Smart buildings can help companies meet their ESG goals. Michael Moran of Microshare joins Ryan Chacon on the IoT For All Podcast to discuss smart buildings, ESG, and sustainability. They explore smart building technologies, what ESG stands for, the value of ESG, ESG investing, how smart technologies enable ESG, change management, and the future of smart technologies and ESG.

About Michael

Michael Moran is the Chief Markets Officer and Chief of Risk & Sustainability at Microshare. He drives global brand and market strategy and leads Microshare's risk and sustainability practices. Michael is also a Senior Advisor to Lynx Global Intelligence, a contributor to Foreign Policy magazine and Skytop Strategies, and a lecturer at the University of Denver.

Michael has held senior management and intellectual leadership positions at some of the world’s leading policy, financial, and news-gathering institutions and spent years overseas covering wars, elections, revolutions, and other events during an early career as a journalist. He has conceived of and launched successful franchises and product lines, managed complex rethinks of corporate strategies, websites, and editorial systems, and run key P&Ls in large corporations.

Interested in connecting with Michael? Reach out on LinkedIn!

About Microshare

Microshare creates smart building data at scale that drives cost savings and efficiencies and improves safety, risk management, and sustainability in commercial and public infrastructure of all kinds. Their EverSmart solutions produce data where none existed before, transforming brick-and-mortar assets into more valuable, efficient, and responsive structures and disruptively low prices. They help clients:

- Do more with less in a tight labor market

- Avoid risks to life and property

- Right-size real estate footprints and understand building traffic

- Boost tenant satisfaction and employee engagement

- Automate metrics for compliance and sustainability programs

Key Questions and Topics from this Episode:

(00:41) Introduction to Michael and Microshare

(03:19) What technologies are leading the way in smart buildings?

(05:53) What does ESG stand for?

(06:26) ESG value and ESG investing

(07:56) How are smart technologies enabling ESG?

(11:15) Change management

(16:39) Future of smart technologies and ESG

(18:56) Learn more and follow up

Transcript:

- [Ryan] Hello everyone, and welcome to another episode of the IoT For All Podcast. I'm Ryan Chacon. And on today's episode, we are going to talk about the current smart building technologies that are leading the way with smart building solutions. With me will be Michael Moran, the CMO and Chief Risk and Sustainability Officer at Microshare. And they are a company that creates smart building data at scale. Super interesting conversation. I think we'll get a lot of value out of it but before we get into it, we'd really appreciate if you would give this video a thumbs up, hit that bell icon, so you get the latest episodes as soon as they're out, and subscribe to our channel if you have not done so already. We truly appreciate it. Other than that, let's get onto the episode. Welcome Michael to the IoT For All Podcast. Thanks for being here this week.

- [Michael] I'm very happy to be here. Thanks, Ryan.

- [Ryan] Absolutely. So let's kick this off by having you give a quick introduction about yourself and the company to our audience.

- [Michael] Sure. Well, I'm Michael Moran. I'm the, you know, Chief Markets Officer and the Chief Sustainability and Risk Officer here at Microshare. I had a long career before this as a journalist, a foreign correspondent, then went into risk management. I was a partner at a company called Control Risks, and I had all, you know, so the journalism's always trailed me around. I still do work in documentaries and I write for a bunch of different outlets. But my main passion right now is smart building technology and particularly how that is relevant to the sustainability goals that the world is seeking to make real, and ESG, the larger ESG question. Microshare itself is, we've been in the smart building business since about 2013. We have a very powerful platform that makes it possible to service and solve business problems across a huge swath of the economy. So commercial real estate, manufacturing, logistics, pharmaceuticals, healthcare. We're in all of those various sectors. Mostly, you know, I think this is a story that's probably been told before on the podcast. You know, before the pandemic a lot of this was about cost savings and efficiencies. During the pandemic, the light bulbs went on in the C-suite and suddenly it was all on top of the sustainability, ESG thing, which was already starting to take traction before the pandemic. Things like being able to retain and bring people back into the office, being able to show that the office is a safe place to be, the air quality, you know, the water. All of these things suddenly became really top level questions for C-Suites and boards who were trying to figure out how much real estate they should have, what version of hybrid to adopt. So a lot of what we do has this kind of great double bottom line. It still has the cost savings, and efficiencies, and labor savings, but on top of that, you're getting metrics to tell you how you're performing in terms of the things you're saying in the marketplace about sustainability

- [Ryan] Right, right.

- [Michael] and ESG.

