Welcome to the world of smart buildings and retrofits in our latest episode titled 'State of Smart Buildings and Retrofits in 2023'.
This time, Umesh hosts Stefan Schmidt, building sustainability expert and Director of Smart Buildings Technology at Wiredscore, to unravel the trends shaping the present and future of this industry.
With Wiredscore's extensive work in the certification of global buildings and tech programs, the episode explores the top growth drivers, their impact on regional disparities, and the tech adoption barriers that bridge continents while revealing intriguing differences. From the UK to APAC and the US, discover the unique challenges and common threads woven into this transformative sector.
Next, Stefan uncovers the essence behind technology companies' involvement and paints a vivid picture of the evolving state of smart building solutions. As we traverse the UK, APAC, and the US once more, gain insights into regional nuances and disparities that underline the chasm between supply and demand expectations versus reality.
Finally, we engage in a thought-provoking discussion on the essential factors that can propel retrofits to the forefront. The conversation navigates the balance between user-centricity and operational efficacy—raising questions on whether the focus on occupants inadvertently sidelines the operators and maintenance teams.
Tune in to explore the thoughts and critical perspectives of our speakers, offering a panoramic view of the world of smart buildings and retrofitting.
Hello, everyone. Welcome back to yet another episode of the Forever Forward podcast. And today, I have with me Stefan from WiredScore, everyone knows WiredScore and the work they're doing in the area of smart buildings and both from certification perspective and a host of other things, which obviously Stefan is going to talk about.
But before we really move forward, Stefan, would you want to say hello to the listeners?
Hi everyone. Nice to be here. Nice to see you all.
Awesome. now we're going to talk about, I mean, there's been one topic, I think it always, we find one word which wins over the other as far as marketing is concerned.
For the past few months, there has been one word within smart buildings, which is getting a lot of traction. It's Retrofits, right? So I thought why not talk to Stefan about the current and perhaps the future state of smart buildings and retrofits because at WiredScore, they have access to a lot of data, they talk to a lot of asset owners, operators, and they do their certification.
But really, before we move further, Stefan, why don't you introduce yourself and tell us everything that you’ve done in the past to whatever you're doing right now at WiredScore.
Yeah, no, that sounds great. So yeah, my current role at WiredScore is Director of Smart Buildings Technology. It's been a long journey to get here. I actually started my career working at Microsoft, working on kind of behavioural retargeting projects, which is a bit like, I normally say to people like Cambridge Analytica, but boring.
You're trying to sell British Airways flights or pet food or something like that. And, I had the classic millennial epiphany. I did a master's in sustainability, because I felt like I wasn't contributing to the world in that way. And that somehow dragged me into energy performance and optimization of buildings.
You know, I started my career crawling around plant rooms, reading energy meters, looking at BMS data and then that kind of slowly progressed into a kind of broader smart building scope. As I realized that the data coming out of those systems was really quite poor compared to what we were working with at Microsoft.
And then, yeah, that's taught me work client side and now I'm here at WiredScore working on our smart buildings, projects, innovations, certifications, and kind of taking a technical leadership role across the business on that front.
That’s awesome! Do you miss the plant rooms?
I actually do. It was really good for my posture walking around staring at the ceiling all day because I did kind of stretch my neck forward and push back.
No, it was good fun actually. That's true.
Any like significant memories or any standout thing that you recollect from your plant room days? I mean I love it. Whenever I get an opportunity with customers, I make it a point that I go to plant rooms. Obviously I can't stay there for long, but I do make it a point to go there.
I think one of my standout memories actually was, we had a big project for Oxford university and we were optimizing their lab spaces, which are obviously big energy consumers on campus. They have all these kinds of, you know, very specific temperature regimes, pressure regimes, they have to maintain.
So it was quite critical. We had to put on full hazmat suits and things like that. But my absolute favourite actually was that we went into a researcher’s office, which was extremely clinical. He's kind of an Austrian guy. And he was working on mind controlling flies with light signals and which kind of makes you a bit of a crazy person I think in its own right.
