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In June this year, the SFMI began a collaboration with RICS to help begin a very exciting project that could be used to shape the global debate on how the built environment embeds responsible business practices.

As you can tell, this is no small feat, and the SFMI is excited to be a part of this potentially huge project from the get-go. It also touches on the hugely important topic of giving social value, which is heavily discussed across the FM sector and others.

What is this project? – The Responsible Business Leaders Forum

What is that then? – This forum brought together a group of business leaders to discuss issues that can shape global debate in the role of the property sector (inclusive of all areas of property such as FM) to manage responsible business issues. These issues are far reaching; from climate change, employee development, well-being, giving social value – the list goes on – whilst balancing these responsibilities with the need to turn profits and appease the shareholders. Add in the rapid advances in technology and the risks and opportunities associated with data, automation and AI and you have yourself a fascinating debate of how a responsible business conducts itself in the future.

When was it? – The forum took place in late July at the RICS head office, on Westminster Square.

What next? – We are releasing a document to the members of the forum, and the wider group of interested senior level industry personnel and aim to setup a second forum in the UK to continue the discussion with a wider group. RICS are also aiming to roll out the discussion globally to understand the challenges across different regions of the world, so that we can collect the results and assess learnings that can be had.

These learnings can then be discussed at the WBEF (World Built Environment Forum) in May next year, and by then we shall be closer to the understanding the business case for a global standard of responsible business in property could look like.

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.

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.

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 1st of 3 ‘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 1 – No poverty

This goal is highly relevant to the FM sector as ‘frontline’ staff such as cleaners, caterers, and security staff represent a group of employees who are paid the lowest wages of any firm. Walk into any commercial, educational, or healthcare building in the UK and the chances are you may not notice the value these employees bring – cleanliness, safety, and friendly customer service. The SFMI measures FM providers, who these people work for, against criterion such as ‘Sustainable Communities’ and others which encompass an understanding of the approaches taken to pay fair wages and oblige with new regulations such as the Modern Slavery Act.

STATUS UPDATE: Social sustainability has been creeping up the CR agendas in the past 4 years, however, slow progress is being made on committing to fair or full living wages as standard. So far, most assessed organisations have prepared Modern Slavery statements but proposed procedures on the statement’s implementation are less transparent.

SDG 2 – Zero Hunger

A part of the SFMI methodology for choosing ‘who to assess’ on an annual basis is drawn from the Government ‘Supplier Lot Matrix’ – a list of FM providers who have been chosen as that year’s chosen suppliers to the UK Government. There are 3 ‘lots’: Lot 1 ‘Total FM’, Lot 2 ‘Hard FM’, and Lot 3 ‘Soft FM’. Within ‘Lot 3’ is, amongst others, the provision of catering contracts to public bodies. As we all know, there has been an increased focus over the past decade on what we eat, its nutritional content, and the sheer amount of food waste that is produced every day. So how is your contract enabling the efficient use of resources and addressing the need to nutritional optimisation?

STATUS UPDATE: 2016 is the first year we are looking at ‘Circular Economy’ as a criterion and scores are, so far, looking bleak. Also, in 2015 we found that the average Lot 3 supplier was less ‘sustainable’ in comparison to procuring ‘Total FM’ provision. This indicates that choosing to compartmentalise FM into blocks of separate activities is restricting the long-term value a client would otherwise be receiving from out-sourcing catering service provision to a specialist provider of FM. Although ‘Zero Hunger’ may not be a topical issue in the UK, it is the role of large corporations to procure resources efficiently and limit waste.

SDG 3 – Good Health & Wellbeing

This goal places an onus on the FM sector to foster resilient business models that address employee health, safety, and well-being. This in turn will have an impact on productivity, turnover rates, and absenteeism – resulting in added value to clients. The SFMI measures ‘Employee Well-Being’ and look at how the sector’s major players are able to understand their turnover and sickness rates, and design initiatives and campaigns that address their particular areas for improvement.

