How do 'zombie buildings' impact EHS compliance?
Even empty buildings are full of EHS compliance requirements – careful to not let them sneak up on you.
Remote and hybrid working has resulted in many offices becoming unoccupied or underused ‘zombie buildings’. But how has this impacted physical workspaces, and do businesses still have a responsibility to maintain EHS compliance even for buildings they’re not using?
‘Zombie buildings’ may sound like something out of a horror movie, but the reality is much more prosaic. The COVID-19 pandemic meant that many companies have permanently moved to hybrid working models. They now have less need for office space, meaning that whole buildings may be standing empty—so-called ‘zombie buildings’. However, environmental health and safety (EHS) obligations don’t stop when buildings are empty. Fortunately, the costs and implications of running these buildings have resulted in new and better building management practices being identified. These may even reduce the environmental impact of office buildings around the world.
Zombie buildings: the impact of hybrid working
Figures from Eurostat showed that around 5% of the workforce regularly worked from home from 2010 to 2020. By 2021 that had risen to an average of just under 15% in Europe—and that average masked some much larger figures, such as over 40% in Stockholm. This has led to some big changes in the use of office buildings. Some employers have found that they need far less office space than pre-pandemic.
Work from Boston Consulting Group found that building vacancy rates have increased from 12% to 17%, and building utilization has fallen from 72% to 40%. Buildings with a utilization of less than 50% are considered to be ‘zombie buildings’. These headline figures again mask some much larger changes, especially in cities where a lot of work can be done remotely. This applies particularly to cities dependent on the tech industry, such as San Francisco.
There are, of course, huge issues here for landlords and investors about how to manage the decline in demand for city center offices. However, there are also issues for organizations that lease unused and underused buildings. It turns out that responsibilities don’t simply stop when the doors close.
The costs of zombie buildings
Research has suggested that in May 2020, during the first peak of the COVID-19 pandemic, US office building energy consumption dropped by 25% because employees moved to working from home or hybrid working, and companies closed buildings. Office equipment and lighting was put into ‘standby’ mode, but this decrease wasn’t maintained over time even though many people continued to work from home. The costs gradually crept back up over the next six months, until by the fall they were at nearly 90% of pre-pandemic levels.
In other words, these zombie buildings are standing empty—or nearly empty—but still represent a major cost to the organizations leasing them. This is because leases often specify a level of service delivery, which may include maintaining the building at a certain temperature between certain hours or having the lights on for specific periods. This can only be addressed by close cooperation between tenants, landlords and management companies to develop new agreements for service levels.
Owners and tenants also have responsibilities for empty buildings, some of which may have costs and even major consequences if not maintained:
The lights are on but nobody’s home
Some buildings systems are not really meant to be turned off. Buildings are generally not designed to stand empty. Empty buildings are more likely to have problems with damp, rodents and other pests. In extreme cases, mold and damp may render a building uninhabitable and unusable, with the remediation costs running to thousands. This adds to the pressure on landlords to keep building systems running—and on tenants to pay for that.
If a building burns down and no-one is there to see it…
Building owners have a general duty to ensure no fire risk, like storing flammable materials in a vacant building, and to secure the property to avoid unauthorized entrance. A lack of occupants can also be a fire safety risk because there is nobody to spot issues such as worn wires or loose electrical sockets and report them to facilities managers. A building or premises owner should regularly inspect the fire safety installation, like fire alarms, extinguishers, and fire sprinkler systems, to ensure they are in good condition and function normally, even if the building isn’t occupied.
A double whammy for hybrid working organizations
It is of course important to add that employers’ responsibilities for health and safety do not stop when staff work from home. Employers still must ensure that employees’ health and safety is protected when they are at home—and that means both mental and physical health. This may be as small as providing headsets and monitors to improve computer use, right up to mental health support to avoid problems from isolation. In South Korea, employers may even be held accountable for injury caused by overwork or stress in the workplace, and that includes at home.
It may also be harder to manage emergency preparedness in the workplace when all staff are not routinely present. Ensuring that everyone has been involved in fire drills is more difficult. It can be a challenge to ensure that a trained fire warden is present in each area every day. There is therefore a ‘double whammy’ from the rise in hybrid working, with ongoing costs of managing and maintaining zombie buildings or other office space, increased emergency preparedness costs, and additional costs from providing equipment, support and advice to remote workers.
How zombie buildings are showing the way to better buildings management
The situation is not all ‘doom and gloom’, however. In many places, tenants, landlords and building management companies are working together to agree contract adjustments for services and improved building management arrangements. It is, for example, possible to use sensors to track when and where energy is needed. Building-wide management systems can be flexible enough to provide cooling only where it is required. This is already reducing the overall demand for energy—and may even show the way to better building management practices in the future.
It’s inevitable that EHS regulations largely focus on situations where people are present, rather than absent. However, the rise of zombie buildings shows that organizations that lease or own office buildings cannot afford to ignore empty or underutilized buildings. Instead, they need to find a way to manage them appropriately to reduce their environmental impact and financial cost.