Velkommen til Lørn.Tech - en læringsdugnad om teknologi og samfunn. Med Silvija Seres og venner.

Silvija Seres: Hi. Welcome to Lørn Oslo Innovation Week. My name is Silvija Seres and my guest today is Renate Straume from Varig. The CEO actually. Welcome

Renate Straume: Thank you very much, Silvija. It's nice to be here.

Silvija: It's nice to see you again. We had a chat some years ago when you were telling me that you have this idea on how to align the construction business better towards the future. And now, we are talking about the project itself. I'm just going to say a few words about the series that this conversation belongs to so people know what they're listening to and then we'll move on. So Lørn is making a series of five digital chats with some of the most interesting people who will be participating in the Oslo Innovation Week. And we believe that if people listen to these warm up conversations and think that they would like to know more, it would be a really wise step to sign up for Oslo Innovation Week digitally and listen to you at the event itself. And with that, Renate, I'm hoping that you can introduce yourself and tell us what drives you, but also tell us about Varig.

Renate: Sure. Thank you very much. So well, my name is Renata and I started Varig about two and a half years ago. Well, actually a little more than two and a half years ago now. And I have my background from the building and construction industries where I've sort of been a part of most sides of the table, I guess is one way to put it. I worked for a company that builds buildings. I worked as a consultant engineer, sat in the management. And the reason for Varig is that you see all these evolving technologies, and it was very obvious that this industry as a whole had much to gain from using these new technologies that may not be not so new at the core, but the way people are using them. Also the access to data is new and in the world we're living in right now. I mean, the most obvious first priority is to find better solutions for following up on how we become more sustainable. So that's really at the core of Varig. We have that one liner where we call ourselves the sustainability software for commercial real estate. Well, that's what we are. We're a software solution that tries to make it super easy for owners and users of buildings to become more sustainable.

Silvija: So does it mean that you help them measure? Because I wholeheartedly support this movement from greenwashing and green talking to actually green action. So I guess a part of that must be knowing what's the most relevant action, what's the positive and negative effect of the changes that we make, etc... So, how do you make it happen?

Renate: Well, I mean, we try to make it a bit of a drag. So there are a few tasks that I think people really shouldn't do. So punching data is one of them. It's completely useless, and we're bad at it. It's boring. And it uses none of our superpowers as people where you think outside the box as part of your everyday existence. Technology is super, super, super good at punching in the right number every single time and thinking inside the box every single time. So one of the things we do is we collect data automatically. Some of the data we collect semi automatically and the data points that are one offs that are unique, which there are some of, but luckily they don't change that often we still input manually, but that's still scalable in this industry. So it's maybe the collecting of the data sets that exist digitally and feeding more information into this digital sustainability model for each building and then portfolios. So at the bottom we have data, but at the top you need to understand what you're looking at. So at the top we focus on incredibly easy to use user experiences. So it's that you need both. You can't just present data in an Excel sheet anymore.

Renate: I mean, you can. And we're an industry that loves Excel. I love Excel, but if you want something easy to use that everyone can access and this is super important that everyone you need to make it understandable, you need to make it accessible. You need something that everyone can use without having any training. So you can just give them an access and then they can just go in. And through having a good user experience design, you can just start using it. So that's more or less at the core. And the point of it all is so that you can make better decisions for your building, for your portfolio, and you can involve your tenants. The people that are using the building get this information as well. I mean, we have an add-on for that, but we bring it out into the building so they don't have to access it unless they are really interested. So it's about sort of that building, that meaningfulness, engagement, transparency on top of a really good data set because, it's a bit of a cliche, but what you measure gets done and gets better. It's still true. So yeah, it's building that level.

Silvija: So several things are working in your direction here. One is that automation of data collection is increasingly easy through the Internet of Things and sensors and all the new tools for both construction, but also for maintenance, I guess. And things like digital twins are not just the hype. They both work and have good ways of communicating the value that they create. And then I hear you talk also about very good visualization, good interfaces. And I think this is central because unless people can figure out a system like this without having to read the huge manual. They are not going to get started with sustainability properly.

