Decarbonization and the Built Environment

00:00:06:19 - 00:00:31:11
Sara Gutterman: All right. Hello and welcome to today's webinar, which is decarbonization and the Built Environment. It's a pleasure to have you all here. For those of you who attend Green Builder Media's webinars on a regular basis, you'll know that our voice of God, Mike Collignon, our moderator for our webinars, is not here like he usually is. He's on summer vacation with his family.

00:00:31:11 - 00:00:57:00
Sara Gutterman: So you get me. I'm Sarah Gutman, I'm the CEO of Green Builder Media. I have the good fortune to be able to do a fair number of our webinars and engage with you all and others in our audience pretty regularly. I am really excited today because I get to talk about one of my favorite topics, which is decarbonization and particularly decarbonization solutions for the built environment.

00:00:57:00 - 00:01:33:02
Sara Gutterman: And I get to present this webinar in conjunction with a handful of our best partners, who are all really working towards decarbonization in their own ways. So cultured Stone, Rheem, LG Niagara, and NB energy. And I'm going to talk about each of them throughout the course of the webinar and solutions that they are providing to the marketplace, and innovative approaches they have implemented to decarbonize their businesses and their products and their offerings.

00:01:33:04 - 00:02:00:04
Sara Gutterman: So listen for those. And again, thanks to to all of them for being our partners and helping us expand our reach and really just continue to do the work that we do. For any of you who have heard me talk about the topic of decarbonization in the past, which I like to do a lot. So hopefully you've heard at least one of our webinars on our presentations on decarbonization.

00:02:00:08 - 00:02:23:10
Sara Gutterman: Decarbonization in the past. There's a lot of new information. In today's webinar, you'll see a few slides that you might recognize and a little bit of carryover information, because there's just baseline fundamental information that we have to talk about every time we talk about decarbonization. And part of that is just the way that I like to introduce the topic of decarbonization.

00:02:23:10 - 00:03:02:24
Sara Gutterman: What is it? Why is it important? Why do we host so many presentation and webinars about it? And that's, you know, it's really where we need to go as an economy, as a society. And decarbonization is nothing less than the full scale elimination of carbon emissions. The transition to the decarbonization economy will effectively require a complete overhaul of our socio economic system, and we won't be able to shoehorn sustainability into old systems, meaning that we have this really rare and thrilling opportunity to redesign our economy at scale and scope, which equals the transformation that was brought about by the Industrial Revolution.

00:03:02:24 - 00:03:38:11
Sara Gutterman: And we know that this transformation is scary for some people, some companies, some industry, namely those who are clinging to antiquated business models and obsolete energy sources and outdated technologies. And we have already seen and will continue to see that they will fashion every kind of attack and every kind of obstacle that's possible to impede progress. But really, at the end of the day, decarbonization is inevitable and our world is already evolving into a cleaner and greener and better version of itself.

00:03:38:11 - 00:04:19:25
Sara Gutterman: And the good news is that we all reap the benefits of that. Fortunately, the opportunity for decarbonization is really market driven, and there's a couple layers there in terms of what I mean by market driven, first and foremost, there is a huge economic opportunity with decarbonization. And so we're really seeing financial markets, investors, funds, banks, even, you know, manufacturers respond to this need for enhanced sustainability and enhanced.

00:04:19:28 - 00:04:44:21
Sara Gutterman: ESG. We'll talk about that in a little bit. But then on the consumer side as well, we're really seeing a shift in consumer demand and a pull market pull for decarbonization that's being driven by millennials. Anybody who has ever heard me talk in the last couple of years knows that my second favorite topic is behind decarbonization is millennials.

00:04:44:22 - 00:05:16:28
Sara Gutterman: And so I'll talk a little bit more about their values, their mission, their vision for a decarbonized future and why that's how that's impacting the market. Now let's go into why decarbonization? And honestly, because you're here, I'm going to assume that you understand the urgent need for climate action and for decarbonization. We know from every single scientific report that's been done for the past decade that climate change is here.

00:05:16:28 - 00:06:08:27
Sara Gutterman: It is irreversibly changing the world around us. I think this summer, you know, we're seeing extreme extreme temperatures, flooding, superstorm, wildfires. And, you know, the bad news is that that's not going away in the near future. The good news is that if we look at some of the new clients, climate science, and actually the climate scientist Michael Mann did a presentation last year at Green Builder Media's annual sustainability symposium, and he said, this new climate science shows that there isn't as much of a long tail when it comes to climate change as climate scientists originally thought, which means that what we do today is certainly going to impact the planet and the atmosphere into the

00:06:08:27 - 00:06:32:07
Sara Gutterman: future. But the more we reduce emissions right now, the sooner the planet can recover. And if we take one step towards the planet, it will take three steps, three steps towards us with respect to healing itself and ecosystems returning to normal or evolving into perhaps something a little different. So, you know, the bad news is that it's here.

00:06:32:07 - 00:07:01:13
Sara Gutterman: It's real, it's impacting every ecosystem and every inhabitant of the Earth. But again, the good news is that we can stop it. We can reverse this. And so I'm going to leave you with that bit of kind of hopeful climate science for the day. Now, if we go to the next slide and we there's something that I want to point out that I really haven't tied into conversations about climate change and decarbonization.

00:07:01:13 - 00:07:33:00
Sara Gutterman: And that is we oftentimes talk about climate change and decarbonization as if it were kind of external, right? It's happening in the world around us. But more and more, we're actually seeing that climate change is very personal, right? So it impacts our homes, our communities, our comfort. Eventually it will impact or perhaps for those unfortunate individuals who have experienced super storms, wildfires, even extreme temperatures this summer.

00:07:33:05 - 00:07:58:25
Sara Gutterman: There is a personal safety and security element to climate change. It is already impacting our food supply, our water supply, our energy supply, as we've seen, you know, utility grids go down in, you know, when these extreme events occur, it is impacting our health care, right? It is impacting the air we breathe. And, you know, the water we drink.

00:07:58:27 - 00:08:24:22
Sara Gutterman: It's clearly impacting finances and our professional lives and our community lives. And you know what's interesting here is that, you know, we will all be impacted or are impacted already by climate change, but climate change will have different impacts on different age groups. Obviously, younger folks are going to have to live with climate change for longer than those of us who are older.

00:08:24:24 - 00:08:58:20
Sara Gutterman: Certainly frontline communities, many of which are minority communities, are facing larger impacts, more substantial impacts with respect to climate change. So I don't think we can any longer really look at decarbonization, climate change, all these topics as something that's external happening out there in the world. We really have to internalize it and think about how it impacts us, our families, our neighbors, our communities, and perhaps even start making climate change plans if we go to the next slide.

00:08:58:23 - 00:09:21:10
Sara Gutterman: So decarbonization, what is it again? If you've heard me talk about decarbonization, you probably recognize this slide. Again, I just feel like I need to give some context because you're here, I'm going to assume you get what it is. But again as I mentioned earlier, it really is a full scale elimination of carbon emissions, greenhouse gas in general.

