What CFOs need to know about smarter building management

As businesses face rising energy costs, evolving regulations and growing ESG expectations, Chief Financial Officers (CFOs) are increasingly required to take the lead to ensure companies are compliant and delivering operational outcomes.

Beyond financial oversight, CFOs are taking a leading role in ensuring that infrastructure investments align with long-term sustainability and cost-saving goals.

As we understand, the recently passed Future Made in Australia policy highlights the Australian Government's commitment to clean energy, technology and innovation – reinforcing the need for businesses to adopt smarter, more efficient building management strategies. 

Additionally, new reporting requirements require large businesses to disclose climate-related risks, making energy efficiency and sustainability a bottom-line priority rather than just a compliance tick box. 

For instance, the Australian Government Emissions Reporting is another requirement which supports transparency, all Commonwealth entities and Commonwealth companies are required to report in their annual reports, the emissions from their operations in Australia or Australia's external territories . This is providing a picture of emissions from operations across all Commonwealth entities and companies, and helping to prepare for the phased implementation of the Commonwealth Climate Disclosure initiative.

In this evolving landscape, CFOs cannot afford to overlook the role of building infrastructure and management in their financial and sustainability strategies. Outdated Heating, Ventilation and Air Conditioning (HVAC) and cooling systems are not just a maintenance issue – they are a major drain on operational budgets with high energy consumption  and increasing carbon footprints. As expectations around ESG and financial caution grow, CFOs need to reframe smarter building solutions as both a cost-cutting measure and a long-term investment in sustainability. 

Here are three key strategies to consider: 

#1 Implement digital energy management to cut costs and reduce emissions 

Many businesses may lack real-time visibility into their buildings' energy consumption, resulting in inefficiencies, unnecessary costs and excessive emissions. For example, a commercial office building running HVAC systems at full capacity overnight, despite minimal occupancy, is a common scenario where energy waste occurs. 

In a carbon-conscious world, corporations face a significant challenge as buildings contribute over 40% of global energy and GHG emissions, with HVAC systems alone responsible for nearly 15%. 

By implementing digital energy management solutions, businesses can set energy efficiency targets, track real-time consumption and automate system adjustments to minimise waste. Companies such as Automated Logic (part of Carrier) use advance algorithms to continuously optimise HVAC performance, adapting to occupancy patterns and weather fluctuations. 

Beyond reducing costs, digital energy management solutions also equip CFOs with credible, measurable insights into energy usage and emissions reduction. This may  assist  compliance with mandatory disclosure. 

#2 Adopt Cooling-as-a Service (CaaS) to improve cash flow and sustainability 

Cooling systems such as chillers or rooftop units are among the largest energy consumers in commercial buildings and replacing outdated units  requires substantial capital investment. 

Cooling-as-a-Service (CaaS) allows customers to contract for ongoing, reliable operation and maintenance of cooling systems over an extended period and predictable payments rather than incurring an up-front capital cost for system or equipment purchases. The financial model allows customers to focus on their core business while benefiting from expert management of cooling infrastructure, ensuring comfort and operational efficiency. 

For CFOs, CaaS offers more than just predictable costs. It delivers a strategic path to modernise infrastructure, enhance energy performance, and meet ESG targets without straining capital budgets. 

#3 Invest in smart building management to increase asset value and productivity 

Commercial buildings that do not meet evolving sustainability benchmarks may risk declining asset values and reduced tenant demand. In commercial real estate, properties with low energy efficiency ratings often struggle to attract premium tenants, as companies prioritise sustainable workspaces that align with their own ESG commitments. Moreover, industrial facilities with outdated infrastructure face higher insurance costs and operational risks, making them less desirable for long-term investments.

Integrating thermal battery technology and other energy storage solutions can turn buildings into dynamic energy assets, reducing dependence on traditional grids while improving energy resilience.

Additionally, pursuing Green Star or NABERS certification enhances property value and tenant appeal. These accreditations act as differentiators in a market that prioritises sustainability, helping businesses achieve higher occupancy rates, improved rental yields, and long-term asset resilience.

CFOs play a crucial role in driving cost-effective, ESG-aligned building management strategies. By integrating digital energy management, Cooling-as-a-Service, and smart building technologies, they can improve operational efficiencies, enhance sustainability performance, and secure competitive advantages in an evolving regulatory and economic landscape.

"Disclaimer: This is for general information and is intended for general guidance only and Carrier is not liable for any loss or damages arising out of the use of this information".