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Buildings are the spatial foundation of our daily lives. They are our homes, workspaces, schools, hospitals and serve many other human needs and purposes. But buildings are also one of the largest global consumers of energy. They account for a staggering 40% of global energy consumption and are responsible for about 30% of global CO2 emissions. As such, it is imperative that we make both the existing building stock and future buildings energy efficient. And if we do it right, the green transformation of the built environment can bring about a kind of sustainability that fundamentally improves the well-being of us all. 

Energy efficiency in buildings is a global challenge  

The global green transition towards Net Zero Emissions hinges on our ability to use less energy. And ideally to do so without diminishing our quality of life. In other words, we need to become more energy efficient. Energy efficiency simply means using less energy to perform the same task – that is, eliminating energy waste. Energy efficiency has steadily made its way onto the green agenda in recent years. Google searches for the term have spiked visibly since the beginning of 2022. And with good reason. Energy efficiency is internationally recognized as one of the key instruments in the global green transition.

“The IEA, the International Energy Agency, have very clearly stated that energy efficiency is one of the very most important areas in terms of abatement policies. I think their calculation is that energy efficiency should ideally account for 40% of the mitigation measures to meet the Paris Agreement.” Stine Leth Rasmussen, Deputy Director General at the Danish Energy Agency

The Danish Energy Agency is largely responsible for Denmark’s political energy efficiency efforts, and as Stine Leth Rasmussen explains, buildings are a crucial target of those efforts:

“Energy efficiency in general is very important. And energy efficiency in buildings is particularly important. Buildings are with us for many, many years. And therefore it’s very important what we do in terms of both renovation and new buildings. It’s about the long-term sustainability.” Stine Leth Rasmussen, Deputy Director General at the Danish Energy Agency

If we take a moment to think about the life cycle of a building, from construction to lived life to demolition, it becomes evident why buildings account for such a significant part of our energy consumption and emissions. 

Construction is one of the biggest drivers in society’s management of resources. Today, many buildings use more energy during the first year of their lifetime than the following 80 years, meaning that more than half of a building’s energy consumption is used for construction. The way we build new buildings thus has significant impact on how energy intensive they are.

However, it is estimated that 85-95% of the European building stock that will exist in 2050 has already been built. So, we must also attend to the energy consumption of the buildings we already inhabit. When they are in use, the energy consumed by heating, cooling, ventilation, and appliances quickly adds up – to around 1/3 of global CO2 emissions to be exact. 

While energy efficiency in buildings has received growing attention in recent years, it still hasn’t permeated green energy discussions in the same way that other energy initiatives have. It just isn’t considered headline material:

“… it’s just more tangible. It’s a little bit more sexy if you’re a minister of energy and climate to go out and do ribbon cutting on a huge offshore wind park. Energy efficiency is a little bit less tangible in the sense that it is a combination of many things. It’s changing your window so you get the best in class windows. It’s changing your thermostats, or installing a new pump. Maybe you need to have a little bit of an additional installation. And there’s just a millions of these smaller initiatives.” Fleming Voetmann, Vice President, External Relations & Sustainability at VELUX

Fleming Voetmann is the Vice President, External Relations & Sustainability at VELUX, one of the world’s leading producers of energy efficient windows. And as he suggests, energy efficiency may be overlooked because it isn’t as grand as renewables or exiting new green technology. But that doesn’t make it any less important. 

“At societal level, they add up and are by far the biggest bet you could do in terms of driving down energy and emissions at a country scale. But it consists of so many small things at the same time.” Fleming Voetmann, Vice President, External Relations & Sustainability at VELUX

Even though we might not hear as much about all of these small things as we do of the big breakthroughs, important work is being done to further the agenda. Promoting energy efficient buildings has been a cornerstone of Danish green ambitions for over 40 years. And the innovative solutions developed by both the public and private sector have made Denmark a global leader in this field.

Denmark’s approach to regulation

Like many other countries, Denmark was hit hard by the oil crisis of the 70s. At the time, Denmark was 99% dependent on imported oil from the Middle East, so political inaction was not an option. As regulators began to rework Denmark’s energy mix, a commitment to energy efficiency followed, as Stine Leth Rasmussen explains:  

“We had a very high level of oil import dependency and therefore we needed rapid action. And that was, I think, basically the starting point for working very seriously with energy efficiency and with energy efficiency in buildings.” Stine Leth Rasmussen, Deputy Director General at the Danish Energy Agency

That work saw the introduction of several initiatives to lower the energy consumption of buildings. One of them was behavioural tools like campaigns and information to the general public about how to lower energy consumption through behavioural changes. Since 2006, Energy Performance Certificates have been instrumental in driving the green transition of the built environment. They rate the energy efficiency of a building and point to cost-effective ways to improve its energy performance. This encourages both building owners and potential buyers to consider the potential value gains of pursuing energy renovation. 