But, you know, while he was working on his kind of Planet of the Apes style project, he was absolutely panicked by, you know, the potential that we were going to turn off anything in the building or adjust anything in the building because these fruit flies that he'd been breeding for over 15 years, had become temperature sensitive and humidity sensitive.
So yeah, it was just funny. You kind of encountered some characters there.
Gosh man, I wouldn't want to be in that position. I mean, at least whoever was the facility manager there probably wouldn't want to be in his or her shoes for sure, man, but that's fair. I mean, that's interesting.
In fact, when we met last month in London, I did not know that you'd been in the plant room. So that's actually a good finding here. But, You know, and obviously also spoke about the new role that you're probably on a mission, the role that you're playing at WiredScore. Let's go around innovation.
How's that coming along? Have you found your way on what exactly the role means?
Yeah, we're about a month in now. Really exciting because, you know, anything innovation-related is always fun and interesting, isn't it? And we're just in the stages of doing early discovery at the moment, trying to understand where the pain points are, where we can add value as an organization.
And yeah, there's still a massive untapped market. I think anyone that works in the smart building space will tell you the same. There's so much potential for growth and change and movement and yeah, it's just exciting to be at the forefront of that again and build something new.
Awesome. So let's dive into the podcast now.
First part of it is where I would say, so I've broken up this in trying to look at the supply and demand side, because I think, smart buildings and retrofits, is very much biased from the supply side, not much from the demand side, but we’ll probably figure that out from Stefan.
You've certified so many buildings across the years. Is there a trend that you're looking at in terms of defining the state of a smart building or retrofits? I mean, what, according to you, are the top drivers? Whether you look globally or at a regional level that you've looked at so far.
Yeah, I mean, specifically focusing on the retrofit side, I think there's still ways to go, is a short answer, right? You know, we're definitely seeing more adoption. So WiredScore's kind of developing certification and that we're selling certification is constantly rising. And
I think that's kind of related to that. I mean, especially in the office space, that kind of. Flight to quality, right, where more and more people are having to upgrade their buildings now to keep them relevant. There's a lot of fear around appraisals. And as a result, there's investment in technology, there's investment in changing the use case for those buildings.
And the reality is obviously that, you know, 99.9% of buildings are already built. So no, we're definitely seeing a shift. I think we would say, you know, that classic Rogers adoption curve, right? That little bell chart was still on the front face of it. I think we're starting to move into that early adoption phase, but generally speaking, there's movement.
And I mean, for me, really, if we can crack the data acquisition challenge, then we're going to be in a good spot to really push that forward.
So any difference or in terms of why adoption is happening, any difference in trend that you're observing? At a global level, let's say UK or US or predominantly, are the drivers the same everywhere? I mean, whatever you've seen so far.
Yeah, it's an interesting question. I mean, the main thing that I just did, you know, ESG, I thought at the start was just going to be the new net zero or something like that.
What's really manifested is that it's not. You know, it's coming all the way down from the top, these kind of funds, the investors are talking about it, they're mandating it across their entire investment portfolio and real estate, no matter its form is a part of that, you know, that seems to be the really at the core or the core driver for all of it.
I mean, You know, some regions are slightly different in that sense, you know, I would say, the UK and the U.S. is very E focused still, and there's a lot of kind of regulation around that. WiredScore is in a strong position there as well, just because, you know, we support that E quite well, and, you know, as we see ourselves cited in annual reports with our customers and things as an indicator of that movement.
Whereas APAC, I think it's slightly different. I was speaking to Dustin earlier in the week, and he was saying that so much of their success in APAC, they're an air quality sensor manufacturer, if anyone doesn't know, has been linked to the S, you know, installing in workplaces, people going for certifications like World Portfolio, and then, you know, the kind of the air quality sensing side being a big part of how they speak about the S.
In that context, so yeah, different places, different letters in the ESG alphabet that are at the fore, but that kind of overarching topic is the big thing.
But predominantly it's the ESG, if you look at combined is what is driving all of this in that sense. But isn't it also from purely, maybe just a second step in that context.
This is also from a compliance perspective. Or like, for example, I know there are certain standards in the UK from the minimum energy efficiency standards, so on and so forth. So they're also from the compliance perspective, or largely investor pressure, just to make sure that your portfolio is right? Or is it a mix of both?