00:09:21:13 - 00:09:59:06
Sara Gutterman: So that's not just carbon, but methane and other toxins in the air. And that partly we get there partly through sequestration. And some of that is a natural process sequestering carbon and forests and oceans and other, you know, types of carbon, natural carbon sinks. But there's an emerging sector of innovation called carbon tech and just climate tech in general, which I'll talk a little bit more about in a minute, that's actually pulling carbon out of the air and putting it into building materials like concrete and other uses.

00:09:59:07 - 00:10:23:01
Sara Gutterman: Vodka. We're not. We're starting to see companies sequester carbon into products like vodka and other consumer products. And so there's a lot of innovation around sequestration, another aspect of decarbonization that's really important for us to get a better understanding of is the emissions cycle. So there's different use stages of carbon. Part of that has to do with embodied carbon.

00:10:23:01 - 00:10:57:05
Sara Gutterman: And that's kind of the full cycle of how carbon is emitted and kind of treated in, say, the production of materials or in industrial or agricultural processes. So if you think about a building material, you know, when you think about raw material extraction, transportation of those raw materials, manufacturing, more transportation, the construction process itself, and then, you know, the use of that material and then the end use, right, the complete life cycle.

00:10:57:05 - 00:11:20:05
Sara Gutterman: That's the embodied carbon. It's really looking at that whole cycle. And then operational carbon is for example in the built environment. It's really, you know, let's say how much carbon does a building or a home use during its operation. So that has to do with things like energy efficiency to get to decarbonization. We kind of know what the roadmap looks like.

00:11:20:09 - 00:11:58:25
Sara Gutterman: Certainly it involves the rapid and immediate continued transformation to renewable energy, the electrification of everything, the rethinking of industrial and manufacturing practices, which is already underway with the big ESG push or environmental, social and governance push that we're seeing at the corporate level mandated by investors and then pulled through now by proposed climate risk disclosure requirements from the SEC and then some other, the Esrb and some other international entities that are creating baseline standards for ESG.

00:11:58:27 - 00:12:12:17
Sara Gutterman: We also need to see a shift in agricultural practices to more regenerative practices, and then the adoption of new land use practices, partly to.

00:12:12:20 - 00:12:42:09
Sara Gutterman: You know, to foster the growth of forests for sequestration as well as wetlands. And then in the built environment, look at things like density and mixed use and other changes, which I'll talk about a little bit more. But I think the most important part to getting to decarbonization is pricing carbon, putting a price on carbon so that it shifts carbon from a waste product to a valuable input.

00:12:42:09 - 00:13:12:29
Sara Gutterman: And that is happening now with carbon tech and sequestration technologies. But this new valuation metric provides a much needed economic incentive to capture carbon particles rather than to release them into the atmosphere, motivating utilities and manufacturers to develop innovative ways to profit from converting carbon from a waste product into a useful material. So assigning a value to CO2 really transforms conventional thinking again.

00:13:13:00 - 00:13:40:06
Sara Gutterman: So instead of being a harmful planet heating gas, it now becomes this valuable resource that plays a vital role in the development of a circular economy. Now, if we go to the next slide, we're kind of in this climate conundrum where we need desperate and urgent action. But so far, climate response has been fairly anemic. Now we have seen this proposed inflation reduction bill.

00:13:40:06 - 00:14:16:10
Sara Gutterman: I'll talk about that in a minute. That would give kind of a huge boost to climate action and all the things we're talking about today here in the US. But you know, the fact is wildfires, floods, extreme weather, event events, these things are getting more intense and frequent and a surprisingly lack of a surprising lack of urgency. Now, the impact of federal funding, both through the Infrastructure Investment and Jobs Act, as well as potentially this new Inflation Reduction Act verdict, is still out again.

00:14:16:11 - 00:14:42:02
Sara Gutterman: It's likely that there will be a lot of investment through both of those acts and bills in renewables, in tax credits for energy efficiency, etc.. And again, I'll talk more about the the Inflation Reduction Act in just a minute. But but the verdict is still out because those funds have not been allocated. So you know we're waiting to see what the true impact is.

00:14:42:04 - 00:15:36:09
Sara Gutterman: With that said, we are absolutely seeing a marked shift in the way that corporations, investors and capital markets tackle the climate crisis. Businesses are increasing their not just their ESG and corporate sustainability initiatives, but also their focus on adaptation, resilience and full scale decarbonization, social equity and environmental governance policies. And so, you know, I think that moving forward, what we what we're really going to have to measure and pay attention to, and frankly, all of us need to hold manufacturers and our elected officials feet to the fire with respect to how much we can shift from talking about decarbonization and sustainability to actually implementing novel solutions at scale and, you know, really transforming our economy.

00:15:36:09 - 00:16:22:18
Sara Gutterman: So I think that in the housing sector, we are also seeing some shifts and changes with respect to resilience and adaptation in ratcheted codes that are requiring more fortified homes and communities with things like proper roofing, durable materials, storm proof windows, etc.. Now next slide please. So we're seeing a lot of technology advancements that are enabling decarbonization. And I wanted to just mention some of these because it's pretty interesting to see that as technology advances, we have more vehicles and tools to monitor and measure and streamline the process of decarbonization.

00:16:22:18 - 00:16:49:11
Sara Gutterman: So first is just data and analytics. We all know that, you know, we can we can change what we can monitor, right. So if we know how our home performs with respect to energy and water and air quality, when a homeowner knows those metrics, they make behavioral changes accordingly. Same thing here with respect to manufacturers and industry and agricultural firms.

00:16:49:11 - 00:17:20:23
Sara Gutterman: They're making changes based on data. Certainly, cloud platforms are enabling us to connect and run operations at scale. The Internet of Things is connecting everything so that we can manage everything remotely. Of course, that intelligent automation, which uses historical data to then do predictive analysis and optimize processes and systems moving forward based on that historical data mobility solutions, which allows us to remotely operate anything.

00:17:20:23 - 00:17:50:29
Sara Gutterman: I think 5G is helping to not just with the connectivity but with the speed piece as well. We're seeing robotics particularly like in commercial construction, replace some of the more dangerous and monotonous human scale jobs, but also enhance safety and productivity. And then, of course, cyber security, which is adding a layer of of needed security to, you know, all of this kind activity.

00:17:51:01 - 00:18:37:08
Sara Gutterman: Next slide in terms of other decarbonization drivers and really what's happening because of decarbonization, this shift towards decarbonization is we're seeing the electrification of everything through the adoption of renewable energy and EVs and other advanced technologies in the built environment, which we'll talk more about in a minute. And then we're seeing our entire built environment basically becoming virtual power plants, where, you know, we can optimize the harvesting, monitoring, storage and sharing of energy through these virtual power plants and many microgrids before, even sometimes they hit the main grid, which not only can help increase efficiency, but can also increase resilience.

00:18:37:10 - 00:19:15:07
Sara Gutterman: Next slide. So we've we've seen a tremendous increase in climate tech investments. And Mary if you could switch to the next slide please. That would be great. Thank you. So a paradigm shift is taking place where in private capital now perceives climate technology as a promising investment opportunity. 2021 was really a breakthrough year. And between 2020 and 2021, we saw the growth trajectory for climate tech investments just increase at an exponential rate.