- [Ryan] Fantastic. Yeah, no, I think our topic today is very much in line with a lot of that we know we wanted to cover. So it's an area that we have dabbled in a little bit talking about when it comes to smart buildings and smart spaces, post pandemic, pre pandemic, even like kind of how things have changed, how smart technology are playing a role. ESG, we actually haven't talked much about at all. So I'm excited to kind of finally have an episode where we touch on that a bit. But maybe what we can do is just have you talk to us a little bit real quickly about current smart building technologies that are kind of leading the way in this space and how the tech and demand has really changed. You've already kind of hinted on it, like post pandemic, but just generally speaking, as it relates to the technology and the demand in this area, what's really leading the way here, and and we can probably kick things off there.

- [Michael] Sure, so there's a number of things that have been part of the smart building, kind of quiver for a long time. Occupancy data, something we call EverSmart Space, air quality data, EverSmart Air in our case, EverSmart Clean, which is about data-driven cleaning, sanitation. And then there are all sorts of other, you know, more kind of targeted point solutions, all of which we managed to put into this single platform that do things like mitigate risk, so leak detection, you know, the ability to save water. A lot of leaks just never get noticed. And you're paying for those and you're wasting water. Obviously the big ones cause enormous problems, liabilities, damage, et cetera. But, so a lot of these types of things that we once viewed as, oh, that would be nice to have, are now, you know, generating metrics that companies need, especially publicly traded companies, in order to back up the claims they're making. Almost all publicly traded companies now put out an ESG or a sustainability annual report in which they make certain claims and they set certain targets. This is necessary because the markets, people who invest in companies, are demanding it and increasingly in various US jurisdictions, but in particular in Europe, regulators are demanding it. They wanna know.

- [Ryan] Okay.

- [Michael] A lot of this gets confused for carbon footprint and climate change. That's a piece of it.

- [Ryan] Yeah.

- [Michael] That's the E in the ESG.

- [Ryan] Okay.

- [Michael] But there's also this whole social component about how you're treating labor, how clean is your supply chain, is there slave labor in your supply chain, if you're, let's say you're a fashion company, right, or is there, you know, a sense that your safety, your workplace safety, it needs addressing. And there are all sorts of things that IoT based sensors can do to not only improve safety but then to prove that you've improved safety. Essentially, the auditability is another deep thing.

- [Ryan] And so you've mentioned ESG a few times. Could you just kind of elaborate on that for our audience who's not as familiar what does it stand for and kind of what is the focus there.

- [Michael] Yeah, so ESG is environmental, social, governance. Those are three aspects of, you know, performance that companies are being asked to report on and are being judged on. There's a whole industry of big names from Fitch, and S&P, and Moody's, to Morgan Stanley who are actually rating companies now. It's assigning them grades based on their ESG performance. As is true in almost everything that happens in the United States, there's also a huge backlash against it.

- [Ryan] Sure, sure.

- [Michael] From the kind of what I think of as the kind of Chicago school puritan capitalists who say anything other than shareholder value is a perversion of capitalism and shouldn't be happening. The ESG argument to that has been that actually companies that score well on ESG tend to perform better, and in particular, perform better during crises periods. That's all being challenged once again, because this particular crisis happens to have boosted the stocks of energy companies that are very carbon intensive. So now this is the moment where the ESG enemies have chosen, they've chosen their battlefield perfectly. This is the time to strike, because they think that those metrics that show ESG companies doing well

- [Ryan] Right.

- [Michael] will probably lag, right?

- [Ryan] Yeah, exactly.

- [Michael] But so over time though, I think most economists agree that companies that are coherently addressing these issues are also coherently addressing all the other things that it takes to be a successful company.

- [Ryan] Right, as opposed to being like an added burden or a distraction or something that's they have to take on now.

- [Michael] Right. And you know there's certain big pools of money that simply won't invest in your company anymore if you're the enemy of the good, that's the way, you know,

- [Ryan] Interesting, okay.

- [Michael] they kind of characterize it.

- [Ryan] Gotcha. And how, like, and you've touched on this a little bit, but I'd love you to, if you could expand on it about how smart technologies are really playing a role in kind of this ESG space and give some examples. I mean, obviously you've talked about how the sensors and the technology in the IoT world now enable you to monitor and bring data in, that probably was not available before, but can you walk us through some of the, like the main examples when it comes to smart technologies playing a role in ESG?

- [Michael] Sure, so one of the, the most obvious ones is any kind of spacial occupancy sensor data

- [Ryan] Okay.

- [Michael] that you can get. So on the one hand, you know, this is being used in the post pandemic new hybrid world to take a good hard look if you're a corporate portfolio manager or if you're the CEO who has to go in front of the shareholders and say here's all our vacant real estate we're paying for. So which real estate is really performing, what do they really need, what are the downsides, there's no no quicker way to reduce your carbon footprint than to realize you don't need these hundred thousand, you know, extra square feet, right?

