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.”