It's a mix. You're absolutely right to point that out. You know, I think, the markets where there is strong regulation, in particular on the energy side, there's more demand for those kinds of solutions and products. We definitely see that. The U.S. is a good case study for that because there the regulation is very, very local, very regional.
So, you know, while you have cities like Washington, D.C. or New York, where there's a real push on that front, other cities, you know, there's barely any movement at all. So it's quite an interesting test case for, you know, the power of regulation driving that investment.
The stick kind of does the job in that sense.
Yeah. Now, I think following up, I mean, on that, what are typical barriers to adoption? I know smart buildings retrofits may and in most cases would mean different things, but just for clarity, I mean, I'm using it interchangeably but what is the greatest barrier that you've seen in adoption of technology to get towards making buildings smart?
And again, we are talking about the brownfield, the buildings that have already been built. What are you seeing as people talking about the biggest, you know, barriers being, I mean,
I think jumping straight, you know, at the juggler, it's just cost and ROI, you know, I think a lot of technology is still expensive, especially retrofitting technology is expensive.
And really what it comes back to is trying to get that data out of the buildings, right? You know, the software that's in the market isn't more or less expensive than other software. And I don't really see that being the barrier in general. It's about trying to get that data, you know, where companies are, you know, installing sensors effectively, or they're integrating effectively with Facebook systems, then it's easier to justify that outlay.
but you know, otherwise, if you're not a shiny top line project, the center of Manhattan or Frankfurt, you know, your small business part outside Wakefield or Darby, it's just difficult to justify. And I think that's where, you know, coming back to regulation, the ESG stuff, that's where that is really effective because now people are having to invest even in those lower grade properties because they're still part of their ESG performance.
They're still part of their portfolios and their balance sheets as well. And when you say the cost of the ROI, you're largely talking about from the perspective of hardware, changes and everything else that needs to be done. So for example, if there might be buildings which don't have the kind of controls that should be in place.
So if you want to look at changing the controls, you're probably looking at a capital expenditure and you don't know how to really get the ROI. Is that what's really kind of been, the barrier, is that so? Exactly. It's just both sides, right? You know, I've got that, let's call it a grade B, a grade C building, you know, there's not entirely, not completely let, you know, from a fund performance perspective, it's, there's not a huge amount of revenue coming in, I might be thinking about shifting that building because it's, you know, a high risk of not complying with certain regulations, you know, the idea of then investing a significant amount of money and, you know, completely replace the control system or The access control system, whatever it is quite alien.
And you can understand that from a business perspective. And I think that's where the industry, our industry needs to do more to come up with better business models. You know, the technology is there. Technology is not the issue. It's that we haven't cracked the business models to actually go in and bridge that fragmentation.
You know, I think so many tech companies come into this space. I think that commercial real estate is the single beast. You know, someone who's developing multi-family residential is completely different to someone who's, you know, a speculative developer for a multi tenant office building or a large university operating their own campus and owns all their buildings.
It's really diverse. There's a real rainbow's worth of. Of different interests and priorities there. And I think that's one of the biggest challenges, just coming up with better business models. What you're essentially saying is, if it's trying to make sense, you can't look at painting each of the sub sectors within commercial real estate with the same brush.
and one of the things, and interesting when you say that, one of the things we've been obviously hearing is there might be a change in the way people use. The real estate, right? Like offices may not purely be offices anymore and stuff like that. How much of that uncertainty is also playing into and again, this could, this is probably maybe a philosophical question or maybe, even how much of that uncertainty is really playing into the retrofit, you know, and the investment uncertainty.
A huge amount, an absolutely huge amount. I mean, you know, the cost of capital's gone up, you know, the certainty of revenue has gone down. There's no zero interest money available anymore. Yeah, it's scary. I mean, if I were an asset manager right now, or a leasing manager, I'd be, you know, excuse my French, shitting myself a little bit, because I'd be thinking, okay, you know, where is this all headed?
