The property sector is finding that sustainability matters, according to a Birmingham legal expert.
And Graeme Bradley, head of DLA Piper’s Engineering & Construction business group in the UK, says companies now realise it can represent a saving rather than a cost.
“Despite the downturn, sustainability is very real to the property and construction industries, and has become a more significant issue over the past 12 months,” Mr Bradley, a partner in the law firm’s Birmingham office, said.
“As we move into a new decade, sustainability programmes will become increasingly important in all the construction and engineering industry sectors. It will become the norm for environmental protection measures to be integrated into the management systems of organisations.”
Such measures would include the reduction of greenhouse gas emissions, and mitigation of, and adaptation to, the effects of climate change. Inevitably in such sectors as the power sector there is a real challenge where innovation is bound to be rewarded.
Mr Bradley predicted the UN Climate Change Conference, which takes place in December in Copenhagen, would further develop international binding agreements for the reduction of carbon dioxide and other harmful gases. Governments were expected to agree measures which each nation would have to implement across industry sectors and businesses.
He went on: “For the property sector sustainability means focusing on the development and on-going management of buildings with environmental protection measures, including: procuring raw materials from sustainable sources and reduction of transport; addressing the effects of climate change; waste minimisation and management; appropriate provisions in leases; energy performance certificates; and reducing energy consumption to assist in compliance with the carbon reduction commitment. We are now seeing developers incorporate incentivisation mechanisms into their contracts with designers and building contractors, particularly in relation to waste management.
“A reduction in overall waste, and a further reduction of waste which ends up in landfill, must bring cost benefits to a project.
“So, businesses appear to have recognised the financial benefits that adopting sustainable practices will offer, with ‘bottom line’ being the primary driver for being green.
“We expect the number switching to sustainable practices motivated by financial saving to increase.”
Mr Bradley said research had indicated that, globally, occupiers and investors alike may be willing to pay a premium for sustainable buildings of about seven per cent, a figure which rises considerably when looking at government occupiers and occupiers in industries such as oil – “signs that businesses may be prepared to take a longer-term view in relation to recovery of initial capital outlay”.
Market perception of customers was also a relevant driver.
Mr Bradley continued: “History tells us that, as the economy pulls out of recession, businesses will re-evaluate their mid and long-term business plans.
“If we believe some of the pundits that we will pull out of recession in 2010, this timing coincides with further UK legislation on environmental protection.
“We would not be surprised to see revised business plans including further provisions on sustainability and for organisations to increasingly demand sustainability performance indicators from their supply chain partners.”
Indeed, the concept of green supply chains was a key factor in aligning western and eastern global action on climate change.
“It is a well-known fact that up to 30 per cent of the UK’s emissions can be attributed to embedded carbon within imported goods.
“ By working with manufacturers who import into the EU to make their products more sustainable and compliant we can achieve significant reductions in the indirect carbon footprint of western consumers and in the direct footprint of eastern manufacturers.
“We at DLA Piper are champions of this concept and have worked with many companies on greening their supply chains,” Mr Bradley said.