Sustainability does not need to cost the earth
We are in a period of unprecedented social, economic and technological change – both here at home and globally. What does this mean for being ‘green’ or ‘eco-sustainable’ – especially as it is applied to the built environment, which has high environmental impacts – 40% of our CO2 emissions come from our buildings, for example.
Does eco-sustainability have a place in the midst of all these other changes? Should it still be a priority? Or should an emphasis on being ‘green’ be dropped or reduced in the light of these other imperatives?
The global population continues to increase, and we are living in a period of mass migration to cities. Many countries, like Britain, are faced with an aging population - by 2050, half our population will be over the age of 65. Many of these people will be in good health, but many others will have chronic health problems, like dementia, breathing difficulties or diabetes. So how will existing systems like the NHS cope? Moving to a health sector that is focused on keeping people healthy and fit in their homes and communities will become an increasing emphasis; a sea change in our country’s policies and culture.
Austerity and competitiveness
We are also living in a time of austerity here, in parts of Europe and probably soon in the US, while economies elsewhere are growing. How to get austerity right, while at the same time enabling growth and better competitiveness against other countries is a significant challenge.
Fuel poverty and associated impacts on health and wellbeing
Did you know that around 1 in 5 households are now in fuel poverty in Britain – these are households that are spending more than 10% of their total income on energy. Many people living in these fuel poor homes suffer some form of related physical injury or illness. Around £1 billion a year is being spent on providing medical treatment for these people. We at BRE are currently researching the impact that fuel poverty has on mental health and wellbeing and the related costs to society, which are likely to be higher than the physiological costs. So as energy prices rise, there is a growing societal and economic need to make fuel poor homes more energy efficient – to take their occupants out of fuel poverty. For many people, the rising cost of energy is hitting disposable incomes, which in turn decreases the spending power of the economic engine driving our economy. Clearly the ‘green’ agenda and doing something significant to reduce the energy demands of buildings can do more than save carbon.
Sustainability – added cost?
But the trouble with all the ‘green’ issues is that they cost more money, get in the way, require bureaucratic regulation, don’t they? Or isn’t being ‘green’ all about new technologies and added costs? It is true that green technologies have a cost but ultimately, and with the right approach, going green is synonymous with best business practice, successful outcomes for all and profit. Let’s consider some examples that provide food for thought.
I was seconded to the Olympic Delivery Authority for 6 years, working on construction for the London 2012 Games between 2006 and 2012. We adopted a balanced scorecard approach for the delivery of the Olympic build programme. Key issues on the scorecard included: health and safety (our number one priority); delivering on time; delivering on or under budget; meeting our sustainability targets; and being a great employer. These priorities were reflected in how we designed, procured and delivered the project. They had a positive impact on our culture and approach and permeated all those who worked on the project. Rather than prescribing solutions, we were all encouraged to think innovatively about how to meet the disparate objectives and challenges we faced.
We invited prospective suppliers to innovate to come up with the best solutions and we procured against this balanced scorecard. ‘Green’ approaches, such as minimising resource use and waste, optimising efficiencies, reducing embodied environmental impacts, and responsible sourcing were embraced and they led in several instances to reduced first costs, improved process and safety, delivery of what was promised, saving money overall, and meeting sustainability standards. This approach helped British companies to up their game, to innovate and be better than international competition (full reports on this can be found on the London 2012 learning legacy website).
AIMC4 – ‘greener’ homes
The government and industry funded housing research initiative AIMC4 is a great example of an innovation project based on sustainability that is helping our country to deliver against its own priorities and also to improve our edge for export.
The objective of the project was to build ‘greener’ homes at the same or lower cost than less energy efficient homes using the government’s Code for Sustainable Homes. The Code brings together the range of disparate but related factors required in a ‘green’ home; factors such as energy efficiency, waste, biodiversity, materials and water, for example. Importantly, it does not prescribe what to do, or what to use, but it does provide a consistent methodology by which different approaches can be compared. It is the system by which to innovate.
In AIMC4 the focus has been on how to build sustainability into the fabric of the building. Project partners Technology Strategy Board, Barratt Homes, Crest Nicholson, Stewart Milne and BRE adopted a new culture with their supply chain, inviting solutions rather than buying only on first costs. The new solutions were trialled on a number of homes, and successes and failures carefully measured and rectified. The outcomes are better quality, more efficient, durable homes with appreciably lower energy bills and potentially lower mortgage rates because lenders’ risks are reduced. The homes are over 50% more energy efficient, without adding cost when delivered at volume around the country. They have been achieved by smart regulation, the right culture, and a collaborative approach. The initiative has helped to make British companies world class. Just like the Olympics
There is a clear imperative to deliver better economic and societal outcomes by being ‘green’.
‘Green’ schools have been required as part of the Department for Education’s new school building programme for a number of years. These schools require significantly higher performance levels to achieve more environmentally sustainable performance. A similar approach to the ODA and AIMC4 methodology has been applied, this time using a system called BREEAM, which again brings together the ‘green’ factors that are key to innovation. The outcome? ‘Green’ schools are being built with almost no added cost above ‘normal’ schools, but with operating energy costs some 20% to 30% lower, meaning more money to spend on learning outcomes. Once again, better economic and societal outcomes are achieved by being more environmentally sustainable.
Real estate owners
Large corporate names are getting in on the ‘green’ agenda too – not just because it is the ‘right’ thing to do, but because it’s good for the brand, for customers and because it is increasingly having an impact on balance sheet value, P&L and share value. Recent studies have shown that ‘greener’ real estate can achieve higher sale and rental values, and is easier to let. If you are a corporate with large real estate holdings, even a modest uplift on asset value can be significant for the balance sheet. And if energy costs are reduced, then there is a saving on P&L too. And this is before you take into account the benefits that occur in reporting on corporate social responsibility. A number of large European real estate owners have formed the International Sustainability Alliance to benchmark, share problems and practices to become greener. Again, this is an economically driven ‘green’ programme.
The British companies involved in these initiatives are positioning themselves strongly against international competition and are consequently better placed to compete in export markets. They exemplify the ‘green growth’ that is now essential to our national economic wellbeing.
The smart thinking on sustainability is that economic and societal drivers are as important as environmental ones. The ‘eco’ in sustainability is actually becoming closer to meaning ‘economic’ as the main driver, rather than ‘ecological’. This is an important step forward.
The new question we need to ask ourselves is, do we understand this approach and are we taking actions in what we do, to achieve the triple bottom line benefits that arise from being more sustainable? And does our government? Is the smart, systems based regulation in place or being prepared?
Time will tell.