Facilities Turn to Asset Lifecycle Management and Capital Planning as Renovations Stall
Key Highlights
- AI-based optimization can reduce building energy consumption by up to 30% through real-time demand alignment.
- Most organizations now incorporate sustainability metrics into asset management, improving cost control and asset lifespan predictions.
- Slow deployment of smart infrastructure and investment shortfalls are major barriers to meeting 2030 climate targets.
- Digital retrofits and smart controls enable measurable savings without costly construction projects.
- Enhanced data collection and analysis are driving more informed capital planning and risk mitigation in building operations.
AI in buildings is accelerating as facility leaders push sustainability and capital planning forward, even as renovation rates lag and emissions targets tighten. According to a 2025 analysis from the European Climate Neutrality Observatory (ECNO), annual building-sector carbon cuts must double by 2030, with renovations near 1% of stock each year and deep retrofits at 0.2–0.3%.
ECNO attributes slow progress to stalled upgrades and flat momentum on key measures. Exergio, which develops AI-based optimization for commercial properties, says “digital retrofits” can reduce consumption by up to 30% by aligning heating and cooling with real-time demand and schedules. According to Exergio, software-based controls using smart meters and occupancy data can deliver measurable savings without construction-heavy projects.
“Deep renovations cover less than 1% of the building stock each year, which I hardly can call progress. Even light measures like replacing windows or swapping boilers have slowed. Despite that, the world still overlooks digital retrofits. With AI optimization, buildings could already cut emissions by up to 30% without waiting for construction work,” said Donatas Karčiauskas, CEO of Exergio.
The ECNO report cites flat progress on electrification and a shortfall in heat-pump investment relative to 2030 targets. It also notes that enabling infrastructure such as smart meters and optimization tools has been deployed too slowly to support scale. ECNO estimates a significant climate-investment gap in 2023 that is reflected in slower upgrades and clean-energy adoption.
Facilities Teams Expand AI for Maintenance and Operations
Brightly Software’s 2026 Asset Lifecycle Report finds that 66% of organizations have implemented AI in asset management, with most respondents citing benefits in cost control and asset life. Preventive maintenance remains a priority, with a large majority using systems to schedule tasks and avoid downtime, while readiness for predictive approaches is more mixed.
Brian Bell, head of strategy at Brightly Software, said:
“The increase in AI usage compared to the previous report highlights that technology has become a pervasive and practical part of asset management practices. As customers continue to tap into AI to extend the life of their most critical assets, strong, integrated data is necessary to make asset lifecycle decisions that build resilience and optimize resources.”
The Brightly study reports increased integration of environmental considerations into asset lifecycle management. Respondents say sustainability is a key component of asset decisions, supported by energy management software that tracks usage and uncovers savings opportunities.
For example, since 2005, the Davis School District (DSD) has grown by 40% and 3.5 million square feet, “yet our energy consumption is down 17% ... we’ve saved hundreds of thousands of dollars by being able to pinpoint billing errors,” said the director of energy services at DSD. "Our energy management software makes it so easy to keep track of everything and see percentages and comparisons over time and across buildings.”
Likewise, Brightly recently helped McLaren Health increase annual facilities funding through effective capital planning. "Now that we have data and proof of what we need, people trust our data, give us the funding we need, and allow us to do what we need for capital improvements,” said the organization’s corporate director, facilities and energy.
Asset investment planning is connecting facilities and finance. Most organizations maintain three- to five-year plans, use asset health and lifespans to adjust budgets, and report improved ability to anticipate major replacements and failures with asset-management systems.
Bottom Line for Building Performance
Together, the ECNO findings and Brightly’s survey point to software-enabled efficiency and data-informed capital planning as near-term levers for performance and risk reduction. According to ECNO and Exergio, scaling smart meters, sensors, and optimization tools can accelerate emissions cuts and strengthen electrification outcomes, while Brightly’s respondents show AI and multi-year planning moving into standard practice.
*This content was produced with the assistance of AI.