“The thinking behind the energy certificates is that, when people buy a new home, that is typically the point where they are more aware and where they are also more likely to go through major renovations, major changes of the house. This is where energy performance certificates help to increase the awareness, but it’s also about giving some very specific advice in order to what can be enhanced in the building and what can be improved.” Stine Leth Rasmussen, Deputy Director General at the Danish Energy Agency

Other initiatives have been more structural, like building code regulation. Designed to realise the potential for energy savings and reduction of greenhouse gasses in both new and existing buildings, Denmark has one of the strictest building codes in the world today. And it has paid off. The total amount of energy used to heat or cool a Danish building has steadily decreased since the 80s.  

However, these efforts also come with their challenges. Successfully implementing legislation in the actual planning of the built environment is no easy feat – something which those who carry out construction projects can attest to.  

COWI is a Danish based global engineering and architecture consultancy, with an explicit commitment to furthering sustainability in the built environment. They work on both public and private construction projects, and as Karin Pedersen, Urban Development Director at COWI explains it can be difficult to align the planning of projects with a regulative framework that is constantly being tweaked and improved:  

“A lot of the buildings that we build in Denmark, especially in the huge urban areas have been planned several years ago and it’s the same problem we have with the new urban areas. We are planning for areas that will be built within the next 10-15 years and I think that’s very important to have in mind and take into consideration that legislation will change, and we have an urgency of incorporating it in our planning right now.” Karin Pedersen, Urban Development Director at COWI

This challenge has notable implications, not just in terms of ensuring a sustainable building stock, but also a valuable one. Otherwise, we might end up with so called stranded assets which can put building owners in a vulnerable position:  

“Another big issue and we haven’t seen it that much in Denmark yet, but I think we we need to be aware of, is the discussion about stranded assets, that suddenly your building loses their value because legislation change. I was taught, that the best place to put your money is in real estate, then they’re safe. That’s not necessarily the case today, because there might be a lot of demands and changes in the legislation that suddenly can make your real estate having no value. So I think that is very important to have in mind when we reuse, rebuild and reconstruct in these new urban areas.” Karin Pedersen, Urban Development Director at COWI

Challenges like these make it all the more important that knowledge is shared across borders. Because Denmark has worked to promote energy efficient buildings for decades, we have gathered a lot of valuable experience as Stine Leth Rasmussen explains:    

“What we try to do is share experiences, both in terms of the dos and the don’ts. We have the advantage that we’ve worked with this for over 40 years. So we’ve learned quite a bit, both in terms of what works, but also in terms of what doesn’t work.”Stine Leth Rasmussen, Deputy Director General at the Danish Energy Agency

According to Stine Leth Rasmussen, one of the key lessons concerns the diversification of instruments:  

“I think there’s a lesson learned in terms of not relying on one single instrument but having a wide palette of instruments in play in order to address energy efficiency and energy efficiency in buildings. 

So we need some economic disincentives for energy consumption, such as tax on energy use, but also some economic incentives in order to make it even more attractive to invest in energy efficient solutions, such as renovation of the buildings via subsidies. And I think it’s also the Danish experience that there is still, even working with these economic instruments, there is still a good case for working with regulation. And finally, behavioral tools can also move something on top of this. I think it’s an interplay of different instruments that we need to take out of the toolbox.” Stine Leth Rasmussen, Deputy Director General at the Danish Energy Agency

How Danish companies offer the solutions

Danish regulators haven’t been alone in cultivating a greater focus on energy efficiency in buildings. Danish companies also work to continuously provide world class solutions and technologies in the field.  

One of them is VELUX. VELUX is one of the world’s largest producers of windows, and windows play a key role in regulating our heating and cooling in an energy efficient manner. As Fleming Voetmann simply puts it: 

“We focus both on making sure that you don’t lose heat and in the summer try and prevent overheating and thereby minimize the need for air conditioning.” Fleming Voetmann, Vice President, External Relations & Sustainability at VELUX

However, pursuing energy efficiency in buildings is just as much a question of health and liveability as well as energy savings. And to fully realise the sustainability potential of the built environment, all elements must be balanced. 