And there's just so much change at the moment in the industry that it's so difficult, I think, for organizations to invest. Long term and kind of, you know, bigger scale and that, yeah, that slows down the pace of adoption of technology for sure. And I mean, have you also been like, so particularly from a Wiredscore perspective, so you've largely been what in the commercial real estate built environment or you ventured outside of the CRE built environment as far as certifications are concerned?
Is that WiredScore specifically, as in which we're in the verticals? WiredScore specifically, yeah, yeah. Yeah, so WiredScore focus is mainly on Office. We do have a multi family certification. So it's WiredScore Home. It's a lot bigger in the UK and the US than it is in our other markets.
And it focuses purely on the connectivity side, rather than the smart side. So we don't have a SmartScore for Home, if you like. But, obviously, a part of my role right now is, considering new asset classes. And kind of we're going to go, so watch this space. The reason I ask this question is that when I was in the UK, one of the former top executives of one of the FM companies mentioned that, you know what, the CRE based FM, thinks very differently to a manufacturing based FM.
So. When you would look at, and that really shows up. So for example, you know, if you look at Mercedes Benz and if they are giving out their contracts on facilities management for their buildings or facilities, they would tend to have certain clauses which kind of reflect their outcome from or outlook from manufacturing.
So I was just wondering whether you're also seeing, maybe that could be as part of your innovation exercise and seeing if how do you really take on the non CRE built environment? because I think they are responding faster in my opinion. You mentioned universities and stuff like that. There's a, I mean, I think it just makes sense for them because there's a lot more certainty in how the asset or the asset class is going to be used versus when you look at commercial real estate.
Plus obviously a bit of other things. I'm not sure that you've explored that so far. no, no, no, absolutely. And you're totally right. You know, even having the, you know, the workplace environment where you've got, you know, large fortune 500 style companies that own huge campuses, you know, industrialists is obviously booming.
I actually think one of the biggest, most underserved sectors from a smart village perspective is the residential market. You know, we obviously have the home certification, which is growing and that's great but we don't have that smart piece and you speak to so many so many developers that are trying to get data out of their residential portfolios, you know, I was just speaking to one the other day, you know, they were talking about 4000 units and how they were just completely dark.
They just had nothing there that they could report back to the investors. And, you know, they weren't entirely sure what the performance was to optimize the contracts that they had For the maintenance and it's just bizarrely underserved. Actually, if you think about it, curious, would it just be energy or you would be saying, you know, you would have your boilers or whatever, or everything in anything, like there is nothing available there.
Is that what you're saying? Yeah, exactly. And you know, I mean, those buildings don't have a central plan, right? So, I mean, everyone kind of generates the apartment and all that kind of stuff, but there's still a huge amount of maintenance that goes on. You've got all the access control systems.
And I think for those organizations, they're increasingly under pressure from a service charge perspective, because the costs of everything are going up. So they're, you know, looking at attracting renters, the renters are looking at the service charges and saying, you know, that's really expensive.
This is very UK specific now, really expensive, and that's making them interested in the data so that they can actually adapt their contracts that they have to these organizations. You know, why am I spending so much on maintaining my CCTV? Why am I spending so much on maintaining my grounds? I think that's where it becomes really interesting alongside the whole ESG conversation around reporting on.
But, broadly what I hear from you and the number of times the investors coming is like all of this is largely the investor pressure. I mean, if you look from that, but that's fair, at least that's there, coming more from the demand side. And again, I think I swapped the supply and demand, but supply was really from the perspective, but
I think you also have a program on and now moving on to the other side of the spectrum. You also have a program where you, for technology companies as well, where you basically give them scores, which feed into your overall certification and helps sort of buyers decide on technology in one way or the other.
What's the cohort looking like? I mean, and you've worked across that particular program. Oh, what's the common cohort looking like? Like what are people solving? What are people not solving in this entire intersection of smart buildings or retrofits? Yeah, it's great. I mean, so the credit solutions program was something that we launched in November last year.
I was heavily involved with that as well. It came out of an interest from our kind of customers who were struggling with solution identification. You know, they're kind of a lot of them had bought into stuff that maybe wasn't what they wanted it to be, you know, some vaporware out there as well.