00:19:15:07 - 00:19:50:27
Sara Gutterman: There was about $130 trillion that was pledged by fund managers, banks, pensions and other asset owners to finance the transition to decarbonization. There's still a long road ahead. You can see here that there's kind of six main sectors that require trillions and trillions of dollars of investment to get to decarbonization. But, you know, the good news is that, again, here, there is a huge financial opportunity where just sustainable buildings represented $24.7 trillion investment, you know, in emerging markets by 2030.

00:19:50:27 - 00:20:21:02
Sara Gutterman: So I think if we really shift the discussion about decarbonization from something that's scary and related to climate change to something that has this tremendous financial opportunity, we will do ourselves a service. And, you know, it really will behoove and facilitate the conversation because all of a sudden, we can sit in the nexus between profitability and decarbonization. There shouldn't be a separation between those two things.

00:20:21:04 - 00:20:44:04
Sara Gutterman: You know, we used to talk about a triple bottom line, people plan a profit. But the real truth is these things are all combined and the incentives have to be combined. But interestingly, about 35% of the technology that is needed to reach our climate goals has yet to be invented, which again, really shows the tremendous financial opportunity ahead of us.

00:20:44:05 - 00:21:11:04
Sara Gutterman: Now, I've been thinking a lot about hydrogen because, you know, there was you know, hydrogen is kind of seen some, you know, fits and starts with respect to its trajectory and its growth. But there are market forces at play that are really shifting the energy sector away from fossil fuels. And I think seeing the writing on the wall, a lot of the companies are making bets on clean hydrogen.

00:21:11:05 - 00:21:35:28
Sara Gutterman: Now, hydrogen is a good fit for the fossil fuel companies. So first of all, it's a feasible source of power for high intensity industries like concrete and steel that use massive amounts of energy during the production process. But I think more importantly, unlike solar and wind power, which generate electrons, hydrogen is a molecule. And the oil companies understand molecules, right?

00:21:35:29 - 00:22:07:20
Sara Gutterman: They understand how to build processing plants and storage facilities and pressurize pipelines that can move and transport molecules around the world, for industry and for agriculture, and even for commercial transportation. So I actually think that that clean hydrogen offers a lifeline to the big oil companies. Now, most of the hydrogen produced today is called gray hydrogen, and it's derived from natural gas using an energy intensive process that emits a large amount of carbon dioxide.

00:22:07:21 - 00:22:31:08
Sara Gutterman: So it's really not a sustainable option. Now the next step in kind of the hydrogen evolution is called blue hydrogen. So it's touted as a clean alternative, but it still uses natural gas mixed with steam and catalysts. But the carbon emissions are captured and stored. But even so, the total emissions from blue hydrogen are about 12% less than gray hydrogen.

00:22:31:08 - 00:23:15:28
Sara Gutterman: So really we're looking for green hydrogen, which is the result of splitting water into hydrogen and oxygen using renewable energy. And that represents the big time Moneyball for the fossil fuel companies, so much so that companies like BP and Total and Shell are investing billions of dollars into green hydrogen. So as one example, BP is leading a $36 billion investment in Asia Renewable Energy Hub, which is installing a 26 gigawatt solar and wind farm in Western Australia dedicated to generating electricity, specifically to produce about 1.6 million tons of green hydrogen annually.

00:23:16:00 - 00:23:41:01
Sara Gutterman: So I think, you know, there's a lot of investment here. It's, you know, it's still a long game. There's still a lot of investment and research and development that needs to take place. But I do think we should keep our eye on hydrogen as a pretty essential decarbonization solution. Now moving on. I've mentioned carbon tech. There's a couple of different elements to carbon tech.

00:23:41:01 - 00:24:07:11
Sara Gutterman: And you can see here, you know, we really need to trap about 5.6 billion tonnes of carbon by 2020 2030. Excuse me. To prevent what climate scientists say would be catastrophic climate change. So part of the way to get there is called direct air capture. And this is basically sucking the carbon out of the air. And then, you know, sending it through a liquid or solid filter to remove CO2.

00:24:07:14 - 00:24:41:08
Sara Gutterman: Another way to do this is a source capture, which is basically capturing carbon during the manufacturing process, or an industrial facilities from the flu gas before it is released in the air, and then that CO2 is isolated and stored. Carbon utilization. This is really where the carbon tech investments are, you know, really interesting to me and advancing with respect to pulling carbon out of the air and infusing it into the products around us.

00:24:41:10 - 00:25:13:28
Sara Gutterman: So I think a lot of folks, we talk about carbon cure a lot, which is infusing carbon into a cement mix to make a more structurally sound, concrete product that then actually can act as a better carbon sink. So it becomes a self-fulfilling cycle. And there is a lot of, you know, innovation happening in those areas. And this is really where, you know, assigning that new valuation metric or assigning that carbon pricing comes into play because it opens up new economic.

00:25:14:01 - 00:25:50:03
Sara Gutterman: Sectors and facilities that create new financial opportunities. Next slide please. Now circularity plays a major role in decarbonization as well. And really when it comes to product specification for the built environment, this is where we all need to be thinking. And I mentioned this a little early with respect to embodied carbon. But when we look at that full life cycle, raw materials design, manufacturing, transportation, distribution, usage, you know, all of that's really important.

00:25:50:03 - 00:26:21:23
Sara Gutterman: But then how do we what do we do with the products at their end of their useful life? And I think that the circular economy offers some solutions. So instead of our take and waste model that we deploy now, the circular economy really optimizes sharing, leasing, reusing, repairing, refurbishing, recycling. You know, Ricoh is a great example of a company that's been doing this literally for, you know, probably 15 years where they've been designing circularity into their solutions.

00:26:21:23 - 00:26:43:11
Sara Gutterman: They make office printers and zero not Xerox machines, but copy machines, you know, things that maybe a little like, I don't even remember the last time I used a copy machine, but they they make a lot of different kinds of equipment, and they design with circularity in mind so that they can take back their products and reuse them in new products.

00:26:43:17 - 00:27:08:07
Sara Gutterman: I've heard some of the appliance companies are starting to design with take back programs in mind and reuse. And so I think that this is another tremendous opportunity, both from the design and manufacturing side of things, but also in terms of just generating less waste, you know, returning things back into, you know, the bio or the techno cycle.

00:27:08:08 - 00:27:40:22
Sara Gutterman: Right? So either into a natural composting environment or back into kind of the recycling technological recycling environment, but unfortunately only about, you know, 8.6% of the economy is currently circular. So again, long road to hoe there. Next slide please. Okay. So I mentioned the Inflation Reduction Act. So you know after months of negotiations and false starts, Senate Democrats you know have we think come to an agreement.

00:27:40:22 - 00:28:20:12
Sara Gutterman: And there's still you know cinema who's a holdout. We're not sure where she's going to fall on this. But you know if this bill passes it would invest about $369 billion in American energy security in fighting climate change. So it would be the single largest infusion of federal cash aimed at tackling climate crisis in US history. And you know, it's interesting because, you know, it's certainly smaller than the $2 trillion plan that the Biden administration originally envisioned, but it's bigger than what a lot of folks thought was going to get passed.

