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 third and final instalment of the ‘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 11 – Sustainable Cities & Communities
Making cities and human settlements inclusive, safe, resilient, and sustainable. FM urban maintenance contracts, and their position as a conduit for stakeholder engagement makes the assessed organisations of the SFMI ideal candidates to ensure progress against this SDG. The 2016 results have found a rather large drop in the sustainability of approaches to stakeholder engagement, and overall, the category of ‘social’ performance has made a marginal decline in average scoring.
However, VINCI Facilities’ (Winner of the 2015 SFMI) Commercial Director, Rory Murphy, states that “45-50 % of all carbon emissions are from buildings. As facilities managers and experts in the management and operation of the built environment, we’ve got a crucial role to play in proposing innovations that will reduce this carbon footprint and provide our clients with more sustainable and cost-effective solutions across the entirety of their portfolio. We have also a wider social responsibility to deliver value and benefits to the communities within which we operate. As with any truly sustainable FM business we envisage being here for the long-term, therefore the wider social, environmental and economic impacts are always to be considered and our management and usage of scare resources, be they environmental, material or human will be key to our sustainable future.”
STATUS UPDATE: Across the past 4 year, social performance has been highest amongst the ESG categories. In contrast, however, stakeholders are often identified but what they need, how they feel, and ways that they may become integrated into business decision making is under-developed. To develop and maintain sustainable cities and communities, closer relationships must be forged with site level and corporate level stakeholders.
SDG 12 – Responsible Consumption & Production
Endeavouring to ‘ensure sustainable consumption and production patterns’ will mostly impacts services for catering and waste management contracts, as well as the providers’ own in-house procurement patterns. This year, the SFMI has merged the 2015’s criterion of ‘Waste’ and ‘Materials’ into one focused on the ‘Circular Economy’ future. This encompasses sourcing of products, materials, and food for service provision, as well as testing the robustness of processes in place to treat materials and waste as a resource from a life-cycle perspective.
STATUS UPDATE: An early insight into the performance of ‘Circular Economy’ in the 2016 results shows that FM providers are restricted in their progress, as full strategic direction is not being established in-house and directive guidance remains elusive. The leaders of the 2016 SFMI, to be announced on the 10th November, are showing signs of progress in this field as historical sporadic procedures that dealt with singular waste streams are beginning to be brought together into a competent strategy. In dealing with ‘Waste’ and ‘Materials’ separately, most assessed organisations had already commenced their understanding of waste as a resource, however, the joined up and deliverable process is where the biggest area for improvement exists.
SDG 13 – Climate Action
The 2016 early insight that ‘Energy’ performance figures have marginally increased, enables this article to suggest that FM is committed to ‘taking urgent action to combat climate change and its impacts’. Although energy and associated emissions are a narrow yet clear contribution to climate change – it is a fundamental aspect of addressing the problem. Other aspects such as ‘Transport’ are not developing as quickly due to a focus within this criterion on trialling and innovation, rather than robustness of entire processes and reporting.
STATUS UPDATE: Reporting on and reducing carbon emissions is a matter of transparency in the FM sector – some providers have high ‘Disclosure’ scores, and make it very clear how data has been developed and verified, whereas others do not even report publicly on data and progress on these figures. Stock market listed assessed organisations commit to this, out of obligations, however, few ensure data is assured using third party auditing.
SDG 14 – Life Below Water
Conserve and sustainably use the oceans, seas, and marine resources for sustainable development. Perhaps the most tenuous link to the FM sector comes with the 14th SDG, as the realistic opportunities to offer assistance on its progress comes from the use of recyclable materials and strict COSHH guidelines and training to ensure he least harmful chemicals are not used in cleaning processes.
STATUS UPDATE: Most FM providers are confident in their delivery of recycling and waste management offerings, although an area for improvement exists within their relationships with suppliers who deal with the end of life processes. The SFMI also measure against ‘Employee Development’ wherein approaches to providing training to all levels of staff are assessed. ‘Water’ is an assessed criterion of the SFMI, which has historically performed very poorly, as providers and clients are focused on water innovation and aesthetically pleasing consumption reduction mechanisms – rather than the wider picture on water quality, accessibility, and monitoring.
SDG 15 – Life on Land
Protect, restore, and promote sustainable use of terrestrial ecosystems, sustainable manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss. Beyond procuring sustainable wood, the FM sector have capacity to impact this SDG through understanding the ecological value of the sites on which they operate. Furthermore, where site maintenance contracts are directly contracted activities, the procedures in place to deliver require well thought out processes to ensure sites’ optimisation.
STATUS UPDATE: The 4 year trend on ‘Ecology’ criterion scoring is poor as a sector. Indirect responsibilities are largely cited as the deciding factor over whether a provider ‘cares’ about a site’s wider ecological value. It is a fair assessment that FM providers can feel restricted by rigid contracts, however, there is a lot of knowledge as a sector that is underutilised and may, in contrast, be largely under-applied. The latter of these issues is a clear symptom of many stakeholder matrices that place ‘biodiversity’ as a low priority.
SDG 16 – Peace, Justice and Strong Institutions
Having clear structures in place that check and necessitate the accountability for sustainability in FM providers is key to help ‘promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels’. The SFMI scores assessed organisations against a ‘Board Commitment’ criterion, which last year saw a continued decline in its sustainability. However, Nicola Lovett, ENGIE’s CEO of Services Division explains that “we are committed to leaving a lasting positive legacy on the environment and communities we operate it in. This is why it is essential our leadership team set the example and have accountability for not only financial but also non-financial performance of our business. One key aspect of this is that our Board has in place objectives in relation to the delivery of Our Future Strategy that are linked to their financial remuneration.”
STATUS UPDATE: Assessed organisations are focusing on embedding a ‘culture’ and delegating accountability across the organisation, however, leadership is required for any cultural revolution – and in some organisations this will need to be a revolution in its purest sense. Some leading organisations use frameworks that tie Director bonuses to delivering on sustainability, however, these examples remains largely uncommon.
SDG 17 – Partnerships for the Goals
‘Collaborations’ is a new criterion in the 2016 SFMI, introduced from the growing recognition that operating in isolation will not create a sustainable future. Not only will it take a combined effort, with trust placed in competitors and JV partners, but the structures in place to deliver collaborative solutions need to be resilient to achieve FM provider and client end goals. The SFMI 23 ESG framework has assisted partners in created a structured approach to continual improvement – BAM FM Ltd’s Strategic Development Director Reid Cunningham states that “The process of undertaking the Index has stimulated internal collaboration that might not have happened otherwise. The results of the Index provide us with a plan for where we can improve our business in the areas of efficiency, innovation, safety, and customer focus.”
STATUS UPDATE: The early bird news on the ‘Collaborations’ criteria is showing a poor average performance. Informal collaborations with NGOs, charities, and suppliers are in place – but few are engaging with other industry competitors, fewer still with the formalisation of policies on collaborating. The latter being something that would instil investor confidence that the organisation was not engaging with high risk or unsustainable partners.