So unfortunately, and, you know, we decided to take it upon ourselves to leverage our own data on which solutions were being deployed, which we can see that certification process to kind of start qualifying them off the back of that. If we're going really well, you know, our kind of our certification customers love it.
You know, we're helping them identify based on their kind of smart score criteria, which solutions are on the market for those criteria that can help them out and yeah, it's a really mixed cohort. So there's, it's probably 80% software, 20% kind of hardware sensors. We've got a couple access control systems in there, a few sensing companies and IAQ stuff, those sorts of things.
But mainly on the software side, I think, you know, the broad two camps there are probably kind of occupant experience facing software and kind of operational software, which has to do with the kind of the resilience, the efficiency. Of the building, I would say we've had probably equal demand for those two sides as well.
There's a lot of, again, it comes down to kind of, you know, organization you are, if you're developing a speculative multi-tenant building, you're probably more interested in the user experience side, because that's going to help you lease and gather. You're more of a long term holder and operator. You're more interested in that operational side.
So yeah, it really just depends on the kind of fund and the kind of developer or operator that you are. And, is that broadly also the same, like the Slator cohort where you take different regions or have you rolled out this program across the different regions? Are you at least talking about a few countries right now?
I mean, the one for the companies, technology companies. Yeah. Yeah, so it is global at the moment. We are, you know, more heavily focused on our core markets, which are kind of UK, Europe and the U.S., and we only launched into the Middle East and APAC over the last two years but I think it's really interesting thought about that regional coverage.
And this is something that I have to say, I learned through work on the accredited solutions program that there's still huge regional differences in the solutions market. You know, it's so interesting, for example, that Germany has its own very unique cohort of solutions, which dominate the market there.
You know, France is similar in some respects. And what would the differences be? Like, how does the difference work out? In what way, in terms of solutions? It's not so much that they're delivering different use cases, it's just that there hasn't been that consolidation across the markets, you know, there's not kind of a solution that's delivering across the board.
And that's actually one of the biggest things that our customers struggle with these portfolio rollouts as well, is kind of they like a solution in one market, they want to take it globally, but actually the solutions aren't anywhere near as global as the real estate organizations are, you know, oh, sorry, we can't deploy Japan, or no, we don't do Qatar.
or whatever it is. And then all of a sudden they have to go to local players there. It just creates this kind of, you know, job of different data sets and data sources. And you know, that makes everything that sits on top of that hard again. So yeah, it's a bigger challenge than I still realized.
And I actually think that more M&A action in the space will be net positive than a net negative.
and acquisitions happening in this space. And I think that probably will continue to happen. For one reason or the other in that sense, you know, moving on, do you see a mismatch anywhere between supply and demand from in terms of expectations or reality of what the asset owners operators are wanting and what the solutions are, like any mismatch that you see, or, yeah, I would say what I think is really obvious is that the top of the stacks, the top of the software stack, the software side.
Has really outpaced from an innovation perspective, the kind of the demands of a lot of the people that are working in these buildings and operating these buildings. You know, the amount of time. Is that good or bad? Like innovation? I don't know. I don't know whether it's necessarily a bad thing, but I think it's the state of play at the moment.
You know, there's so much talk, for example, about AI in the smart building space right now, right? Because AI is a big topic on ChatGPT. We're, realistically, we're miles away from that. You know, you cannot get structured readable data out of the majority of buildings. And then, how are you meant to train a model on building data from ten buildings that were built in 2020 or later?
You know, that's not representative of the wider building stock and how those buildings perform in any way. So I really think that the big challenge, and I've kind of mentioned this before, is data acquisition. You know, if we can find ways to make that data acquisition really effective in building and creating uniform data sets that as a manager with, you know, imagine I'm Heinz and I've got thousands of properties across the world.
If I actually had the same data set. You know, on every single property, the same way that Facebook has the same data set on every single user, you know, in that system. Yeah, yeah. Then actually I can, that is the platform that I need, but at the moment it's not at all like that. It's like I have one user and you know, it's kind of.