00:28:20:18 - 00:28:48:22
Sara Gutterman: As you know, last month, Joe Manchin obviously was, you know, kind of a pivotal voice and vote in this. And let's be honest, he got his pipeline. He got, you know, some things that he was looking for, which is interesting because this inflation reduction act really splits between two priorities that are often in tension with one another. So boosting energy production and reducing greenhouse gas emissions.

00:28:48:24 - 00:29:10:03
Sara Gutterman: And you, you know, could say that those two things are in conflict. But I think that, you know, there's kind of the near-term expansion of fossil fuel extraction to meet or near-term energy needs, but then a long term payout with respect to a longer term transition to renewables. I won't go through all the details. There's a lot to it.

00:29:10:03 - 00:29:45:07
Sara Gutterman: You guys can read that online. But I think some of the interesting elements, you know, $7,500 rebates for new EVs and 4000 for used EVs and rebates $14,000, you know, you know, to for homeowners to install electric heating and cooling systems, water heaters, induction cooktops and other efficiency improvements. I think there's workforce training, which is a really important piece because we are seeing that as we shift to decarbonization in the built environment.

00:29:45:08 - 00:30:19:29
Sara Gutterman: A big roadblock is labor. There's just not enough trained labor. So that workforce training is really important. There's investment. And, you know, every kind of clean energy auction, wind, solar, battery storage, geothermal tax credits for wind and solar would be extended. There's clean jobs programs. And then there's also some incentives for carbon capture, which those are a little bit controversial.

00:30:20:01 - 00:30:46:07
Sara Gutterman: But I say, you know, better to have those in the bill than not. And then something else that's really important is some of the social justice investments. So, you know, there's $60 billion in that act that's carved out for environmental justice initiatives and frontline neighborhoods. So that's that's really important as well now. Next slide please. And let's get to the next section in terms of decarbonization in the built environment.

00:30:46:07 - 00:31:37:03
Sara Gutterman: So again if anyone has heard me present pretty much about anything I you know, these are just some commonly referenced stats by me and others in the industry. The construction sector is the most conspicuous, conspicuously consumptive sector in the economy, right? It consumes a tremendous amount of energy and electricity. It produces an overwhelming amount of emissions. It, you know, and given this is the stat that it always trips me up, it always kind of surprises me every time I hear it or say it, which is quite often, you know, given the fact that over the next 35 years, we're expected to expand our bills environment globally by 2,000,000,000,000ft², which is equal to the built environment

00:31:37:03 - 00:32:10:06
Sara Gutterman: in of New York City every 35 days. You know, it's so clear that we have to get to zero now. Fortunately, the, you know, net zero energy, water and carbon is really emerging, as, you know, an imperative mandate within the real estate sector, frankly, mostly driven by investors. And so we're seeing, you know, that as a market driver, but we're also seeing the benefit of net zero.

00:32:10:09 - 00:32:38:12
Sara Gutterman: So for example, net zero energy homes, you know they may have a little bit of a higher cost. Although right now in today's market we're seeing that that cost differential even in terms of the upfront cost is not as large as it once was. But if you look at the operating costs and just the annualized RR, which could be anywhere from 3 to 10%, clearly there's a much better value for net zero homes.

00:32:38:12 - 00:33:02:00
Sara Gutterman: They yield more value for homeowners. They help create generational wealth. There's the lower cost of home ownership, higher resale value in many cases, and just a future proofed and more comfortable home now. Next slide please. So if we're going to talk about decarbonization for the built environment, the first thing we need to talk about is sustainable design. Right.

00:33:02:00 - 00:33:31:00
Sara Gutterman: And we need to change our programing with respect to design in general. Right. And we need to really start thinking about climate responsive homes based on where a home is located, not just in terms of their climate zone, but things like orientation. Do they you know what what what's the implication of daylight with respect to solar gain and thermal mass?

00:33:31:03 - 00:34:05:16
Sara Gutterman: Are we looking at a tight building envelope that will reduce infiltration losses, things like duct losses? Are we really thinking about windows and insulation properties are thinking about things like exterior colors, property. In a hot climate, we have to use lighter colors to reflect the sun, right? If we have darker homes with dark roofs, all that's doing is, you know, absorbing sunlight that the mechanical systems are going to have to offset, work harder to offset.

00:34:05:21 - 00:34:30:26
Sara Gutterman: But I think fundamentally, even before we get there, you know, we really need to think about. Things like how much space do we really need to have a good quality of life? We have seen the consumers that homeowners and home buyers over the course of the past, let's say decade, but certainly over the past, the court over the course of the past five years, they are looking for smaller footprint homes.

00:34:30:26 - 00:34:52:27
Sara Gutterman: They get, you know, they're not looking for McMansions anymore so much unless they have large families or multiple people that work from home. But in general, we have data that corroborates that smaller footprints are more desirable right now. But I think also, you know, we need to again, think about things like, all right, our planet is getting warmer.

00:34:52:27 - 00:35:25:13
Sara Gutterman: So, you know, we need to have that proper orientation and building envelope to deal with more cooling loads and days. We need to design for energy efficiency and energy reduction. And we can't really separate out decarbonization from efficiency, electrification and resiliency anymore. Next slide please. So you know, once we've kind of asked ourselves these range of questions that can help us optimize the sustainable design.

00:35:25:14 - 00:36:07:28
Sara Gutterman: Right. Designing for decarbonization. The next piece of the puzzle is a tight building envelope and energy efficiency. And making sure we have that type building envelope and we're weather rising and, you know, and utilizing best building science practices on all six sides of a structure. And, you know, that's really important. So if we look at the building envelope elements from insulation and windows, cool roofs, you know, etc., there's a lot of options now that again, are at price parity or maybe have a little bit of a markup, but have such a fast payback period that the value proposition is there.

00:36:07:28 - 00:36:35:14
Sara Gutterman: And then as we move inside the home into things like mechanical systems, hack water heaters, energy efficient appliances, smart controls, etc. again, these things have really become a no brainer. And from our data and I'll show you this in a little bit, they've really become must haves for today's home buyers, driven by millennials and older Gen Z, who are spending more money buying and remodeling homes than any other segment in the market.

00:36:35:14 - 00:37:14:24
Sara Gutterman: And that's going to be the case for decades to come, because they will be driving the housing market for decades to come. And by deploying these types of products and systems, as you can see by the numbers on this slide, there's a huge amount of energy efficiency and cost savings that can be recognized, that can very easily provide added value to builders and contractors and building professionals, so that you are offering a better quality product home at either the same price with just lower long term operating bills, or possibly a little bit more.

00:37:14:26 - 00:37:43:22
Sara Gutterman: But again, it's very easy to pencil out the numbers in a short payback period and short timeframe. Next slide please. Now after sustainable design and energy efficiency in the building envelope and best building, best building science practices, the next thing we really need to think about is resiliency. And you know, I really think that in many markets today resiliency is still kind of a nice to have.

00:37:43:23 - 00:38:21:12
Sara Gutterman: But I think very soon it's going to be a must have because it's going to be integrated into code. But again, just like with those sustainable design questions that we need to ask ourselves as building professionals or even homeowners and home buyers, these are just simple questions that we can ask in terms of, you know, what are the climate events that we're most likely to experience based on our location, our geography, our climate zone, our weather patterns, the topography of our site?

