COMMENT
LONGER LIFE
Business drivers such as employee engagement
and investor pressure are encouraging many
organisations to make bold commitments such
as carbon neutrality. Beyond these commitments
is a need to better understand the organisations’
carbon emissions and how to mainstream
investment in e iciencies and integrate
behaviours into the culture.
What is driving this change in corporate behaviour?
Let’s start by looking at the drivers a ecting energy
performance of facilities:
» Employees are becoming a major driver.
Developing a culture of Corporate Responsibility
and a purpose driven organisation are necessary
for attracting and retaining talent. Starting from the
recruitment phase it requires attracting individuals
who align with the values of the business and can
respond to dialogue associated with being a good
corporate citizen.
» Regulation has also played a role in driving energy
performance in the past 15 years. It has raised
awareness and provided data to enable informed
decisions to be made. But a lack of enforcement and
incentives for implementation has seen much of the
early ambitions on savings fade away.
» Cost is anticipated to increase by up to 100% due
to the rising cost of fuel together with the additional
costs to maintain and upgrade the infrastructure(1). We
are seeing this shi already in the proportion of energy
bills related to consumption and to overhead charges.
» Investors are also taking a keen view. The TCFD(2)
sets out requirements for financial disclosure of
climate risks which all stock market listed businesses
need to respond to. Property is one of the biggest risks
to an organisation, with climate change negatively
a ecting the book value(3).
Of these drivers, regulation will only play a limited
role if low enforcement continues. Investors, cost and
employees will be placing more pressure on larger
organisations and this will cascade down the supply
chain. Traditional barriers for most organisations
have been the ability to translate these drivers
into actions and then communicate the results –
10 FEBRUARY 2020
this represents a direct opportunity for FM to get
involved. How to do this is via a strategy which has
defined targets that align with the business.
DEVELOPING A STRATEGY
Building a strategy requires knowledge from a
range of departments and activities within the
organisation. The strategy will depend very much
upon the culture of the business and its approach
to both risk, returns and its maturity on the
sustainability curve(4).
A critical output is the ability to measure, track and
value the impact of sustainability activities on core
business and financial metrics. To do this will require
an understanding of the underlying drivers and
provision of a single measure performance indicator
to communicate the value of these sustainability
activities.
The first step towards developing a strategy is to
perform a materiality review – looking at a matrix
that links the importance of sustainability to both
the business (e.g. delivering value) and external
parties (e.g. managing risks). The process of
understanding the business and stakeholders is o en
underestimated but can provide a very clear insight
into how value can be generated in conjunction with
improved sustainability performance. A starting point
for the materiality review can be taken from the SFMI
assessment(5) which has defined 23 material issues
for the FM sector. Data will be required to support
the review together with interviews to provide the
supporting context.
Incorporating supply chain activities within the
materiality review is important, helping to bring in
the wider impacts of the operations and therefore
the potential additional value – this will also mean
understanding them as stakeholders with regards to
what can be achieved.
Plotting the matrix will essentially be a series
of dots, with those in the top right quadrant
typically identified as those which are important
to stakeholders and will also deliver the greatest
value to the organisation. That is the starting point,
because each of these will need to be developed
and implemented, with progress and value
communicated through a series of actions or defined
targets.
The resulting material outputs, the actions, and
the value captured will help to communicate the
strategic direction to the senior management in a
language that they understand along with the value
provided by the FM team.
CHANGING THE CORPORATE CULTURE
Responding to market pressures such as carbon
neutrality and removal of single-use plastics, without
being part of a wider strategy will not change the
corporate culture, but will instead reinforce the
idea of task-based activities being the remit of FM.
Ultimately, this doesn’t need KPI’s as initiatives are
task based and therefore doesn’t get traction within
the business.
The power that underpins this approach is to
define very clearly the value that FM provides to the
business in a language which is understood and
connects directly into the reporting measures. This
doesn’t have to be about just costs, with employee
engagement and investor pressures also significant.
In many cases, to achieve the value there will be
shared responsibilities and outcomes which will help
both parties – ‘what’s in it for me’. The move towards
employee engagement and where FM supports is a
prime example of this, helping reduce turnover and
improve satisfaction.
The imperative is not just internal within the FM
department, but with wider business including
procurement and supply chain management having
a key role. It is this activity that the third article will
focus upon.
The second in a series of articles by Sunil Shah of Acclaro Advisory on
sustainability looks at developing a sustainable strategy and how to take
your carbon programme beyond a short-term initiative
REFERENCE NOTES
(1) www.nationalgrideso.com/insights/future-energyscenarios
fes
(2) www.fsb-tcfd.org/
(3) https://europe.uli.org/wp-content/uploads/
sites/127/2019/02/ULI_Heitlman_Climate_Risk_Report_
February_2019.pdf
(4) www.accenture.com/us-en/insight-un-global-compactceo
study
(5) www.acclaro-advisory.com/wp-content/
uploads/2019/07/The-2019-SFMI-Assessment-Criteriaupload
for-website-1.pdf
ADVICE & OPINION
/ULI_Heitlman_Climate_Risk_Report_February_2019.pdf
/
/future-energy-scenarios-fes
/insight-un-global-compact-ceo-study
/The-2019-SFMI-Assessment-Criteria-upload-for-website-1.pdf