That's an interesting question. I mean, an interesting point. Sorry. So when you say data acquisition, just picking you on that, are you talking about now the way I've always looked at two sets of data? One is computer readable, you will have your time series data, which would come from sensors and stuff like that.
And the other, which I think would largely be in place for residential or the small, , you know, commercial real estate buildings is the unstructured data. Or let's say the text data, which comes through from different softwares they might be using from work order in that perspective. Are you referring to both or are you just referring to one, when you say data acquisition?
It's an interesting way to split it, actually. And I think you're right, there is a real differentiation there. I would say I was referring more to the former and probably that's where I've spent most of my time, is in that kind of harder systems integration space, rather than thinking about the more, I suppose, soft data that could come out of messaging services, or things like that.
But it's a valid point, and you probably... And this, I was actually gaming, I was in Manchester. So I'll tell you about this game. I was extremely cold in Manchester. They went into my hotel room. The heater wasn't, I mean, the heating system was not working. And then, you know, the person came and tried multiple times to do ABC and so many other things that it did not work.
And it struck me that, you know, while I mean, the built environment is so divided, as you said, you can't just look at it with one lens. One on one end, you have facilities where you have sophisticated software systems to look at maintenance records, so on and so forth. And on the other hand, you have so many decentralized systems.
And by the way, one of the things is that the decentralization is going to be on the rise because of electrification and other things that's going to happen in the built environment, that you cannot ignore the unstructured data anymore. I mean, and again, no solutions yet on that, but I personally feel that.
You know, as important and in a lot of places, you may not get time series data or let's say continuous operational data where this, I mean, I think the structure, the text or the other data would actually become a very good proxy in that sense. But again, yeah you know, we would've to see how that pans out.
But, but yeah. So you see the difference, you were talking about the difference. Sorry, I took you off track, because this was something that I really, you know, myself very passionate about. But yeah, you were talking about the supply and demand, and you're saying that too much heavy on software and kind of software is kind of ahead of what, how the industry anywhere else.
Or you would also say that hardware is not where it should be. And that's where the next wave of innovation is really going to happen. Well, I actually think that's the case. And I think that's the problem is that the, you know, VCs are pumping money into the software side, because that's where they see those subscription revenues that they know and love.
But actually the real problem space is probably more on the hardware side. And it's not necessarily that there's not great hardware out there. I think there are good hardware solutions out there. It's that they're not, you know, cheap enough because they're probably not scaled or we're not working the right way and are not simple enough.
It's the fact that, you know, if I'm a building, you know, asset manager say, and I want to get, you know, some data out of my building, I probably have to sign a contract with a hardware company, or I have to sign a contract with a software company. I got to sign a contract with an installer. You know, from a contractual perspective, it becomes really, really quite complex.
And I think that's it. That combined with that fragmentation is still, you know, Oh, am I actually the end beneficiary of this investment? Is it my tenants or am I just, you know, passing costs, the service charge, what's going to happen if I sell it? When am I going to sell it? There's just so many moving pieces.
There's so much fragmentation. And I think the smart buildings industry needs to do more to simplify that fragmentation for those customers to actually enable this data acquisition to happen. Interesting you say it. I mean, I think obviously there's one company from the UK. I'm again forgetting that I raised a lot of money.
I think we spoke about the company. InfoGrid? InfoGrid. Right. Right. Now, again, later on, everyone's clarifying they're not into hardware as I would have believed, but there's another company called SenseEffect. From Europe. In fact, they just yesterday announced raising 25 million euros in series B, and they're actually you know, the space that you're talking about.
Although there, I think the founder Peter has that absolutely sensible thing: they've looked at industries in Europe and over the last three years, you know, small, medium scale enterprises and the focus on energy on the industrial front has been tremendous. And they've done really well. So they've raised 25 million euros of series B funding, pure play, sensor plus energy monitoring, sort of, solution in that sense.
So yeah, hopefully we get to see more of that in the built environment space as well. moving on, just to play sort of equal and then play the role of the devil's advocate or the wishlist. So we'd like to understand from you personally, where do you think will move the needle when it comes to retrofits?
