Behind the green façade – UK development and sustainability

In the midst of near banking collapse and global recession, environmental issues have, contrary to the predictions of many, continued to enjoy media attention, offering initiatives to the development industry to combat the current predicaments facing the market.  ‘Sustainable development’, once merely the buzzword of politicians and professors, now, in a society more wary of the pitfalls of short-term excess, has the potential to become an idea that shapes our future. The question is whether the UK, and in particular the construction and development industry, are able to use this opportunity to drive forward the sustainable agenda?

Earlier this year, following a comprehensive industry wide survey on sustainable development in the UK, Taylor Wessing LLP published a report which revealed that the construction and development industry is well placed to play a key role as drivers of the ‘sustainability agenda’. Entitled ‘Behind the Green Façade’, the report addressed each of key issues and debates that surround the idea of ‘sustainable development’, and offered recommendations as to future progress. Crucial to the debate is the question of what sustainability actually means.

What is sustainability?
When applied to the development industry, the overwhelming response to this question was confusion. In truth, the lack of a uniform approach by the industry makes a universally accepted definition unlikely to be achievable. The development of common criteria to frame the sustainability objectives, by reference to material issues in context, is a more feasible goal. A commonly accepted “measuring stick” needs to be established to enforce concepts of sustainability legally.

Awareness
The report found that the UK development industry is split in terms of its awareness and understanding of sustainability issues. End users and investors significantly trail other sectors, with less than 30 percent reporting good or high levels of awareness and understanding. The best-informed sectors are developers (46 percent), technical advisors (48 percent) and contractors (54 percent). 

Communication is key to progress in this field. The values and benefits of sustainable development need to be clearly communicated to relevant industry sectors and end users in plain commercial language.

Corporate social responsibility
One potential key driver of ‘sustainability’ is the closely related and increasingly attractive and adopted model of corporate social responsibility. Corporate social responsibility policies of major organisations have gradually recognised the importance of the sustainability agenda, evidenced through the increasing use by organisations of green policies and protocols. So far, however, there is limited awareness of these policies, and in the survey 36 percent were not at all aware of “green agreements”, rising to 46 percent (almost half) for end users. However, “green agreements” are already in circulation and more widely in use by the major players – an encouraging 21 percent of respondents reported that they had “green” provisions in agreements. Crucially these often have collaborative rather than prescriptive terms.

Stricter and more wide-ranging legislation has the potential to increase the use of prescriptive ‘green provisions’. This strong legislative initiative, alongside a progressive social pressure, has the potential to accelerate the pace of change. The education of society to the benefits of a sustainable approach should increase tenant demand for sustainable buildings, which in turn offers a commercial incentive to landlords and developers to build in a sustainable way.

Are tenants willing to pay more for sustainability?
The biggest impediment to the development of commercially viable sustainable buildings is thought to lie in the potential extra cost to developers and tenants. Despite the difficult economic climate, our report suggests that the process of changing the priorities of end users from a focus on the short-term build cost, to one which takes into account the whole life building cost for sustainable and practicable occupation, is already underway: 87 percent of end users believe that the typical corporate occupier would be willing to pay more rent to secure a long-term sustainable building.

This finding shows the appetite for ‘sustainable’ buildings amongst consumers and suggests that end users are beginning to take a more holistic, long-term approach to financing and costing. Clearly then, there is a willingness for the development of ‘sustainable’ buildings, but is the achievement of these ambitious sustainability objectives really viable? Does the UK have the necessary expertise resources, knowledge and skills, alongside a positive commitment from the Government, to drive forward the sustainability agenda?

Strategy for the future
The majority of respondents to the survey showed a firm belief within the industry that the UK does have the right level of technological skill, knowledge and expertise. Questions, however, do remain over implementation and the willingness of the development industry to embrace change. These doubts have been compounded by the plethora of domestic and international regulatory controls, policy initiatives and measures, which when taken as a whole are confusing and lacking in focus. 

Clearly, a rationalised, more cogent regulatory regime is needed. Our survey reveals that whilst regulatory sanctions have an important role to play in driving the sustainability agenda forward, the development industry believes financial incentives will be the key to unlocking true behavioural change, particularly with regards to existing building stock. 57 percent believe that incentives such as tax relief (40 percent), grants or aids (17 percent) will be more effective than regulation (39 percent).

Government and industry should look to work together creatively, exploring benefits and incentives that will promote behavioural change, as well as effective regulatory sanctions.

Government initiative
The role of Government is key to the future progress of the ‘sustainability agenda’. Our survey reveals that 57 percent agree that the Government should have primary responsibility for driving the sustainability agenda going forward. However, a third of the respondents believed that the driving force behind the Government’s involvement in the sustainability agenda was “to show the international community that we are playing our part”. 

These responses clearly highlight the need for Government to take the initiative and firmly make a long-term commitment to an issue that is of immediate concern to current and future generations. A uniform approach to interpretation and implementation will be required alongside support from across the political spectrum.

The time is now
The challenging issues facing the UK development industry’s response are many: whether in terms of viability, regulatory confusion or lack of leadership. Furthermore, there are serious questions about how Government legislative solutions, both already in force and in future, will have to adapt to the economic and social contexts of a rapidly changing world. However, most encouragingly, despite much reported anxiety in the press, the report reveals that the economic crisis is not distracting people from the looming climate crisis – in fact, it may be the catalyst required to shake the industry into action.

Indeed, the budding realisation of the importance of sustainability is not confined to the development industry; boardrooms up and down the country, in all sectors of the economy, are looking to the future, devising strategies to not only meet forthcoming legislative obligations, but adapting their businesses to be at the forefront of an increasingly important initiative. The time is now to face an issue that will ultimately shape our future and with a strong collaboration with Government we are well-placed to secure a sustainable built environment.

Brad Fearn, senior associate; Taylor Wessing’s Construction and Engineering group.

He provides advice on non contentious construction, engineering and infrastructure schemes in the UK.  An admitted solicitor in England & Wales as well as Australia, Brad has provided advice in both the private and public sector arenas, including PPP where sustainability issues have featured, particularly in the health sector.