STATUS UPDATE: Turnover and sickness rates are monitored well, but understanding on how these link to productivity is low, and they rarely inform the design of well-being initiatives. Instead, activities are usually more influenced by popular calendar trends and meta-trends such as ‘mental health’. Whilst these activities are valuable and necessary, there is a growing gap of understanding the ‘bottom-up’ issues.

SDG 4 – Quality Education

The FM sector can contribute to this goal through the provision of FM services to schools and universities, and at the same time address the technical skills shortage facing the sector. The SFMI measures providers on ‘Employee Development’ – giving each a rating from ‘0’ to ‘5’ (‘0’ being poor) based on what infrastructure is in place, how they utilise matrices, and encourage career progression.

STATUS UPDATE: Robust development networks are rare thing in the FM sector, and where established, there are issues with communicating opportunities adequately. Whilst the assessed organisations may be aware of the skills shortage – there is a lack of an integrated approach to tackle the issue long-term.

SDG 5 – Gender Equality

The SFMI assessment framework features criterion for ‘Diversity’, ‘Employment’, and ‘Sustainability Frameworks’ which provide a view on how well equality and diversity policies are engrained into HR activities. The 2016 process has also been asking questions about the preparations to report on the Gender Pay Gap.

STATUS UPDATE: Sector leaders have been committed to this prior to the mandating of its reporting in 2017. However, approaches to addressing equality & diversity at Board levels remain vague as providers of FM avoid being open about any positive discrimination agendas.

VINCI Facilities’ Senior Sustainability Advisor Charlotte Osterman, states that “To support the SDG for gender equality many actions could be taken; so we needed to prioritise and make it relevant and deliverable for our business. In our UK FM setting, we’ve undertaken actions to promote equal wage for same work, empowered minority groups in general across our business and enabled employees to apply for flexible working arrangements that can help parents combining careers with school pick-up times. We have also put a great emphasis on engraining a culture of Fairness, Inclusion and Respect right across our operations, which has contributed to us achieving Investor in People Silver status and obtaining Leader in Diversity accreditation.”

“A lack of transparency results in distrust and a deep sense of insecurity.”

So said the Dalai Lama at any rate. Here at the Sustainable Facilities Management Index (SFMI) when we are trying understand an FM firms operations we look to their publicly available information and ‘trust’ it informs us of facts and figures that help us make decisions – whether that be for tender contracts, collaborations, or investments.


We know that clients want to know that their suppliers are delivering what they promised. But how can people check exactly what is being achieved before they enter into a contract? There are several possible sources of information, including:

  • Financial reports and governance details
  • Corporate websites and reporting
  • Submissions to third party organisations such as CDP and DJSI

Acclaro Advisory’s annual Sustainable FM Index is the only index focused specifically on facilities management and each year reviews publically available sources of information for leading UK FM providers. The data gathered acts as a resource on how transparent these service providers really are, also advising on how they can improve in the future.

Transparency

We have found that more often than not FM providers actually sell themselves short in the public sphere. Our index utilises something called the Average Initial Assessment Score which measures the difference between what a company says they are doing with regards to sustainability and what they are actually achieving. In 2015 companies were found to be roughly 10 per cent better than they thought they were, or at least than they said they were (46.2 per cent compared to 56 per cent).

One of the biggest things we picked up on was the noticeable gap between publically listed and privately owned companies when it came to transparency. The SFMI assessed organisations against criteria that are interpreted as ‘management’ including:

  • Risk Management
  • Board Commitment
  • Management Systems

Also we assessed them on criteria that are interpreted as ‘implementation’ such as energy and circular economy. When we had all the information and results we found that privately owned, out-sourced FM providers had an initial assessment score average of 26 per cent for the management of sustainability, and 27.5 per cent when it came to implementation. In contrast publically listed FM providers had a score of 51.3 per cent and 46.8 per cent respectively.

The SFMI theorises that this may be down to whether organisations are obligated to report publically on what they are doing. The implications of this are that all potential clients and investors are reviewing the information and seeing that your average out-sourced provider of FM services have a 50 per cent deficit in ensuring sustainability is managed well, whether the companies themselves are well-equipped or not. Even the highest management score was only just breaching 70 per cent sustainable.