- [Ryan] Right.

- [Michael] So that's only a one-off though. The more powerful one is occupancy sensors allow you to understand, within a building, where it's being used, how heavily, what the patterns are seasonally, daily, weekly, on weekends.

- [Ryan] Yep, yep, yep.

- [Michael] And you turn the lights down, and you turn the heat down, or you know, the cooling. Those are big wins in terms of money, but obviously they're also big wins, again, this is that double bottom line in terms of your carbon footprint and your expenditure of energy and you know, so that is a great example of how we've seen now commercial real estate companies and REITs that have multiple buildings realize, oh my God, if I just save, you know, $50,000 in one building, I've got 600 buildings. That's a lot of money every year.

- [Ryan] Right.

- [Michael] Right?

- [Ryan] Right.

- [Michael] Now this all has to come along with some change management. You can't just create the data and it changes everything. No, you have to have your facilities managers embrace it and say, okay, well now I get it. We are gonna schedule this stuff according to usage. So there's all sorts of good things there. And those things apply also to things like cleaning regimens where, you know, the old way of cleaning was, you know, like Patton took land in France when he was there. You take everything, right? You send people forward and you clean everything. You touch everything every single day.

- [Ryan] Right, right, right, right.

- [Michael] Well, that's very inefficient. It puts chemicals all over the place where they don't need to be. And in a labor market like the one we're currently living through, you don't have the people to waste time. So you may have three on a crew that used to be four, you can clean as efficiently or more efficiently that those spaces because you have data that says no one went into that conference room today but this conference room got heavily used. So not only do we have to clean it heavily but we have to clean it halfway through the day as well.

- [Ryan] Sure, sure.

- [Michael] So those are real improvements that show up not only on, you know, the environmental side of ESG, but also as customer satisfaction and tenant retention. And actually health because a clean space is one that's not gonna cause absenteeism.

- [Ryan] Sure. Yeah, you mentioned something I wanted to talk a little bit more about, which was the change management side of things and I imagine that might bring up some challenges when it comes to working with some of these organizations, these buildings, the old processes that are in place, old patterns that are in place, and fixing those and having the data kind of support it. But obviously there's oftentimes resistance to change. So how is that kind of being addressed or handled or talked through in this using that data and, you know, how is that challenge really being overcome?

- [Michael] So the first challenge is to get this data and prevent it from overwhelming the client, okay, from our perspective. So that means creating dashboards that make sense, that are readable, that show patterns, and that, in the most advanced instances, not only recommend what you should do with this data, but also score it and also benchmark it against the industry. So,

- [Ryan] Okay.

- [Michael] all of those things are part of, you know, the products we call EverSmart products. But the reality is, even still, as you kind of alluded to, there's some people who are in their forties and fifties and sixties in the facilities management world, or even in the IT world, for whom this is just like, wow, you know, this is kind of where I stop. You know...

- [Ryan] Okay.

- [Michael] I bought CDs, but I'm not gonna stream, right? You know, everybody gets to that point in a lifetime where they're just not gonna adopt the new thing. So there does, you do run into some real challenges in terms of getting a commercial cleaning company to embrace new scheduling routines that the data is telling them to do. So we have to hold their hand a little bit and...

- [Ryan] Sure, I imagine.

- [Michael] That's, you know, we're not a consultancy but we do build in learning and kind of advisory into our contracts. But also we sometimes turn to third parties, like EY is a partner of ours and others. IBM handles some of our installation. So ultimately it's important to be able to put the right group of people and the right solutions in front of a client. Because if you just give them a colorful dashboard, our experience is they're just gonna never look at it. They'll see it once and go, oh good, that's what I got for my money and then nothing will change.

- [Ryan] Yeah, no, absolutely. And, it's not alone, you know, this industry is in kind of like unique in that sense in where, you know, bringing this smart technologies into it is going to require change in how day-to-day operates with this access to data. And there is resistance at times, there is education, learnings that need to happen in order for this to be successful from an implementation standpoint, so..

- [Michael] I'll give you a good anecdote, if you want.

- [Ryan] Yeah, sure.

- [Michael] So, I spent a good deal of my career in journalism. About halfway through, I was part of the launch team, it's something called msnbc.com. There's this whole new idea. we're gonna do a virtual old newsroom, like completely digital newsroom, 1996.

- [Ryan] Right.

