HOW CLEAN INNOVATION CAN BOOST CLIMATE ACTION

By Andrew Lau, Director, ESG Advisory, Colliers

What is clean innovation?

Clean innovation is the development and implementation of new technology to help tackle climate change, protect ecosystems and plan for a more sustainable future It includes advancement in renewable energy, energy efficiency, waste management, water conservation and sustainable transportation. Extreme weather, flooding and wildfire events have motivated technology companies to focus on decarbonisation and climate resilience solutions. The success of clean innovation not only helps to combat climate change, but it also draws a significant demand from investors, with many investing in clean innovation as a strategy to generate positive impact to the environment and economy.

What problems can clean innovation help solve?

The applications of clean innovation are endless and can be implemented across the value chain particular for building operations Some use cases from recent projects applied in commercial buildings and hotels are referenced below which demonstrate how clean innovation can support nature positive operations and behaviour.

The first example is innovation in cleaning detergent products which is heavily used in buildings particularly for hotels. In usual practice, single-use plastic bottles filled with chemical detergent such as liquid soap are delivered from manufacturing facilities to logistics centres, then further distributed to wholesalers and eventually to the customers’ hands. This process generates significant carbon emissions through the transportation by logistics vehicles and energy use required for storage. Besides it occupies a large amount of storage space inside a building which is unnecessary and inefficient. After the detergent is used, the bottles will be either sent to recycling facilities or directly to the landfill. Switching the detergent to a plantbased, powder-form that simply requires the addition of water can reduce over 90% of the carbon emissions generated and energy used from raw material preparation, transportation, and diversion of single-use bottles to landfill or recycling facilities Furthermore, the storage space requirement is also reduced significantly, creating a positive financial and wider impact to a city with limited space like Hong Kong.

Smart kitchen ventilation system is another good example of clean innovation Hotels and shopping malls usually have a number of restaurants to attract visitors The kitchens of the restaurants are usually equipped with water wash fume hoods There is a problem faced by the food and beverage industry (both Chinese and Western cuisines) from water wash fume hood. Not only do these hoods consume large amounts of energy and water, but the hoods’ surface is usually oily and gives cooking odour emissions to the surroundings. With the Hong Kong Government tightening the Air Pollution Control Guidance for the standards of PM2.5 (PM: Particulate Matter) and with the general public’s increased demand for a healthier environment post-pandemic, there is an urgent need to tackle this issue.

Smart kitchen ventilation systems resolve the odour issues by applying short wavelength ultraviolet-C (UVC) light to break apart the bonds in the oil in cooking fumes. This technology can improve the air quality and completely remove the need for water consumption With a good amount of IoT sensors equipped, a smart kitchen ventilation system is capable of slowing the fan when demand is low and with the data collected the system itself can continue to learn and improve the operational efficiency Applying these systems brings substantial cost savings for the business, including electricity, water and sewage tariff costs An added benefit is a reduction in maintenance costs Traditional ventilation systems use filtration and chemical-based treatments, requiring regular maintenance, but by making use of UV light - a natural and chemical-free way to break down pollutants, less frequent maintenance is needed Compared with traditional kitchen ventilation, this smart kitchen ventilation system can save over 50% of power and 100% of water consumption.

The third example of clean innovation is the use of biodiesel. Biodiesel is derived from waste cooking oil, animal fat or vegetable oil, and emits a smaller amount of polluting gases when burnt, making it more environmentally friendly than traditional fossil fuels. There are several types of biodiesel blends, including B5, B20 and B100 ‘B’ refers to biodiesel, while the number (5, 20, 100) means the percentage of biodiesel mixed with traditional diesel Biodiesel can be seamlessly integrated into existing backup power systems for building operations For the lower percentage of biodiesel mixing with the diesel generators (for example 5-20%), no or little modification is required to the existing machines On the other hand, B100 (100% biodiesel) requires the installation of new systems which, while being more costly, yield the greatest environmental benefits.

In addition to generating electricity from the energy produced during combustion, thermal energy (heat) is generated as a by-product By integrating a heat recovery system into the biodiesel generators, the heat can be captured and transferred to other systems, for example hot water boilers, swimming pool heating systems and other heating system within the building. This can further reduce the carbon emissions and generate more financial value with the by-products.

From an operational perspective, it is feasible to collect the waste cooking oil from restaurants, with the waste cooking oil serving as a base to produce biodiesel and in line with the above-mentioned process. This is a good example of the circular economy being strived for by reducing demand from natural resources, burden for waste treatment and achieving a carbon reduction in the same process.

More than climate action

There are challenges to clean innovation including the safety of ingredients used in the chemical detergent, efficiency of smart kitchen ventilation systems, and the infrastructure and weather effects on the biodiesel available for use. Practical experience and in-depth technical knowledge can help foresee obstacles during implementation and accelerate the success of clean innovation development and application. Challenges faced should not hinder progress in adopting clean innovations, which could play a vital role in the

decarbonisation pathway and climate action. Clean innovation accelerates the journey for climate resilience and with the right application it can create positive value for businesses and investors.

With a robust Environment, Social and Governance (ESG) strategy, it becomes easier to adopt clean innovation to drive positive results for the climate, environment, society and economy Governments and financial regulators demand a more transparent disclosure The Hong Kong Stock Exchange (HKEX) has requested all listed companies to disclose their ESG report according to the Taskforce for Climate-related Financial Disclosures (TCFD) by 2025 Some components in TCFD include materiality assessment and scenario analysis, in which most material climate risks will be identified and reviewed on a regular basis This can serve as a clear guidance for clean innovation application and maximise the benefits for companies It is recommended to start small, observe the benefit, gain confidence and scale-up accordingly The future is in hands of the stakeholders to control global warming within acceptable range to achieve climate and nature resilience.

About Colliers

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