This is important to note because the outsourcing facilities management sector isn’t articulating what it is doing. The service providers as a whole are failing to explain to clients exactly how and where it is adding value to their sustainable initiatives.

Where the Index does come into its own is through the direct review of organisations performance through face to face assessment, limiting the potential for miscommunicating responses.

The Future

So, bearing all of this in mind, how can the firms improve in the future? At present very few are seeking third party verification of the data they are reporting. An even smaller number are demonstrating how they are backing sustainability in financial terms. Whether this is through the money they spend on training, incentives coming from the board or something else, it needs to be articulated.

Demonstrating both financial and non financial reporting timeframes is important, as is ensuring your organisation has the confidence to use and report on non-financial indicators. When the SFMI measured the companies ability to do this on a scale of zero to five the average score was 1.6.

Clearly expressing exactly how you deliver best practice as standard procedure is a key step in moving away from tokenistic sustainability and ensuring that your corporate values are not compromised by client priorities. In future articles the SFMI will explore the sustainability ceiling and explain exactly how and why business models need to be adapted.

Conclusion

At this moment in time the facilities management sector doesn’t have a clear voice when it comes to reporting these sorts of issues. It needs to learn how to trumpet its achievements. It needs to learn to explain exactly how it is adding value to clients and the buildings in which it operates.

Where and when timely performance is reported there is often a limited amount of authentication taking place. This leads to “green-washing” and expressions of service-as-standard whereas in reality companies are performing in contract-specific vacuums.

The SFMI has an annual vision and it is to empower both clients and service providers by highlighting best practice and increasing an awareness of what excellence in the sector looks like. There is much that is excellent in the industry which should be shouted about. There are also areas which can be improved, but they won’t be if the industry doesn’t discuss the issues.

Once we start doing this it will be much easier to build trust into contracts. This is absolutely essential in the early days of any new relationship.

Every year Acclaro’s Sustainable FM Index helps participants to identify the areas in which they can improve their sustainability performance, both in absolute terms as well as relative to peers. One of the key areas they judge when it comes to benchmarking the participant’s impact on the environment is circular economy.


In order to score highly in 2016 a company has to:

“Integrate resource efficiency into the services and can provide examples of initiatives that have delivered significant reductions in waste, reuse and closed loop recycling. The company can also provide performance data and targets relating to its waste and resources impacts, and show how reclaimed/recycling resources are preferred/choice edited.”

Waste has received a lot of attention from the facilities management sector, as well as many other industries, for many years. The obvious links between waste generation and climate change means that nobody can ignore their own role in its production. In people’s minds this impact starts from the mal-practice of landfilling.

Britain is better than it used to be when it comes to landfilling. For example in 2014/15 the total amount of waste dumped in landfills by Local Authorities came to something like seven million tonnes (out of a total amount of just under 26 million tonnes). This is massively improved from the 22 million tonnes in 2000/01 (out of a comparable total) but still far more than many would like.

Still people need to be aware that not all waste can actually be dealt with using a ‘cleaner’ process. Though the aim is admirable organisations that are aiming for, or even claim to have achieved ‘zero waste to landfill’ policies are chasing an impossible dream. Even though landfill has become one of the dirtiest words organisations can use and it is often the first target in any company’s environmental policy.

You can argue that the entire waste industry has been revolutionised in recent years. Incineration, Materials Recovery Facilities and Anaerobic Digesters have provided alternative solutions and filled a void in the market that in a number of cases now provide ‘waste’ with a new life.

However, there remains a small pool of waste rejects such as bottom ash from incineration that have not got an outlet. The innovation race is running its course and currently there remains a need to cut waste generation from its procuring source – rather than find newer ways to deal with a growing end of life re-articulation process. The result is simply that there isn’t actually any way that any organisation can achieve absolutely zero to landfill.

The Sustainable FM Index suggests that instead of just throwing more and more technical resolutions at the problem the whole approach to waste and materials needs to change. Cradle to cradle intelligence needs to be built in. Few FM providers are engaged at this sophisticated level of policy yet but they need to be. We are entering a critical chapter in a waste management story that desperately needs a happy ending.