00:38:21:14 - 00:38:49:24
Sara Gutterman: You know, are we more prone to wildfires or and drought, or are we more prone to super storms and flooding or hurricanes and then to design accordingly? You know, I think across the board there are just some, you know, very simple and easy solutions. Certainly in terms of, you know, roofing and siding and making sure we have windows and tie downs, if, you know, we need to and fire wise landscaping.

00:38:49:24 - 00:39:15:22
Sara Gutterman: And there's so many options now that are beautiful and cost effective. There's so many resources like National Fire Protection Association's Firewise program for any community basically west of the Mississippi. Now, since the western part of the US is on fire. And if you go to the next slide, please. I think that now more than ever. There are some great options.

00:39:15:22 - 00:39:44:04
Sara Gutterman: I'm showing here a beautiful picture with a very durable cultured stone solution. But I think the key for resilient building is really selecting materials that are long lasting, durable, maintenance free. Here again cultured stone. These are some talking points that they shared with me which I think are really important. You know, think about, you know, thermal gain. If you're in a hotter climate, you know, do you need overhangs and shading.

00:39:44:05 - 00:40:11:27
Sara Gutterman: If you're in a cooler climate, you know, you want that solar gain during the day. We also need to think about the general lifespan, right. So and that's not just for resiliency, but that's another really big thing in decarbonization products that last longer and don't have to be replaced or repaired are definitely going to contribute to decolonization. You know, we need to think about the freezing and thawing of our homes and the materials on them.

00:40:11:29 - 00:40:40:26
Sara Gutterman: Are they going to crack, crack, crack and ship and fade? Do we need to replace paints and coatings and ceilings all the time? Or, you know, can we put durable products again like this cultured stone product in place and have that, you know, last for a long, long time. So we don't need to repair our homes as frequently and we can decrease the, the, the embodied carbon from that aspect.

00:40:40:29 - 00:41:18:13
Sara Gutterman: Next slide please. Now electrification a fully electric home is one where space heating, water heating, cooking are electrified through the use of heat pumps and induction cooktops. Fortunately, electrification technologies are rapidly becoming cost effective and reliable. In fact, in some markets, they're actually more cost effective than fossil fuel based products. And they you know, they're the projections here in terms of the market opportunity.

00:41:18:13 - 00:41:50:15
Sara Gutterman: Again, the financial opportunity is extraordinary. We're anticipating about a 500% increase in electrification technology revenue, you know, over the course of this decade, from about 2.4 billion in 2020 to about 13 billion by 2029 for electrification technologies for homes alone. And so, you know, I think that there is, again, a financial opportunity here that we can really take advantage of.

00:41:50:17 - 00:42:33:14
Sara Gutterman: But, you know, it's not just about costs. Of course, the use of natural gas in homes contributes to the emissions of about 560 million tons of carbon dioxide every year in the US alone. Gas stoves can also emit pollutants such as nitrogen dioxide and carbon monoxide into homes, resulting in asthma and other ailments. And, you know, just everyday indoor activities such as the cooking of meals can really impact indoor air quality and release those invisible pollutants that, frankly, sometimes reach levels that would be illegal outdoors, you know, according to the EPA.

00:42:33:15 - 00:42:55:01
Sara Gutterman: So, you know, I think that it's really important that we look at the electrification of homes. Now, electric homes are not a new concept in the US. In fact, according to the US Energy Information Administration, about 40% of all homes nationwide are already all electric. Now, that's primarily in the South because that's just, you know, how they power their homes.

00:42:55:01 - 00:43:33:13
Sara Gutterman: But, you know, we are certainly starting to see municipalities from California to New York either require or at least create incentives for the electrification of homes. And next slide please. So, you know, we talked about some of these enabling technologies. I think obviously, you know, solar systems are imperative for electrification. The good news is that today's solar photovoltaic cells can collect and harvest more power in less space for less money than ever before.

00:43:33:16 - 00:44:04:08
Sara Gutterman: Inverters are absolutely amazing. Some of the advancement in inverter technology is really incredible. And then I would say the battery storage solutions right now are on a hockey stick growth curve. We are seeing companies from, you know, kind of the Cadillac of off grid solutions like Blue Planet Energy through to Kolar to create battery storage, offer battery storage solutions.

00:44:04:08 - 00:44:36:25
Sara Gutterman: And the battery storage sector, I think is, you know, we're going to see leaps and bounds in terms of advancements in technology there. We're also seeing huge advancements in technology, which I'll talk more about in a minute. And then induction cooktops. We get to work with great companies like LG. We just featured a whole range of of Signature Kitchen suite or SKS appliances, and our vision House Austin with Millennial influencer.

00:44:36:25 - 00:45:03:04
Sara Gutterman: And it just was such an elegant and beautiful solution. And it addressed efficiency and indoor air quality that it was just a no brainer. We're, you know, smart controls for enhanced demand side energy management. I'll get to those some more in a minute. I think really play a primary role in the electrification equation, not just because they provide fresh air exchange for homes, but they basically serve as heat exchangers.

00:45:03:04 - 00:45:26:28
Sara Gutterman: So they bring in fresh air and they bring it to the temperature of the indoor air. And they and they actually suck out stale air from inside the home, creating that air exchange. So if it's a hot day and you want cool air in the home, the IRB brings in hot air, cools it down before releasing it into the home, and it takes out hot air from the house and releases it outside.

00:45:27:00 - 00:45:53:26
Sara Gutterman: And then of course, not just EV charging technology, but we really have our eye on electrical vehicle to grid technology. So your EV can communicate directly with the grid to serve as a backup battery storage for resiliency purposes, but also peak load shifting, some of that demand side energy management, and frankly, cost savings. If you go to the next slide, please, I mentioned heat pumps.

00:45:53:26 - 00:46:25:08
Sara Gutterman: So heat pump technology can utilize outside or inside air as a heat source and then can exhaust, you know, to either the inside or the outside based on seasonal needs. Advanced heat pump technology uses a third of the energy for air and water heating than conventional HVAC and water heating technologies, and that's important because, you know, heating and cooling accounts for 10% of our national greenhouse gas emissions along just HVAC.

00:46:25:11 - 00:46:52:21
Sara Gutterman: And so when we talk about heat pumps, we really promote variable speed motors, which are more flexible and kind of offer a a bigger range of ability rather than just kind of going on and off. You know, they can offer different ranges of, you know, in that variable speed. And so I think the variable speed heat pumps are really the option for us.

00:46:52:24 - 00:47:24:11
Sara Gutterman: I think some of the challenges like cost, lack of familiarity, and the fact that a while back there may have been challenges in colder climates, a lot of those have been overcome and heat pumps have been proven to work quite well in colder climates. I know we're installing them in a couple projects here. We're doing at 9000ft in the mountains of Colorado, and then as you can see, some cognition data that I've pulled in clearly, the interest, the consumer interest, the homeowner interest is there.

00:47:24:14 - 00:47:44:19
Sara Gutterman: They know, you know, our our audience at least, which is comprised of early adopter and first mover consumers. They know what he pumps are. They want them in their homes for for heating and cooling and, and water heating. And then they want it partly because of the cost savings and partly because of the energy efficiency. Next slide please.