“When it comes to buildings, most of us spend the majority of our life inside buildings, whether it’s in schools, offices or in our private home and whatever. So, of course, you need to factor in a number of things. You cannot just solely focus on energy. You also want to make sure that you actually get a healthy dose of daylight, which I know a lot of people really appreciate. And, of course, you also want to make sure that you have a great indoor climate. At the same time, you also want to make sure that you have an energy efficiency element to it.  So we’re trying to balance all three things at the same time.” Fleming Voetmann, Vice President, External Relations & Sustainability at VELUX

Crucially, the value of this balancing act can also be expressed clearly in terms of economy and welfare on a societal scale.  In Europe alone, it is estimated that companies collectively suffer 923 billion euros in lost worker productivity every year due to poor indoor working environments. For hospitals, optimising the indoor environment can reduce the average time spent in hospitals by 11%. Across 90 million patients annually, that is a societal benefit worth around 42 billion euros. For schools, optimizing the indoor climate heightens student performance, letting them achieve the same learning results two weeks faster per year. 

One instance where VELUX has sought to find a healthy balance is with the project Living Places. With the project, they’ve challenged themselves to build a green model home that is both accessible and sustainable. It arose by looking at the most common Danish home, and asking how materials, construction, utilities, and architecture could be rethought towards building homes with less impact on the planet.

“Could we build, you could say, sort of a prototype house, but where the challenge was you can only use existing materials. So nothing that’s in the R&D pipeline, basically any material that you, me, everybody else can go down and buy today.  So that’s the first thing. Right. Secondly, the house has to be affordable because, of course. It’s super easy to do any types of prototypes if you have an unlimited budget. And then we also challenged ourselves: How much can we drive down the carbon emissions while maintaining great indoor climate?” Fleming Voetmann, Vice President, External Relations & Sustainability at VELUX

It turns out that the answer to that last question is quite a lot. In total, the energy use of the house is 3.8kg CO2 equivalent per square meter per year and that includes the materials that went into the house. To put that number into context, the Danish government requires that all new buildings built from 2023 and onwards mustn’t consume more than 12kg CO2 equivalent per square meter per year. Living Places thus only emits 1/3 of what the Danish government is requiring to reach its 2030 goals of a 70% CO2 reduction.  

Living places will be presented and open for visits for the first time in connection with Copenhagen being the 2023 world capital of architecture. It has been important for VELUX to make Living places replicable. Therefore, they have made the process behind the project accessible online to show how that it is possible to make sustainable design and construction choices.  

“You basically have a decision tree where  all the choices you have to make comes with emissions. And here we’ve been very transparent about the choices and the benefits that they might bring. And we’ve done it sort of open source.  So if anybody would like to copy-paste the house, they can do it. Our goal is to inspire people to to try and do something like that.” Fleming Voetmann, Vice President, External Relations & Sustainability at VELUX

The sharing of Danish experiences is also core to COWI’s work. Karin Pedersen highlights circularity in the building process as one of the areas where international stakeholders can look to Denmark for inspiration:  

“We have come quite far in Denmark in terms of reusing materials, and I think that is one thing we can share with clients from abroad. Today’s waste, so to speak, is tomorrow’s resource. So it’s very important that we look into this issue that that when we take down buildings, we do have a lot of resources in the building and we’re quite good at that. Almost 90% of the materials that we have left when we demolish a building, will be recycled.” Karin Pedersen, Urban Development Director at COWI

One of the concrete strategies currently being pursued in both the Danish private sector and regulation is life cycle assessment of construction projects. A life cycle assessment compiles and evaluates all inputs, outputs and potential environmental impacts of a product or system, for example, a building, throughout its life cycle from the extraction of raw materials to the final disposal. In other words, from “cradle to grave”. 

Together with several partners, COWI has created a tool for this kind of analysis, which lets the Danish construction industry calculate the environmental and economic costs associated with building projects:  

“Our business has developed a unique tool for this purpose. So we can read the consequences of a given solution in terms of the CO2 footprint. Even in the design changes, we can lock it and we have also added the cost to this calculation. So, we can both measure the CO2 footprint or outcome, but also see what does it cost when we do a building.” Karin Pedersen, Urban Development Director at COWI

This kind of work is obviously important in terms of making sure the environmental impacts are calculated and documented to provide a solid basis on which sustainable decisions can be made. But it’s also about establishing common sustainability practices that can become an integrated part of our way of approaching the built environment, as Karin explains:  

“So we very much focus on the circular solution in in using buildings and building parts and the materials in order to optimize, you know the energy efficiency and making long lasting solution as a natural part of our work.” Karin Pedersen, Urban Development Director at COWI

A way forward

It is hopefully clear by now that pursuing energy efficiency in the built environment is an important pathway to sustainable societies.  Energy efficiency lowers CO2 emissions, as well as heating and electricity costs. It also increases the value and lifespan of the building and improves the liveability for residents. These benefits are especially crucial in a time of major uncertainty about the global energy situation as Stine Leth Rasmussen explains:  

