October 2016 marks the commencement of the 2nd year of progress towards delivering against the 2030 Agenda for Sustainable Development as outlined by the United Nations. The new 17 common goals are an integrated set of targets for a vision on a better world.
This is the second of three ‘briefing’ articles where FMJ will hear from the SFMI (Sustainable FM Index) on how their empirical evidence collated over the past 4 years provides a vision of its own – how the Facilities Management sector in the UK are contributing towards these UN targets, or in some cases, are not contributing to it at all.
SDG 6 – Clean Water & Sanitation
‘Ensure availability and sustainable management of water and sanitation for all’ is the mandate of the 6th SDG. Many aspects of FM operations are reliant on access to clean water, and while chemicals use and innovations for consumption reduction are widely featured aspects of operations – the average FM provider in the 2016 benchmark has limited confidence on water data, influencing sub-contractor usage, and carbon foot-printing. When the 2017 regulations are introduced, and consumers are able to choose their suppliers, the SFMI predict an increase in the conversation around water, its costs, accessibility, quality assurance, and conservation activities.
STATUS UPDATE: The SFMI remarked last year that FM providers are not performing very well on the ‘water’ criteria’. Each criteria is scored 0 to 5 (0 being very poor), and the average score for 2016 assessed organisations continues to be very low, and falling at only 1.8 out of 5. David Johnston, Lead Developer of the SFMI states that “water is not a hot topic in FM board rooms or in FM contracts, despite the recent high profile fine of Thames Water and the area’s clear links to pollution prevention agendas – which has been the staple statement in many environmental policies, for many years.”
SDG 7 – Affordable & Clean Energy
In the face of contradictions from the UK Government decision to revitalise the fracking agenda, FM providers are progressing with motivated clients to ensure access to affordable, reliable, sustainable and modern energy. To do so, they are implementing renewable energy systems, developing ‘gain share’ mechanisms, and presenting proposals which offer ways to minimise energy costs and to reduce the reliance on grid energy which may not be from ‘clean’ sources.
Rachael Baldwin of Skanska Facilities Services states that “as our population grows and our natural resources deplete new ways of generating sustainable energy must be sourced. At Skanska our key Environmental target is to have Deep Green™ projects which essentially means that buildings self-generate the utilities they need to operate. In our Facilities Services OU within Skanska we aim to reduce both our and our customers’ consumption to a minimum and work with our customers to understand their renewable, clean energy options for the future and move our customers to a Deep Green™ position.
STATUS UPDATE: Energy has been high on the agenda for FM providers as clients become more familiar with the costs associated with its usage. An early view on the SFMI 2016 figures shows that your average FM provider continues to make positive progress on this criterion. The capacity of the sector in contributing towards this element of the SDGs is under-developed at present, which is something a number of the Index Partners put down to a continued mind-set of sustainability as an ‘add-on’.
SDG 8 – Decent Work & Economic Growth
The SFMI monitors assessed organisations on an ‘employment’ criterion which looks at how FM providers develop initiatives to reduce unemployment, engrain equality & diversity into recruitment processes, and adapt HR practices to address skills needs. The FM sector represents a diverse range of skills set from cleaning operatives and engineers, to managers and security professionals. It is difficult to predict the direction of employment trends in the current political climate, however, so long as customers of FM providers continue to see the value in out-sourcing solutions – the stability and growth of the market will continue. It is this aspect of value that has been questioned throughout 2016 with Local Councils such as Cumbria, Essex, Bournemouth, and Liverpool taking certain FM services back in-house.
STATUS UPDATE: The 4 year trend on ‘Employment’ criterion scoring is negative. This means that the sustainability of current average approaches to tackling skills shortages and ensuring equality and diversity in workforces are not going far enough. Local employment mechanisms are in place, but tend to be created out of the need for gains in business efficiency, rather than articulation of the value that is provided to local communities when unemployment decreases. It is this level of conversation that will represent progress in FM dialogue as FM providers build their confidence in non-financial reporting of sustainability and social value.
SDG 9 – Industry, Innovation, and Infrastructure
Innovation is a key driver for clients in FM contracts. The most engaged clients are those that are constantly seeking the most up to date, cost saving, and efficient ways of working that they see as delivering value. Although the shiny and new is attractive and is arguably the most obvious was the ‘show’ value – it can not always mean the most cost saving and ‘sustainable’ way to produce value for money from an FM contract. Compartmentalising progress into a tick box in the shape of a new tap is not sustainability. Sustainability in FM means establishing longevity, stability, and trust as a service delivery partner who cares about the site whether they keep the contract after re-tender, or not. Without a life-cycle mind-set, skills to maintain assets, and accountability – there is no value in installing brand new items of innovation. In the SFMI, we measure ‘Contracts’ criterion on how the company approaches flexibility in delivery, as well as innovation, use of behaviour change, and engagement with clients beyond the contractual obligations.
STATUS UPDATE: The average score, over the past 4 years, has been 2.5 out of 5. This suggests that either the average FM provider has no interest in optimising their partnership with clients, or their clients have taken a very strict procurement stance that isolates operations, and therefore limits opportunity. Either outcome is not a positive one for progressing objective & targets on sustainability.
SDG 10 – Reduced Inequalities
HR processes within FM organisations are best placed to progress this SDG, and the SFMI measure criteria including ‘Diversity’, ‘Employee Development’, ‘Employment’, and ‘Stakeholder Engagement’ to monitor assessed organisations on the sustainability of their approaches to each. The SDG 10 goals include promoting inclusiveness based on a range of protected characteristics, and many leading FM providers are already monitoring a sophisticated granularity of datasets on these. Fewer, however, are designing specific initiatives to address negative trends in the data. This SDG also seeks to address wages – an issue captured within the employee development criterion where we investigate whether the FM provider has committed to paying a fair wage or living wage. ABM have developed a system for one of their clients that assessed the current marketplace to enable them to track progress on whether operatives were being paid above average wages for the geography, or whether there were cases to be made to increase these wages in line with others in the region. Andy Donnell, MD at ABM UK states that “this approach expresses our commitment to continual improvement and dedication to our workforce through innovation and proactive research”.
STATUS UPDATE: The integration of equal opportunities and diversity policies into recruitment is present, however, external reporting and general transparency is unclear. Empowering people with an aim to reducing inequalities is predicated on the access to and communication of clear and trustworthy data and information. Therefore, without higher ‘Disclosure’ criteria scores (currently averaging at 3.1 for all assessed organisations over a period of 4 years), the inequities of society will not be removed with the FM sector’s assistance.