00:47:44:22 - 00:48:11:12
Sara Gutterman: So I mentioned smart technology. I am really impressed right now with the ecosystem of smart technology that's available. And that's not only smart thermostats and lighting. And you know, some of the products that have been around for a while, but now some more of the really advanced interactive technology. Schneider electric has a system called Wiser, which really optimizes demand side energy management.

00:48:11:12 - 00:48:45:28
Sara Gutterman: So it measures loads, you know, different devices and mechanical systems and everything that contributes to energy use in a home. And it can shift loads, it can communicate with the utility. It can help with a time of use pricing and peak load shifting. So if you're charging your EV, the system can automatically talk with the utility and charge that EV at off peak times rather than at on peak times.

00:48:46:01 - 00:49:20:29
Sara Gutterman: It works really well with solar plus storage system, so that a home can draw energy demand from the battery storage on the solar system during peak hours. And then, you know, recharge the batteries during off peak hours when when pricing is lowest. Next slide please. But you know, I think at the end of the day, it's really important that to reach our climate goals, we shift from just thinking about net zero as net zero energy to net zero carbon.

00:49:20:29 - 00:50:03:22
Sara Gutterman: And you know, that's not only important because of the operational emissions of our built environment, but also it has to do with, again, the embodied carbon of all of the the products that we select. And so again, I'll go into that a little bit more in a minute. We are starting to see some codes address zero carbon. So there's a zero code that's been implemented in Washington and some other municipalities that have really strong targets, aggressive targets, targets for reaching zero operational and embodied carbon by 2030.

00:50:03:25 - 00:50:09:05
Sara Gutterman: Next slide please. Now.

00:50:09:08 - 00:50:38:09
Sara Gutterman: Go back one, please. Sorry. Mary Kestner, our production manager, is running the slides for me today. So she's the wizard behind the curtain. Now to get to decarbonizing the built environment, there's a couple things we really need to think. One is offering incentives on the municipality level. So let's say reduction on property taxes for net zero and electrified homes, rebates for energy efficiency improvements.

00:50:38:16 - 00:51:20:23
Sara Gutterman: In a recent panel that I was able to facilitate for Green Builder Media Sustainability Symposium early this earlier this year in April, an architect from California mentioned that Italy has 110% rebate program for energy efficiency upgrades, including exterior insulation. And what that has done is really jump start to kick started the economy there. It's put contractors back to kind of full time work when there was kind of a lull in their market, and it's really kickstarted the energy efficiency, you know, kind of initiatives there to improve the efficiency of the built environment.

00:51:20:25 - 00:52:13:16
Sara Gutterman: You know, I think also the pathway to decarbonization has to involve weatherization, addressing infiltration losses, insulating ducts or going ductless, making sure that we are following a rigorous inspection cycle along the construction journey. I think also really understanding performance metrics. So part of this is upfront modeling, but then part of it is diagnostics and data collection. In California, contractors are now responsible for homes and buildings that they work on for, I believe it's ten years for new construction and five years for retrofit, and it's really important to have that data collection in order to understand what's happening in the built environment so that you can understand, you know, what is happening, who's responsible, you know,

00:52:13:17 - 00:52:48:08
Sara Gutterman: if something needs to be swapped out or if it's not functioning properly because of either improper installation or improper operations and usage, it's really important to have that data. I really believe in reporting energy use at the point of sale. And then I've talked a lot about embodied carbon and the way that I think we really need to address this is through environmental product declarations, lifecycle analysis, LCAs, carbon tracking tools, which I have in that blue box.

00:52:48:10 - 00:53:12:24
Sara Gutterman: There's a bunch of them out there. Now the passive House initiative uses for in. There's also some other databases and tools like IC3 and Beam and Athena, which I'm seeing more and more building professionals. That's architects and builders. And even some contractors start using. And then, you know, I think one of the biggest obstacles right now is the labor issue.

00:53:12:26 - 00:53:38:04
Sara Gutterman: I've heard, like, for example, in our revision house, Scottsdale, that we're doing with the building scientist Steve easily, he's talked with some of his local contractors and asked if they would do installs of induction tops or heat pump technology or, you know, just interesting and innovative applications for, let's say, you know, insulation, kind of advanced building science practices.

00:53:38:04 - 00:53:51:18
Sara Gutterman: And the response that he has gotten in certain cases is, well, we don't do that. So if you want to work with us, you got to do it the way we do it. And that's, you know, problematic. Next slide please.

00:53:51:20 - 00:54:26:08
Sara Gutterman: Next. You know, we do need to look at some of these barriers right. So few utility companies are funding the electrification of homes. And a lot of existing programs are not really looking at existing homes, particularly low income houses and how we electrify those. But fortunately, you know, there are some programs that are being put in place, like California's low income weatherization program, electrification programs, certainly the weatherization assistance program that are addressing decarbonization.

00:54:26:10 - 00:54:30:00
Sara Gutterman: Next slide please.

00:54:30:02 - 00:54:54:07
Sara Gutterman: I envy energy is an example of a utility that we work with that's doing a good job of promoting electrification in the built environment. But I think at the end of the day, we really need to think about as homes becomes and buildings become electrified, you know, one, we're going to have to upgrade transformers, conductor, service panels, infrastructure, other equipment.

00:54:54:11 - 00:55:19:02
Sara Gutterman: Who's going to pay for that? Is that the homeowners themselves? Is it the utilities? So I think there's going to be a combination of the utilities themselves again. And envy energy is a good example that are adding renewable energy sources of energy. They're also offering energy efficiency incentives and rebates and programs like smart thermostats and home energy audits and assessments.

00:55:19:04 - 00:55:54:06
Sara Gutterman: They're offering time of use rates, natural disaster risk mitigation and ensuring that communities have the proper power service and panel sizing, and then also working with code bodies to make sure that antiquated codes aren't preventing these upgrades, which we're seeing happen in certain areas across the country. Next slide please. And water. You know, basically what I say is if you are in the building industry, if you live in a house or if you breathe, you need to be paying attention to water.

00:55:54:08 - 00:56:26:19
Sara Gutterman: It is it is really the most urgent topic of our moment in terms of water quality and availability. Next slide please. And you know, if we look at the just the total usage of water in our homes, if we look at low flow faucets, showerheads, toilets and appliances, you know, if by using these water solutions and I can't even say they're innovative because they've been around for a while.

00:56:26:20 - 00:56:57:05
Sara Gutterman: So to me, they're just the, you know, kind of no brainers, you know, the baseline, but they can really reduce water usage by up to 30%, saving, you know, 700 gallons of water per year. You know, for home, we see that, you know, toilets are the biggest offender. So when we work with companies like Niagara, who offers some of the most efficient toilets on the market, that actually can make a really big impact.

00:56:57:05 - 00:57:25:10
Sara Gutterman: If you think about, you know, all the toilets that are in any given house and then all of the houses and all of the commercial space, you know, the amount of water that we can save is incredibly impactful. And 50% of water interior use is used in our bathrooms. So showers and toilets and faucets. So, you know, I think things like swapping out those low plumbing fixtures is of paramount importance.