Should FM providers choose to move towards full product transparency – they would understand at a materials-level what is being used and would then be able to manage their waste management processes better, as well as managing risk and compliance obligations including knowledge on conflict minerals and modern slavery. This is what is meant by a cradle to cradle model.

Once an organisation has embedded such a model of waste management, their circular economy approach will thrive, and other ways of conducting business will be seen under the same light – leading to continual improvement that is sustainable and accountable, and that minimises risk and builds true brand reputation on transparency and cost-effectiveness.

The SFMI benchmarking process enables Partners to step back and evaluate their business models from an objective point of view, alongside hearing from industry experts on how the right approach to governance can assist in achieving a circular economy for clients and their internal processes.

For example, ENGIE, a Partner of the 2016 Index, have worked with a prestigious government contract for many years, and have produced a number of ‘circular results’ within this contract, including implementing reduction innovations. Following a successful pilot, ENGIE moved from a tape to digital solution for transcriptions services for policy and fraud interviews. Leon Wilde, Head of Environment at ENGIE states that:

“ENGIE are committed to reducing the environmental impact of our clients by deploying solutions and innovations which follow commitments laid out in our Waste & Resource policy wherever possible. The solution Catherine Evans and Amer Iqbal brought a tangible benefit by reducing paper, tape, energy and fixed costs from repairing the analogue machines. The success of this excellent innovation has led to exploring further opportunities for circular solutions.”

Sustainability is gaining a resurgence as the economy stabilises and, as an industry, we are looking towards growth over the next few years. As a subject, it had certainly dropped off the agenda during the dark days over the past five years but twin drivers around resource efficiency and costs are leading towards a future of constraints that will affect all businesses and their supply chains.

2014 saw the publication of the 2nd Sustainable FM Index, which assessed the top FM organisations against a rigorous set of criteria to validate the services being delivered. There are a number of emerging trends that are being evidenced through the Sustainable FM Index which are described below. These trends have not been provided in any particular order, but some have a greater level of certainty due to regulatory drivers that are underpinning them.


Overall Sustainability Progress

Through the Index, the Index Assessment Model shows the sustainability performance for all the 27 participating organisations from the Sustainable FM Index. The 21 criteria within the Index have been split into a Management set and an Implementation set of criteria.

  • Management: outlines what the strategy is going to be for the company in terms of sustainability.
  • Implementation: deals with how the strategy will be delivered.

When activities are split into management and implementation, there are a few clear indications that can be seen. Implementation has risen among listed companies by 5% over the last year. This supports the finding that “Since 2007, there has been significant progress in the implementation of the sustainability policy within organisations”, due to legislation and increasing pressures on FM organisations to demonstrate their Corporate Responsibility.

Management scores have decreased over the past year, falling by an average of 4%, despite the emergence of new legislation to help engage senior management with sustainability issues. The 2014 BIFM Sustainability report states that the ability of facilities managers to drive organisational change is still constrained by poor communication and a lack of robust and granular data; “overcoming these weaknesses is critical to delivering a sustainable FM service provision”.

Management Versus Implementation

There are two key trends that can be observed from this assessment. The first relates to the position of private FM organisations being on the same trajectory, but much further behind those that are listed. There is a clear journey that FM businesses take as they mature in embedding sustainability within the organisation.

The second key trend is the short term nature of sustainability within FM, demonstrated by a closer alignment on a 1:1 basis between the implementation and management scores. This correlation infers that as strategies are developed, they are implemented relatively quickly. This also gives rise to a lack of longer terms thinking being planned and forward assessment of likely impacts – evidenced during the assessments. Private companies are following the same trajectory but are much earlier on in the journey.

The worrying part of this trend is that it fails to take into account some of the longer term trends being seen around resource constraints, skill shortages and wages to understand the risks to the business and to mitigate the issues.

