelka, Sector Leader Commercial Developers, who leads the Project Management and Energy Building Optimization teams.

What changes have you observed on the market over the past few years?

JP: A pivotal moment occurred due to the combination of several factors – COVID-19, the war in Ukraine, the energy crisis, inflation, and ESG requirements. These events drove up the cost of construction and development projects financing, as well as the costs of building materials and labor. This made companies rethink efficiency and investment returns. In addition, the EU’s pressure to reduce carbon footprints and implement non-financial reporting introduced new opportunities as well as obligations. All these factors significantly accelerated the demand for our services. 

LM: I can confirm this, particularly in relation to my team and sustainability itself, where we are witnessing massive growth. There is a noticeable shift away from traditional certifications such as LEED, BREEAM, and more recently WELL, towards ESG, including the mandatory non-financial reporting in line with the EU Taxonomy. Additionally, the demand for Energy Building Optimization has increased significantly.

So, how do you react to this situation?

LM: ESG has become an integral part of our services. Clients increasingly come to us with questions like, ‘What does the EU actually require from us? How should we implement it? And what does it practically mean for us?’ This legislation introduces new challenges but also creates opportunities for many of our activities and solutions.

JP: From the client’s perspective, these measures are not often met with enthusiasm, but for us, they represent an opportunity. We know how to guide them and help them navigate this period with minimal disruption. Our team designs solutions that not only comply with legislative requirements but also deliver tangible operational savings for their buildings.

Can we therefore say that EU regulations are beneficial in this case?

LM: The European Union is returning to fundamental values that once existed but have gradually faded. This approach creates a stable foundation for our services. A key aspect is ensuring a return on investment, which provides banks with confidence that tenants will remain long-term and won’t be forced to leave properties due to rising operating costs. Additionally, international companies with parent organizations in other countries are increasingly focused on minimizing energy expenses. We are able to provide clients with detailed calculations on how much they can save on operational costs in the long term by investing more in higher-quality construction. We don’t limit ourselves to simple recommendations, such as installing photovoltaic systems – we analyze buildings comprehensively to propose the most efficient and realistic solutions. And we’ve been doing this for over 10 years.

JP: Building owners are currently under pressure from multiple directions. They must consider not only their own ESG reporting but also the demands of their tenants, who seek energy-efficient buildings to meet their ESG commitments. Moreover, the terms set by banks for refinancing properties play a crucial role, as they also prioritize energy efficiency.

What does the client service package include?

JP: There are several stages in which we can implement our services. One involves buildings in the development phase – either still conceptualized on paper or just starting to take shape. Based on our understanding of the client’s requirements, relevant legislation, and reporting standards, we can define the parameters of the building to ensure it is as energy-efficient as possible while meeting the current ESG requirements for buildings.

And how do you approach existing buildings? Is it possible to meet the required standards with them?

JP: Most existing buildings are part of portfolios, and clients are interested in upgrading them to be more energy-efficient and reduce their carbon footprint. We provide energy optimization, where we assess the building’s technical condition, focus on operational savings, and prepare investment measures for further improvements. We are often surprised by how much energy can be saved simply by optimizing operational parameters.

LM: Older buildings sometimes have more significant potential than one might expect. Even a building constructed just a few years ago can perform worse than an older one if its technical systems are insufficient. Unfortunately, fewer people are entering technical fields, which impacts the quality of implementations but simultaneously provides us with numerous opportunities for improvement.

JP: Another critical factor is a building’s ability to adapt to future requirements and climate challenges. The EU Taxonomy, for example, provides forecasts of changes, and we aim to prepare buildings for the next 10, 15, or even 20 years. This is not about overengineering but about creating flexibility – such as adaptable spatial layouts for future technologies or larger infrastructure systems that enable easier modernization. These measures are cost-effective yet strategically significant.

So it’s not just about the building.

LM: Exactly, it’s also about the surrounding environment. If I construct a new office building in a specific location, I should also consider how to compensate the local community. Governance plays a key role – it’s not enough to have admirable goals, such as being carbon-neutral by 2030, if concrete numbers, plans, and control mechanisms do not support them. These activities must be integrated into the company’s policy to have a real impact. This philosophy is closely tied to our work in ESG Due Diligence (ESG DD). Our team addresses not only parameters related to water or air pollution and facility operations but also Project Management that builds on governance principles. ESG now employs our entire company – while previously, a single project might involve three or four people, today it could include up to 15, ranging from biodiversity and energy experts to specialists in local pollution or Project Management. ESG is fundamentally a multidisciplinary matter requiring a coordinated approach.

Back to the situation on our market. There are not many new buildings being constructed, and instead, many economically unsuitable ones remain. What solutions do you recommend from this perspective?

JP: Currently, the market has a significant number of buildings that are ‘old’ only in a relative sense – 20 years is not a critical age for a building. However, this is often the point where the original technologies reach the end of their lifecycle. This requires significant interventions and modernization. Based on the current needs of our clients, we can prepare concepts that not only address existing issues but also consider future operational and sustainability requirements for these buildings. This approach helps ensure their long-term competitiveness.

You have completed many successful projects. Would you like to highlight any where the collaboration with the client was particularly successful?

JP: I’d like to highlight our collaboration with Mint Investments on the energy optimization of their portfolio, where we achieved significant operational energy savings. Another example is our synergy with the Fidurock portfolio, focusing on retail parks and residential buildings, where we also contributed to more efficient and sustainable operations.

LM: I would add our partnership with Česká spořitelna on their newly constructed headquarters spanning 100,000 sq m in Prague’s Smíchov district. Beyond operational carbon footprint reduction, we also focused on the embodied carbon footprint, assessing the environmental impact of the materials used. This approach was one of the first of its kind on the Czech market. Given the scale of the project, Česká spořitelna’s requirements for low-carbon materials can significantly influence the market and contribute to a transformation in supplier practices across the Czech Republic.

We face key milestones such as 2025, 2030, and 2050. How should clients prepare for these deadlines? What legislative requirements lie ahead?

LM: These years mark significant shifts, primarily due to the obligation to comply with non-financial reporting and ESG requirements. Companies will need to start systematically collecting data, analyzing it, and implementing concrete measures. The focus will be on energy savings, reducing energy consumption, and gradually achieving net-zero operational carbon emissions.

JP: Based on legislative requirements and our experience, we recommend our clients prioritize the efficient operation of their buildings, whether new or existing. Conducting an audit or operational optimization is crucial. This includes implementing measures with minimal investment costs that have a significant impact on reducing energy consumption. These measures can be implemented almost immediately if approached correctly and represent the quickest step toward preparing for future requirements.

Eventually, it’s all about people…

LM: Absolutely. Any measures should reflect the fact that employees and tenants are the most valuable assets in a building. People’s expectations are rising, and retaining them is becoming increasingly challenging, which makes it essential to prioritize their satisfaction. Optimizing a building must go hand in hand with creating a high-quality indoor environment. It’s inefficient to blindly replace all systems or implement measures solely to achieve carbon neutrality if they don’t serve a real purpose. It’s important to use common sense and remember that a building exists primarily for the people inside – this applies to 2030 and beyond. While operational carbon neutrality will be required, no one can predict with certainty what technologies will be available in the future. Therefore, it’s crucial to maintain a flexible approach, consider multiple options, and avoid a one-sided perspective. The key is openness and the willingness to adapt to whatever the future brings.

Arnošt Wagner

Photo: Archiv Grinity