00:57:25:10 - 00:57:52:07
Sara Gutterman: But then, of course, we can look at leak detection and water monitoring systems, gray water systems, you know, and other elements that can really help us solve the water conundrum. Next slide please. Now I'm going to go through this next section pretty quickly. But this is some data that we have. Again I mentioned millennials. They're driving the housing market spending more money on buying and remodeling homes and any other audience segment.

00:57:52:08 - 00:58:25:11
Sara Gutterman: Next slide. And you know we can see that sustainability is of paramount importance to them. Next slide. Interestingly corporate sustainability ESG, EPD. This is the top consideration that our millennials tell us that they that they consider when buying products for their homes. Next slide. And they really care about climate change mitigating and adapting to climate change. And I think next slide.

00:58:25:12 - 00:58:58:10
Sara Gutterman: That's because they are impacted by resiliency. You can see in the turquoise they're millennials more than any other audience segment say that they are very impacted by climate events hurricanes tornadoes extreme temperatures wildfires. Next slide please. You can see they are interested in electrified homes. Next slide. And they're interested because electricity is expensive or you know there. Oh sorry.

00:58:58:11 - 00:59:19:03
Sara Gutterman: What would prevent them from buying all electric home electricity is expensive is is one of the responses. But actually the most common response is nothing. Nothing would prevent them from buying an all electric home. So we had it in another category and people filled in. Nothing would prevent me from buying. We thought that was an interesting proof point.

00:59:19:04 - 00:59:47:07
Sara Gutterman: Next slide please. And when we asked what the biggest benefits to owning an all electric home are, it's in reducing their environmental footprint, having a healthier and a higher performance home. Next slide. And when we asked about what they would invest in to make their home all electric, it's heat pumps for water heating and heating and cooling solar system smart thermostats induction conducts.

00:59:47:13 - 01:00:23:20
Sara Gutterman: Next slide. Clearly energy efficiency is important. Next slide. So our solar panels. Next slide. Battery storage. Next slide. They're interested in healthy homes. Next slide. They would make the switch from gas water heaters to electric heat pumps and induction cooktops to improve their indoor air quality. Next slide. Now my last section here is as important as any of the previous sections.

01:00:23:20 - 01:00:58:03
Sara Gutterman: So hopefully everybody can hang in for about another ten minutes with me. And this is we. In order to get to decarbonization, we have to see the continued rise of ESG in the corporate environment. Now fortunately, you know, ESG. So environmental, social and governance has become paramount to corporations, partly because they need to satisfy stakeholder demands, but also because they can achieve cost savings, drive revenue and reduce risks.

01:00:58:05 - 01:01:33:04
Sara Gutterman: So a lot of manufacturers are deploying ESG strategies to boost productivity and improve resource allocation and strengthen their supply supply chain. So there are these tangible benefits that they're seeing now. One thing of note, we're kind of in the wild West Frontier days with respect to ESG monitoring and reporting, but I think that's actually going to change very soon, partly because the International Sustainability Standards Board or the Esrb announced that they are setting some baseline global standards for reporting.

01:01:33:04 - 01:02:02:29
Sara Gutterman: And then also because the SEC did announce their climate risk disclosure guidelines and requirements. Those aren't finalized yet, but we really think those are going to push through a lot of ESG practices and policies on behalf of manufacturers. Next slide. In the real estate space, we're seeing a greater focus, again, really driven by investors on ESG in community development.

01:02:02:29 - 01:02:50:29
Sara Gutterman: So builders and developers are really asking questions about the environmental and the social and the governance impacts of communities. Next slide. And just like with the housing market, you know, we are seeing a lot of millennials driving the demand for ESG in in real estate and in other areas. Now, obviously ESG is driven by corporations. Fortunately, there are some leaders, several of which are here in the building industry with us that are taking huge strides to decarbonize their companies and also the products that they create, and therefore the homes and buildings that those products go into.

01:02:51:01 - 01:02:56:25
Sara Gutterman: And next slide. So every.

01:02:56:28 - 01:03:24:13
Sara Gutterman: July August issue of Green Builder magazine recognizes eco leaders. And again I'll just point out a couple of these. So I'll start with LG and LG. Just as a company has an excellent sustainability story. And you know that crosses the spectrum of their energy efficient HVAC systems or heat pump water heaters, induction cooktops, you know, energy storage systems.

01:03:24:15 - 01:03:56:24
Sara Gutterman: There are clients and their electronics at this point. They're really designing for decarbonization. They've been an Energy Star partner of the year for nine years. And they're really helping, you know, building professionals and consumers alike adopt solutions that deliver energy efficiency and again, drive that decarbonization. So that's really important. This year we really recognized LG for the way that they're tackling the electronics plastic problem.

01:03:56:24 - 01:04:20:29
Sara Gutterman: So they are their goal is to recycle 95% of waste generated at production sites by 2030. They're designing for recyclability in that circularity that I talked about. They are implementing take back programs. And you can see here, you know, just a tremendous amount of impact that they're having on plastics recycling. Next slide please. The next company I want to call out is ring.

01:04:21:00 - 01:04:53:28
Sara Gutterman: And again ream is also really designing for the future through sustainability design shirts they're bringing together. You know, they're you know people across different departments on their team to look at product design with respect to how to reduce impact and increase decarbonization. They're designing for reuse or cycling comfort. They're eliminating plastics and they're packaging. They're utilizing renewable energy.

01:04:54:00 - 01:05:26:29
Sara Gutterman: And clearly, as you can see from some of their sustainability goals, they're really evolving their product with the specific goal of reducing the overall corporate footprint and reducing that, achieving waste, zero waste to landfill by 2025, which is really substantial. The other thing about ream that I really like is, again, they are training the workforce to do the installation to understand recycling best practices.

01:05:26:29 - 01:06:05:13
Sara Gutterman: And I think that's really, really important. Next slide please. Opener is another partner of ours. They've been a partner since our inception about 17 years ago. It's another company that throughout their entire value chain, from product design to manufacturing to sales and distribution. They're really doing a comprehensive job of understanding not just which products they can offer into the market, like radiant heating and cooling fire protection systems, which, you know, again, are becoming just a baseline requirement for any home or building in the West.

01:06:05:15 - 01:06:45:14
Sara Gutterman: Super efficient plumbing manifold systems. You know, they're not only stepping up, you know, to kind of the climate change and decarbonization call by providing the right products. But also they are looking to source 100% renewable energy by 2025 and reduce their greenhouse gas emissions and their waste as well. Next slide. Niagara. I mentioned them a little earlier. So Niagara again I mean they are solving the water crisis one at a time really with their stealth technology that has a vacuum assist that can reduce the gallons per flush of about eight.

01:06:45:14 - 01:07:20:19
Sara Gutterman: And that's substantial, because if you look at these numbers, you know, a 3.5 gallons per flush toilet, which is a very inefficient toilet, uses upwards of 19,000 gallons per year, whereas a 0.5 gallons per flush toilet is about 3600 gallons per year. And that's even less now, you know, with with certain models. So, you know, I think that companies like Niagara, even though, you know, we say, you know, just I mean, looking at their spectrum of low flow offerings, which can save water and bills.