- [Michael] I was voted the unlucky guy that had to go teach NBC news how to deal with this. And these people were used to filing a story a day, right? They were trying to get into Tom Brokaw's Nightly News. And if they didn't get in that date, then they didn't have to really crunch on deadline. Well, we were now asking them to file three and four stories a day. So that change management is not easy. Some of them never did it, you know?

- [Ryan] Yeah.

- [Michael] Some of them embraced it because they realized I have a good story but it doesn't quite make the bar for the Nightly News but I still want to get it out there because my sources won't come to me with the next story. So that was my pitch to them.

- [Ryan] Right.

- [Michael] So, you know, I've been through this kind of, you know, transformational expert before every industry has been deeply affected by the internet.

- [Ryan] Oh yeah, for sure.

- [Michael] Mostly for good, not necessarily journalism.

- [Ryan] Yeah, no, I mean, as it connects to, you know, the IoT space, especially if you think about like industrial manufacturing factory kind of workers, you're asking a lot for them to change a system that may not be broken, to optimize, and to get accessing. So we've had a lot of discussions on here around IoT technologies being implemented and brought into these kind of legacy processes and the resistance they've gotten trying to get it to be used by the end user, which is a very important piece to all this, is making sure that when you're building this, you're taking into consideration who the end user is, having them involved in the process, not just showing up one day and say, Hey, you now follow this because management said you have to. So yeah, it's kind of universal thing it seems like, right?

- [Michael] That a prescription for having the sensors ripped off the wall and....

- [Ryan] Yeah, yeah.

- [Michael] And essentially workers, for good reason, historically look at technology as an enemy. It's, that's something that...

- [Ryan] Yeah, they think they can replace what they're gonna do.

- [Michael] Exactly, so you really need to make clear what is the motivation for doing this.

- [Ryan] Right.

- [Michael] And also, these are not cameras. It's really important.

- [Ryan] Yeah, exactly.

- [Michael] Now I know there are some IoT companies that do use cameras, but, you know, basically that's not us. We try to stay on the right side of the privacy and big brother line.

- [Ryan] Right, right, right. I hear you. Let me ask you this before we wrap up is what does the future look like in this area of things like, you know, first time we really talked about ESG, but how does this area evolve and how are smart technologies do you see kind of continuing to grow their presence in enabling these initiatives to be successful, and just kind of what's the outlook look like from your perspective?

- [Michael] Well, the market for this is enormous now. I mean, it's gone from practically zero in 2010, I think it was Verdantix, you probably know who they are. They're one of the research firms that focuses on data.

- [Ryan] Sure.

- [Michael] It was 905 million dollar market in 2021 and they're saying it's gonna be 4.3 billion in 2027. So that's a pretty steep trajectory. A lot of that is driven by, this is the market for IoT derived sustainability data, right? The reason that is such a steep trajectory is because the realization is dawning on companies, even some of the laggards, that they need to do this. But secondly, to do it with in a labor intensive way is very expensive. I mean...

- [Ryan] Sure.

- [Michael] An ESG officer at a big bank like, you know, Citibank, or Morgan Stanley, that's a $250,000 headcount and effectively what they're doing in many cases is computing, they're going around with a clipboard, seeing what are we doing spending on this or that. Some of that can be automated. Much of it, in fact. And once you automate it, you're gonna get historical patterns that are not able to be challenged by somebody who's saying you're a greenwashing liar, you know.

- [Ryan] Right, right, right, right.

- [Michael] So people see the value of this as both in terms of the efficiency of it and in terms of actually reaching the goals. So you can't kid yourself with this, you know.

- [Ryan] Sure.

- [Michael] IoT's gonna tell you what you did and how the physical structures of the built world reacted to your initiative. So those are all really powerful drivers of the growth there.

- [Ryan] Absolutely. Yeah, it's an interesting space to really follow along. I mean, obviously seeing how IoT technologies are enabling these initiatives and contributing to success is obviously a great thing for the IoT space. So I really appreciate you taking the time to kind of talk to our audience about this. For our audience who wants to learn more about kind of what Microshare is doing, follow up on this conversation potentially, just kind of get a better grasp on stuff, what's the best way to kind of reach out, follow up, learn more.

- [Michael] Well for us, www.microshare.io is our website and...

- [Ryan] Okay.

- [Michael] My email is in my bio. You'll find it under the executive team.

- [Ryan] Perfect.

- [Michael] And there are plenty of videos that we've produced that kind of take you through how we believe IoT intersects with ESG and sustainability and other things.

- [Ryan] Perfect. Well, thank you so much, Michael. I really appreciate your time.

- [Michael] Alright, Ryan, it's been a pleasure.