Renate: No. And for sustainability to work, you need to involve the people that aren't really building specialists. You need the CFO in your team, and especially in these days with the EU taxonomy making its very visible and felt arrival, it has such an impact it's just mind blowing. Almost overnight, it changed the scope of what is sustainable within doing environmentally impactful actions. It's just amazing.

Silvija: So the EU taxonomy, is this the 17 SDGs or what do you think?

Renate: The EU taxonomy is a new almost, I say financial reporting scheme for and it's a rule set so that people that spend money on green, let's use the term green widely here, they now have a rule set made by the EU for several different industries where the building and construction industries is one of them. And it literally outlines if the company that you are investing in can say check on these points, then it's green. So it literally is a rule set to take away the greenwashing at its core almost.

Silvija: I have to follow up on this one because on one hand, I think it's excellent because we stop having these philosophical debates about what matters and what can be measured, and we just start measuring. On the other hand, I think it can also be a bit of a kind of box checking operation.

Silvija: I think we need both. I think we need these very concrete taxonomies and rules and definitions. But I also think we need to keep communicating to people why we are doing this and what's the big goal, etc.. I was recently signing up or putting in for an event and I had to cross off their sustainability requirements form and you know, questions like, will you be serving tap water or bottled water? And will you be having plastic or bamboo spoons? Will your people be travelling by public transport or driving their car? I was thinking, I don't know. I mean, to me sustainability is about quite a lot of quite bigger things and I think we can kind of get lost in this plastic spoon discussion sometimes.

Renate: Yeah, I don't necessarily agree with everything in the taxonomy, but I'd give them credit for this. They're focusing on the big drivers. They've done their homework on this one. There's a huge tag report, which is a technical, technological sort of specialist report where they've done this analysis. I read some of it, but not all of it. And the way they prioritized is they started with the main environmental impacts and then they focused on those and then they had a look at it and said, how can we turn on the money? Because when you make it profitable, it's a lot easier to make it happen. And they've kind of succeeded on that endeavor because let's use a very concrete example in the building industries. A lot of companies out there, not banks as well, but a lot of private investment companies, they now have a rule set. Earlier it was more what screen are we going to do this? And now we have a very clear rule set. They can also get better terms by doing it this way. And it's well founded in research. And they can now say, okay, either you're inside this box of your taxonomy or we won't spend money on your building. So if you want us to invest in this fund where you have these types of buildings, we only want to invest in green.

Renate: Now that means that for a building to keep its value, it needs to become closer to this ruleset set by the EU. And for example, if you're an owner of buildings, one of the things they've said is that you need an energy label. There are other ways of doing it, but that's one of the ways. One of the ways we can actually kind of tackle in a way. In Norway, of all the buildings that have an energy label, only about two and a half percent are energy label A. So not that many. The bar is high and it means that if you have an energy label A building, the value of that building will keep better. You're more likely to have tenants that are willing to pay you better, and you will definitely, absolutely get much better terms if you're loaning money, if you have bonds, stuff like that. And as there's not going to be enough taxonomy compliant buildings out there. So if you're a company that's on top of this and you take as much of your building and make them taxonomy compliant. Your value as a company will increase, the value of that portfolio will increase and your expenses will lower. So they made it profitable to be sustainable. Right. You don't actually need an action to pay itself back, ever. You can still do it and it'll be profitable.

Silvija: I think this is a really interesting case of making it a hygiene factor. Yes, you can talk about it being nice to have and important to be green and so on. But it's when it becomes an unavoidable alternative, when it becomes, as you say, the requirement for the money to flow in at all, then people stop debating and start doing, I guess.

Renate: Yeah. And also we're just seeing the first two steps. I think the coming steps are much more interesting than the current step because at least for the building and construction industries, the current step is very much focused on risk reduction and energy consumption. And then you have a few very concrete actions that are well described that goes into where the energy comes from? But the coming focus on the circular economy, how can you be taxonomy compliant within the circular economy? And I have not read it yet and because I haven't been able to find it, I'm so looking forward to reading it. I think it will be a very interesting read. And I mean, they're moving super fast, so I have a feeling it's going to come our way already next year. They went from putting it out. They're getting 40,000 plus feedback and still they went ahead and made it a rule set already in April this year.