Where are we falling short? Yeah, I mean, I think to summarise the conversation at this point, right? It really is that. The retrofits will succeed where data acquisition is cost effective and simple and can then feed the top of the stack to drive those outcomes that, you know, we know and love across the building space.
It really is that simple. If we can all find ways to make it easy for, say, an asset manager with 30 or 40 properties or 5,000 units, whatever they're doing to install this technology at scale in a way that isn't going to completely destroy their balance sheet, then, you know, see retrofits perform in the exact same way that we see premium, you know, shiny grade a buildings perform.
And one, this is slightly biased and as a host, I can obviously ask that one biased question. I mean, I feel bad about it, but I would love to know your opinion. I've always thought that the entire conversation around smart buildings, retrofits, everything has been so much around the user and occupant, you know, side of things.
It's the front end, as I would say and miss out the other set of users is like largely the people who actually operate and maintain and to the not so sexy part of the interaction with the buildings is that by sheer design or by we continue to do what remains a fundamental problem in the space?
Yeah, I don't know whether it's by design. I think it just comes back to the ease of it, right? I mean, putting an app into a building where you can book amenities, which has very little touch points, which the actual base building systems are easier, cheaper, arguably more leasable than, you know, doing the hard gritty stuff in the plant room and getting that working.
And I think that's just it coming back to the customer with the conversation. If you're a customer who's operating their building and, you know, like Oxford University and has a lab with a crazy pressure regime, that's going to be spending a million a year on energy. Yeah, I'm interested in spending that money.
I'm going to see that return and I'm going to implement a solution. Whereas if I'm an office building and all my energy costs are getting passed on to my tenants anyways, I'm actually going to be spending more money on leasing than actually a shiny front end app. Which looks good when I, you know, pull it together, my leasing brochures are probably more interesting.
So that just comes out to that, I think. So, but perhaps again tying together with all the compliances and the focus on, on the environmental system, maybe this would change us because now they would see value coming through. Hopefully it changes, that would mean. Decent business for a company like ours, if you're going to do that.
Yeah. so we can actually start tackling this climate change thing properly. That'd be nice as well. Oh yeah. I mean, you can't go to war without an army. I mean, no matter how sophisticated you might be. So at the end of the day, there are millions of engineers and technicians to actually manage the assets that, and yes, a couple of days back, I was ChatGPT, you know, and one of the things just trying to do this was.
Numbers are known 40% of global emission come from buildings. 80% of emissions from buildings are from the operating stage right. So what we are literally saying 30% or approximately 30% of global emissions Is kind of being managed by a set of people who will continue to overlook, which to me makes very less business sense, but I'm sure, as you rightly mentioned, that's the hard part of it, right?
And that's why it takes a bit of an effort to get there. But, I'm hoping we get there. So, hey, Stephen, thanks so much, man. It's always a pleasure talking to you. But just as a recap, I think one of the things that I probably picked from the conversation amongst others, I mean, Stephen, and I kind of agree with you that the, yeah.
Entire problem or opportunity as far as retrofits gets, rightfully sort of handle if the data acquisition problem can be handled, if it could be made very simple for everyone to know what they're consuming, how they're consuming, and then the more sophisticated things can happen in that sense, and I wish, you would have, I would have met you a few years back, probably would have taken that up as a challenge to solve versus what we're doing right now.
But nevertheless, its an exciting time for a lot of entrepreneurs to be in this space to show any last, you know, recommendations or a closing note from your side, Stephen. Oh, I mean, look, I think if I can end on a positive note, I think the future continues to be bright, you know, WiredScore's mission is to make the world's buildings smarter and better connected.
And I think the reality for real estate is that the buildings of this world will become smarter and better connected. It's a matter of time and like I said, if we can all work together as a smart buildings industry to better understand the kind of commercial business models, the real estate world and build solutions, which led themselves better to them, rather than getting, you know, sucked into cloud efficiency and the latest AI technology, then I think we'll see ourselves progress and have much more of an impact faster.
Here's hoping that happens that would obviously mean, well, you know, not just good business for everyone, but, but it would make sense to do that. Thanks a ton, Stephen, for your time. Really appreciate it. And thank you everyone else for tuning in until next time you take care and see you soon.