“Well, it makes a lot of sense to lower the energy intensity of our economies, obviously in terms of climate and in terms of energy security of supply, but also in terms of public health. It also makes our economies, whether that be the public economy or the household economies, less exposed to energy price shocks. So I think it’s a very wide palette of benefits that we can harvest from working on energy efficiency in buildings.” Stine Leth Rasmussen, Deputy Director General at the Danish Energy Agency

Taking a broader view, pursuing energy efficiency can play a critical role in pushing our common energy systems towards a low-carbon future by reducing energy demand. As matter of fact, it makes very little sense to separate the two:  

“We need to recognize that the energy consumption needs to be viewed together with the energy supply system. We are moving towards an energy system which is increasingly relying on renewable energy, which is also variable energy, which is an energy production that goes up and down with the weather, whether the wind is blowing and the sun is shining. And with large amounts of renewable energy based on wind power and on solar power, we also need the energy consumption to become more variable, to become more flexible. So we need to be even better at moving energy consumption around in time.

I think we need to think of this in terms of a tandem movement. We need to lower energy consumption in order to be able to supply in a green manner. So if we were to keep growing our energy consumption, we wouldn’t be able to cover our energy consumption by renewable energy sources. So I think the shift to renewable energy and the intense work on energy efficiency goes hand in hand.” Stine Leth Rasmussen, Deputy Director General at the Danish Energy Agency

Some might say that if energy efficiency is such an undeniably good idea, it will eventually happen by itself. But as Fleming Voetmann from VELUX points out, realizing the potential of energy efficiency largely relies on our human ability to change our habits. As such, there’s no reason not to proactively push the agenda:  

“That follows the idea that some economists have, since the payback time is very lucrative, then it should happen by itself.  That’s where I think that if you ask a psychologist or a sociologist or an anthropologist, they would argue, that that is not necessarily human nature. Because we also have habits. So, there again, building codes, standards, regulation, and sometimes these voluntary building codes can be very beneficial so that everybody across that value chain focus more on energy efficiency.” Fleming Voetmann, Vice President, External Relations & Sustainability at VELUX

On top of strong regulatory frameworks, the example set by private actors also matters greatly in terms of inspiring global change. Luckily green business also tends to be good business. This is something Karin Pedersen experienced with the launch of COWIs most recent sustainability strategy:  

“In COWI we launched a very ambitious strategy last year that gave us an immediate stop with working with new projects that were involved fossils. So we have abandoned that. And I also think we work very close you know with sustainability because it has become a basic condition in all our solutions, and it’s a demand for our customers. So we have to go that way as well.

I think we push globally, but we have also had very positive response from a lot of our customers, that think it’s very strong that we sort of go this route and go very, very specific to the green transition.” Karin Pedersen, Urban Development Director at COWI

While this intentional, strategic push for energy efficiency in the built environment has a long history of furthering sustainable buildings in Demark, it is not a uniquely Danish experience, as Stine Leth Rasmussen argues:  

“I think that the framework conditions, the regulatory and the economic framework conditions have pushed Danish architects to very much factor in energy concerns in their designs, in the building practices in Denmark. That being said, I don’t think it’s a particularly Danish experience. I think these practices can be copied many places.” Stine Leth Rasmussen, Deputy Director General at the Danish Energy Agency

One thing is certain: in the complex combination of global crisis we are facing, the built environment represents one of the most pressing, but also promising areas of action if we manage to make it a collective priority – both for our own and future generations wellbeing. 

“We have a global population growth. We have changing demographics. We have growing urbanization.  And this all points to a lot of construction work, a lot of new buildings. And within that context, I think architects need to be very aware that the designs that they choose, they will lock in good or bad energy consumption patterns for many years to come.” Stine Leth Rasmussen, Deputy Director General at the Danish Energy Agency

“All of us need to opt for the best solutions all the time.And then you can say we have a little bit our back against the wall. And that means that we also need to get it done ASAP.” Fleming Voetmann, Vice President, External Relations & Sustainability at VELUX

“I am optimistic. But it’s hard work. It’s not an easy walk and we have to bring everybody on board. We can’t do it alone, we have to do it together with everybody in the chain, or when you build a building. So I think I’m positive and I’m hopeful for our children because we have to leave a world for them as well. But we have to do it together. It’s not for individualists, it’s for team players.” Karin Pedersen, Urban Development Director at COWI

A special thanks to Stine Leth Rasmussen from the Danish Energy Agency, Fleming Voetmann from VELUX, and Karin Pedersen from COWI for sharing their insights.