Silvija: So I think this is regulation that drives innovation. And I'm really impressed. And then I want to ask you about the Norwegian opportunity in all of this. And I want to start with this story. So. And this is motivated basically by me wondering whether all the countries across the EU will actually actively follow up on this, and it has to do with financial ability to do so. We see buildings in India collapsing and we see so there are parts of the world where it's still more important to just survive today and then worry about sustainability tomorrow rather than so it's being able to afford to think long term. And how do we make sure that everybody will be able to participate in this revolution? And I'm thinking of the car industry about 50 years ago, and it was a new set of security and safety, and basically cleanliness. So requirements that came up, quality requirements. And the American car lobby said to their politicians that we can't do this because if we implement all of this, we will become very uncompetitive. The interesting thing is that the Japanese car lobby said exactly the opposite thing to their regulators. So they said, we like this. We believe that we are uniquely suited to develop and deliver on these new much harder quality requirements. So feel free to increase the bar even further. And the really interesting outcome of the story is that some 20 years later it was quite obvious that the Japanese carmakers outcompeted the American carmakers. So these new hard requirements are actually driving development very constructively, I think. And they are moving us away from talking about the climate to actually doing something for the climate. And I'm just wondering, how do we make sure that everybody can participate or what are your thoughts on making it global and universal?

Renate: Good question. I think your analogy is very apt when it comes to the EU taking the lead on regulation, let's say within the climate, let's call it sphere. How, how do we make sure that it's not a completely European thing? This doesn't really touch upon the do you choose to eat or to build sustainably. I mean that one I don't have a clear cut answer for. And I think it's a really hard one to crack. But what I will say is these rule sets. It's not necessarily the governments that are going to push this forward. I think there are enough companies out there that have been very vocal about the fact that we only invest in green. Well, now there's a rule set where they don't have to make up their own stuff. They can just say, we're going to invest in Canada in these buildings. But I don't mean, yeah, fine. You can either use this certification scheme or if you can prove that your taxonomy is compliant, that's also okay. So I think that because when they invest in buildings and in other industries in Europe, they now have a very clear cut rule set that yes, fine, it's regulation within Europe, but it still works and the rest of the world. I said this to an Australian, it was more of a climate startup environment, and I said, I think they're just going to use this and transpose it to every investment they make and say, okay, fine, if you're compliant with this, you're good. If you can say that you're nearly compliant, fine, we'll consider it. So I think that this rule set will be so applicable to green investments that it's going to be used outside of Europe. So I think the fact that Europe is moving in front of everyone else is also good for everyone else. Doesn't actually matter. If it's a rule set that works in Japan, it's still applicable because you can measure it. 

Silvija: Yeah, I agree with you. And I think one of the advantages that you could be using, and I'm really hoping that they will, is being able to really use the one market dynamics. So Oslo municipality has really interesting tactics in their purchasing that I learned about recently, and I'm hoping it's correct. They say that when they have at least three suppliers that in their proposal they will deliver some sort of a climate or sustainability relevant solution. Let's say that the transportation vehicles that they are purchasing are carbon neutral, that they make it a hygiene requirement. It's not a requirement that you get rewarded with points for in the competition. It becomes a requirement that everybody has to deliver on or or you're not in the competition. And I'm wondering if we opened up across Europe for companies to compete with these drivers as hygiene requirements and may the most sustainable ones win, maybe Norway might even have some advantages there, given our hard won experiences in creating construction. You say that not all of our buildings are so amazing.

Renate: But they're good buildings, don't get me wrong. And they are. We've been very sort of early adopters of, for example, different certification schemes and certification schemes pave the road. And so when you have you have really good buildings. One aspect that is quite tricky to handle here is that not all of this is aligned between the countries. So the benchmark in Norway is much higher than the benchmark in some other European countries. They're not the same. And that's something that I know that, for example, Green Building Association and Canada is working on and pushing forward so that the rule sets align. But I'm kind of at the stage where okay, but just get started. I mean if you're talking about long term industries, the building industry is the definition of long term. Your building is going to be there for hopefully 60 to 100 years, at least. And if you're going to own it for a substantial amount of that time, you might as well get started right now on how you can make it as sustainable as possible, because you will be very interesting to these international investors because they know also that when we document it's solid. It's at least when we say it's automated data capture, it is automated data capture and we have Lab. Lab is fairly unique to Norway and Denmark, I believe, and it's a centralized hub for collecting electricity consumption. And it's the same place that we get your data from that gives you your bill. It's still your data and you have to permit us to access it. But it gives us these opportunities where we can access huge datasets fairly easily with amazing quality.