01:07:20:21 - 01:07:49:08
Sara Gutterman: You know, I think that when you look at the total impacts of, for example, they showed us a case study which I have here in Washington, DC, of a multifamily building that achieved a 70%, 78% water reduction with 26 units with these point eight gallons per flush toilets, but they saved over $30,000 a year on water bills. So, you know, again, substantial resource and cost savings.

01:07:49:14 - 01:08:29:09
Sara Gutterman: Next slide please. So I'm going to close I'm going to finish up I've got two more slides. But there's a lot of information that I want to relay here. So again just give me about five more minutes of your time because of what I really want to say is that, you know, I think that it's very clear that we have an inventory issue here in the US and really across the globe, you know, so for the past two decades, builders and developers have kind of been ignoring this missile missing middle segment, which if you want to talk about Army, it's maybe 80 to 170% Army because really they were looking you know, historically, builders and

01:08:29:09 - 01:08:59:13
Sara Gutterman: developers have relied on the price per square foot valuation metric, which really meant that the larger a home, the more money that they could make. However, you know, in order to get to decarbonize built environment, we've got to turn that metric on its head. You know, really, because in recent years, shortages of land and labor and materials have really exacerbated the missing middle housing crunch, escalating it to unprecedented crisis levels.

01:08:59:16 - 01:09:26:08
Sara Gutterman: You know, we really have to rethink the way that we are approaching housing, the way we design and build housing, the way we value housing. And we have to shift the entire ecosystem. In the US alone, Freddie Mac estimates that the nation is short upwards of 3.8 million missing middle homes today, and there are fewer units available for sale or for rent than at any time in the last 30 years.

01:09:26:08 - 01:09:48:21
Sara Gutterman: And we're in a really pivotal moment. And I think that if we fall into the trap of continuing to base home metrics on lowest upfront cost price per square foot, even Army metrics that will inevitably perpetuate the vicious cycle that got us here in the first place and will prevent us from being able to decarbonize the built environment.

01:09:48:21 - 01:10:11:18
Sara Gutterman: So really, unless we are building next generation homes that are net zero electrified, resilient and healthy and connected and solar powered, and in some cases prefab to sell for performance and quality control and the labor issues. All we're really doing is building structures that someone down the line is going to need to fix, repair, upgrade or tear down.

01:10:11:21 - 01:10:59:05
Sara Gutterman: And if we put ourselves in what I like to call Army jail, where we're building homes to meet some arbitrary lending metric that's no longer applicable in today's market. Not only do we do ourselves, future homebuyers and communities a disservice, but again, we put up a roadblock to really thinking creatively about decarbonization, because really, the only way to get to a decarbonize built environment and housing stock and to create that financial incentive that I mentioned earlier, the long term generational is to shift away from that outdated price per square foot valuation metric and finally recognize that full cost that, that that sorry, lowest upfront cost is not full cost.

01:10:59:07 - 01:11:29:18
Sara Gutterman: And again, you know, that means we're going to have to start thinking about housing differently. Next slide. And I promise this is my last slide. So we really need to think about homes as a solution for health and wellness. You know clearly indoor air quality has surged in interest and awareness since the pandemic. And, you know, it has really become not a nice to have, but a must have for many homeowners and home buyers.

01:11:29:18 - 01:12:05:10
Sara Gutterman: In fact, in a recent survey, Healthy Home was identified as as important as location when making home buying decisions by a large portion of our early adopter and first mover progressive audience. Next, you know, we have to decisively, conclusively, and irreversibly, once and for all, shut the door on any thinking that doesn't recognize that if we are building homes that aren't high performance, healthy energy, and water efficient decarbonized, we are just simply building tomorrow.

01:12:05:13 - 01:12:36:24
Sara Gutterman: And, you know, I think at the end of the day, we also need to drive adoption of building solutions that are scalable, that minimize waste, that optimize quality control, that's solve for labor and supply chain challenges. In many cases, this could be prefab. It could be structural inside of panels. It could be insulated concrete forms, but certainly solutions that are higher performance, that are healthier, that are more resilient than site built, site built and stick built solutions.

01:12:36:26 - 01:13:08:26
Sara Gutterman: We also need to rethink how we're using our space and prioritize enhanced density and mixed use communities where appropriate. And you know, I think that our cognition data shows that home buyers are good. They want mixed use. Communities have everything from retail spaces to co-working spaces. So they maybe don't work from their homes, but they work nearby. They don't have to commute, but then also have things like community gardens and walking trips.

01:13:08:29 - 01:13:53:28
Sara Gutterman: And we also need to work with our, you know, pull out the bottlenecks, like, you know, things that that drag down and drag out development processes, drive up costs and prevent the construction of multi-family structures. So we need local governments to act quickly to update burdensome requirements like outdated zoning and land use and density and entitlement policies. And, you know, I think finally, we need to really start developing new financing vehicles that address current funding gaps for a decarbonized built environment that capitalize sustainability upgrades and improvements and incentivize energy efficiency and resiliency.

01:13:53:28 - 01:14:17:19
Sara Gutterman: And I think the solar sector provides a really good example. The solar industry was able to grow here in the US through power purchase agreements, or pays, which allowed homeowners and building owners to effectively lease solar systems rather than paying for them outright and upfront, which really boosted the adoption of renewable energy. And we're actually starting to see that in some other sectors.

01:14:17:19 - 01:15:03:14
Sara Gutterman: So companies that are paying for smart home devices demand side energy management devices, battery storage, electric vehicle chargers, etc. and those companies are actually making their money back on energy savings, either through energy markets or they're being paid directly from utilities. So, you know, I think if we can create these new financing vehicles that take line items out of the cost of our homes, then builders and developers can focus on higher quality, higher performance decarbonized homes and buildings with a decreased embodying carbon footprint that are healthier, that are more resilient and comfortable at the same price as more conventional homes.

01:15:03:17 - 01:15:42:00
Sara Gutterman: And so, you know, ultimately, we need to drive change throughout the entire housing sector to generate a meaningful solution to the housing crisis and shift us to decarbonization. But that will not come from Pavlov like thinking or resorting to outdated valuation metrics that separate profit and performance. But rather we need to ensure intricately combined profit performance decarbonization together so that we can really yield, you know, the highest reward for builders, developers, other building professionals and the homeowners themselves.

01:15:42:01 - 01:15:57:18
Sara Gutterman: So next slide. With that, I am going to wrap it up. Thank you all so much for taking an extra 15 minutes here with me today. I am sorry. One more slide.

01:15:57:20 - 01:16:12:20
Sara Gutterman: Instead of staying you staying on and taking questions, I am going to let everybody enjoy the rest of their Wednesday afternoon. My email address is on this slide. Sarah. Sarah.

01:16:12:22 - 01:16:40:28
Sara Gutterman: Please email me with your comments and questions. I will get back to you as soon as I can. And I really want to thank cultured Stone, Rheem, LG, Niagara, and MBNA just for their ongoing partnership and for all of the things that they are doing to shift us to a more decarbonized built environment. Everyone's providing an interesting solution in their own way, and everything helps.

01:16:40:28 - 01:16:52:08
Sara Gutterman: Everything's important. So thank you again so much for being here today. Really appreciate your time and your interest, and I look forward to seeing any questions that you have via email. Take care.