Energy Management

Energy is now intrinsically linked with the management of buildings and seen as a pre-requisite for FMs to deliver as part of their service. Legislation such as the Carbon Reduction Commitment and voluntary indices such as GRESB are highlighting the increasing linkage between energy performance of buildings and their asset valuation. Indeed, the proposed minimum energy performance standards due in April 2018 will make poor performing buildings unlettable, which is having an impact on the sale price of current properties.

However, whilst the property sector is seeing the perceived link between energy performance measured through Energy Performance Certificates and BREEAM assessments, what is the role of FM as part of this. FM for the large part in commercial properties is still related to the management of the building – the provision of maintenance services based upon a suite of indicators related to work order completions and meeting compliance requirements. Energy management however is related to the procurement of energy, its metering to enable completion of the regulatory and corporate reports and also identify efficiencies. Often these two roles are separate entities and not linked together.

The linkage between the two roles – one of management and the other of implementation – to enable the changing of specifications is not incentivized sufficiently and becomes more acute where outsourced parties are being used purely because of the contractual issues related to delivering a service. There is already evidence of organisations taking business back in-house as a result of this challenge.

The increasing costs associated with the consumption of energy, together with viable means to reduce usage and reporting imperatives means a continued focus on this area. For FMs, this will require a different contractual approach to incentivise change in behaviours and management, which are recognised as the main streams for reduction. The trend is moving towards energy and maintenance being treated as an outcome based service as opposed to a set of measurable input criteria allowing for greater alignment with client requirements and scope to link knowledge between the maintenance, energy management and finance disciplines.

Employee Wellbeing

Wellbeing and its benefits have been a hot topic this year with the release of the Governments review: Does Worker Wellbeing Affect Workplace Performance and the World Green Building Council report on the subject. To perform at the top level organisations must take part in regular two way dialogue with staff, including POE studies to optimise working conditions, productivity and wellbeing. Evidence should be provided that practices have been used to achieve reduced sickness and turnover rates. FM has a role to play in providing the face and environment that their customers operate within – from the first person engaged within the business (reception or security) through to the ambience of the space. Better understanding of the wellbeing issue can help to deliver a better experience.

Whilst evidence that the design of an office has a material impact on the health, wellbeing and productivity of its occupants is well known, the information does not translate into the design and financing community. The need for a different discussion to present the evidence base is compelling and heightened by the lack of skills in certain parts of the industry.

There is a slow progression towards a better understanding of these benefits. M&S will be focusing upon this area to understand the linkage but also to measure the benefits that a healthier workplace has on the wellbeing of both staff working in the building and the customers. The real value is simply that the cost benefits associated with improved performance of those in the building will far outweigh the savings from direct environmental initiatives. Linking the two together delivers a clear imperative of the need to change and the value behind it – cost, environment and people.

Living Wage and Employment Issues

Across many urban areas, and particularly London, FM employs some of the lowest paid individuals in the property. Momentum is now gaining around FMs using the Living Wage for roles including cleaners, security and catering personnel. However, as Living Wage continues to outstrip inflation pressure will come to customers and FM providers to look at alternatives.

The cost of living has been raised many times and most recently Glasgow City Council has sought its FM providers to ensure the living wage is provided as part of the contract to deliver services for the Council. The UK Government has a similar intent as part of the FM Contracting Model tender that is underway.

Whilst not necessarily a trend, there is a forward crunch point that will appear whereby the increasing Living Wage for FM staff will significantly outweigh savings that may be generated leading to a moral question that will be asked of by those procuring the service.

Effective implementation will require a change in not only the contracts that are in place, but also the way that these activities are measured as part of service delivery. Increased focus should be placed upon the end provision and outcome base.

Summary

Sustainability has been re-booted from the doldrums seen over the past few years. An understanding of the value and benefits that can be gained from effective implementation within a business – not just efficiencies in energy and waste, but also improving productivity of staff and their wellbeing.

Organisations are starting on this journey to fully embed the concepts of sustainability within the business as an integral part of the operational activities. To do so will require some fundamental changes to the way we currently measure performance and enable contracts to be developed which in many cases hinder the ability for sustainability to take place.

For FM, this will become the difference between those organisations that can support their clients and those who cannot. Watch this space – the next few years are looking to be quite exciting!