Renate: And that's kind of a good thing for us to grow up in Norway, because we can bring our technology to a certain level of maturity before we expand, and we can get that maturity fairly fast because we don't have to make 100 connections, we can make one, and then we have access to the data. And then we can look at the data and treat the data and do exciting things with the data. And that's what I think it gives us. Even in this world with regulatory push and in this world where the buildings in Norway are quite good, it's also the fact that they're willing to listen. They're willing to try. It's kind of a good place to be young in some ways. In other ways, there are some challenges with that because there were no big uniform sort of very narrow market niches there. They're just not that big. Like in America, you can survive alone for a long time by selling to office buildings larger than the thousand square meters with only those offices built. You can't survive on those buildings alone in Norway. So you have to broaden out. You have to grow up faster. But it also means you're scalable faster. So, I mean, that's where we are at now. We're expanding into Sweden. Just double checking that. Okay, it's fairly similar to Norway, but there are some differences and I'm really looking forward to sort of starting to explore Germany and the U.K. But let's see what they say. We've started talking to them.

Silvija: Very cool. Listen,  we talked a lot about the big picture and the regulatory drives behind the solutions for climate. But if we now change perspective and put ourselves in the shoes of an owner of a medium sized company, be it construction or something else infrastructure, logistics, transportation, or even the service company that also needs to think about sustainability. What's your advice? How do they get started and how do they at least realize that even though they won't get to their final target in one year, that they're moving in the right direction?

Renate: Well, I talked to a few people that are in those shoes lately, and I think some of the things they did are actually very clever. They focused on their big drivers. So if you're a transportation company, start with your trucks. So say what's your big impact? So maybe start there. That's maybe number one and it's the obvious one. But if you don't, I mean, let's say you're a consultancy or you're a company that doesn't really have that big an impact in your main revenue generating business. I've said this a few times and I still believe it to this day. I come back to the buildings being a very hands-on opportunity. You can do something that doesn't necessarily require you to make cultural changes with all your people. You can put in an extra fraction in your waste sorting. You can ask how we can make sure that we use this building in the most sustainable way? Make sure that if you're going to have to work over Christmas, please all work on the second floor. I know that's not your normal office space, but then we can shut down the rest of the building and save so much CO2 because we can reduce the power consumption. The cleaning people don't need to clean those floors every day. We can save on consumption of cleaning products. We can make sure that when the hours that they use are also reduced, it's cost effective as well. But most think if you're going to be working over Christmas, it's a bit of a hassle to have to change your seat. So cost alone. It ain't enough. But you're more willing to do it if it's because it's actually measurably good for the environment as well. And it's actually a bit of a wasteful thing not to explore that very concrete action that you can take. And it really is measurable. 

Silvija: So focus on the actionable, the measurable and the the material. So just don't not focus on it.

Renate: Maybe. I don't know. It's fast to become a bit fluffy sometimes so just take it down to something you can do. And then even if it's not maybe the smartest thing, at least you've done something and you discovered the smartest thing and you can do that as well. You don't have to do the right thing the first time, you're allowed to do more. 

Silvija: And I also think that this is, as you say, it's a marathon, not a sprint. So this is a learning path that we are all on. And nobody's expected to get it right the first year and the first time. 

