We rejoice in the fact that, after 35 years of telling companies to build sustainably, it is finally becoming trendy (and legally necessary) for them to do so
Suddenly, sustainability Is sexy.
I’ve been trying to sell it for 35 years. I’m supposedly a good salesman, but nobody wanted to know. Now a combination of legislation, shifting political priorities and a growing recognition of the value of corporate social responsibility mean that the hour of opportunity is at hand. People are realising that sustainability can deliver profit, value for money and kudos all at once.
So why has a subject that businesses previously only associated with tree hugging, great crested newts and Swampy suddenly become so fashionable and commercial?
Well, first there’s the political dimension. The Kyoto targets on reductions in carbon dioxide emissions provide real measures for nations not only to improve their performance, but also to demonstrate political will – even with the USA ducking its obligations to the world. Certainly Blair and Brown, our own Batman and Robin, are onside. Couple this with the key international positions our prime minister will hold this year, and the political driver is clear.
Second, businesses are now embracing corporate social responsibility. As the chairman of the Birmingham Foundation, a charity that supports local regeneration, I can tell you that the shift has been pronounced. No longer is it about some cheap publicity and a vague feelgood factor.
Developers have long been seen as late adopters, but Land Securities was the first property company to join FTSE4Good index and
it and Hammerson have published social reponsibility and environmental reports. Now customers and investors rate social responsibility as a good reason to invest, and regulations coming in this year will give it a direct impact on the bottom line.
Which brings us to the legislative framework. The European commission’s Energy Performance of Buildings Directive will be enforced through Part L of the Building Regulations by early next year. Buildings will have to be energy-certified and all boilers and air-conditioning systems will be subject to mandatory inspections. Also a draft of the Code for Sustainable Buildings will be published shortly, to take effect early in 2006. Initially, it won’t be mandatory, but it is likely to require improvements of 25% in energy efficiency and water consumption for new buildings.
So why did it take governments and stakeholder pressure to get us to do what was right? Possibly because all of us were too exhausted from endlessly fighting the traditional construction fight to drag the capital project over the line, regardless of life-cycle and sustainability issues.
For most clients, property occupation is the second biggest cost item (after people) and property owners, users and facility managers have to know how much their buildings really cost. So they, too, can gain a competitive edge by obtaining sustainably lower occupation costs.
Why has a subject that businesses previously only associated with great crested newts and Swampy the roads protester become so fashionable?
The powerful trader developers have until now had little incentive to embrace sustainability as the institutional buyers were not prepared to pay a premium for it. But at last the banks and institutions are recognising that lower whole-life costs can justify a higher purchase price.
And who can argue against the sense of “meeting the need of the present generation without compromising the ability of future generations to meet their own needs” – as the World Commission on Environment and Development defined sustainability?
I’ve heard some argue that compliance with the new Part L will be impossible, as it will require all members of the design team to have an input right from the feasibility stage.
Therein lies the problem, the solution – and the reason I couldn’t sell the concept 35 years ago. Traditionally, construction design teams have not communicated well with users and occupiers. The days of separate capital budgets, owned by the design team, and a revenue budget owned by the facilities management department are numbered.
The benefits of early collaboration during feasibility was vindicated with the Royal Ordnance Defence division of BAE Systems, who saved an estimated £5m over 25 years on a single new-build project – simply for the cost of a £7000 study and a £20,000 one-off investment.
So, return with me to the 1960s and picture my struggle to convince the market to accept the wisdom of a building that would be cheaper to run over 50 years – when everyone was expending -their energy on meeting increasingly challenging capital budgets.
Thank goodness today’s much better-informed industry and its financial partners are recognising that value goes way beyond the cost of the capital project. And not before time …
David Bucknall is chairman of Bucknall Austin