Renate: I was just about to say in this sense, it is actually relevant. We did a some research where we went out and we had some hypotheses that we wanted to explore, but we also went out broader to see if we missed something. And some of the people that we talked to were tenants of the buildings and we were like, Oh, what's hard about sustainability and blah blah, blah, blah, blah? And they were like, okay, well in our everyday life we're at work to make sure that the office is a good place to work. It was one person's task the other person had. She answered phones from people that had complaints. And literally her focus is to answer those things, not focus on how she can be as sustainable as possible in their everyday life. But we figured out that if we can make it so little that it's still something that, oh yeah, I can do that. And if we make it understandable why they need to do it, then they're like, okay, then I feel bad if I don't do it. So yeah, okay, cool. But you have to make it so that you can read it in like 10 seconds.

Renate: So it's not something that eats away at the organization's capacity to change. It's so little, and it's on each and every one of us. We actually did an experiment where we put up a screen in a building to check - does it work? Actually, just share it on a screen. And we sent out a message. We said, this is how it is in this building. This is what it means and this is what you can do about it. And it was amazingly impactful because then it's you as an individual, it's in your power to make a small change in your daily habits. And they do it. They want to do it. We have to make it a little bit interesting as one of the girls said, “you have to make it a little bit weird and wonderful.” So that's what we did. And it reduced food waste by nearly 50% in two weeks. And it had a measurable impact and it was amazing. Yeah, it's fun. .

Silvija: We are then wonderful. I think one other point that I also heard you say before is that it’s the way that we think about budgets and costs needs to be more long term. So in software, we talk about the total cost of ownership, not just what it costs you to implement, but what it will cost you to maintain, to redevelop, to adjust, etc.. And I think the same thing happens with every building, with every truck, with every everything that we own. And it all has a kind of total cost of climate as well or total cost of sustainability. Think about the initial phase, but also think about the whole lifetime of the thing.

Renate: I completely agree and this is where CO2 equivalence is so useful as a climate currency almost. It's not a perfect currency and it has its weak spots and all of that. But, as a way of comparing electricity to waste we've not found another way of making those two things, apples and apples. So if you do convert everything into CO2 equivalents, you can really get an overview of how you are doing? And you can also, if we include materials, not just the dynamic, running exhaust or consumption or whichever way you want to look at it. This is universal if you also include the actual making of the thing itself, whether it's a car or a building or a computer, then you get the overview, then you get the total picture. And that total picture doesn't necessarily have to be like 110% correct. Just needs to be correct enough for you to make a decision based on and I think that's where we're at at the moment. Just be willing to use something that's correct enough to move you forward, because the more we use these data sets, the more accurate they will become. And that's the same thing with CO2 equivalence. There's a lot of stuff happening there now. There's a lot of research going on and the quality of it as a currency is slowly but surely improving. And the more we use it, the better it will become. So it's a really, really useful currency. If you could just think of it as that and not necessarily a oh, I don't believe in climate change. CO2 was high when the dinosaurs lived and it's like, yeah, I know lots of volcanoes and the dinosaurs died, so. But if you just think of it as a currency, then you're past that discussion.

Silvija: What do you think is the most important thing that we talked about?

Renate: I think it's a bit of a cliche, but don't wait. Just do something. I mean, it's not that hard. You don't even have to do the right thing. Just do something. And I've learned. Yeah. And learn. Yeah. And learn. Don't become overwhelmed by the complexity of it. Because it is overwhelmingly complex once you start digging. And no one, and I say this with a certain amount of surety, no one has the complete picture that I can promise you. So just start. And then if you realize that, oh, now I learned something new, maybe she did this instead and say, okay, fine, great, we learned something. Let's do this instead. I'd also give a small sort of heads up if you're in a managerial position, warn your organisation that this is a starting point. We are probably going to learn things as we move along that will change our direction and that's okay. We don't need to be 100% right. We just need to do something. And it's that building, lowering the expectations and prepping them for the fact that it's probably going to change. At least that's what we do, because we're in constant change when you're making new tech and you learn things all the time. And it's really painful. When I've gone out and I've been so sure that something was like, Oh, it's this way. And you learn that it's not exactly that way. I got that wrong and it's kind of painful. But you live and learn. 

Silvija: Lifelong learning. That's our tagline as well. Live and learn. And I also think I can talk to people and find out what worked for them. And that's also part of the basic philosophy of Lørn. So Renata, thank you so much for this inspiring and educational chat.

Renate: Likewise. It's fun. Thank you very much.

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