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Property Companies Failing On Most Sustainability Issues

Posted on 17 February, 2014 by Cliff Goodwin

The majority of commercial property companies are failing to integrate environmental and social issues into their businesses and reach even the lowest sustainability benchmarks, according to a new survey.

Although the report, commissioned by The Australian newspaper, concentrates on Australasian businesses it claims there are “useful lessons” for the entire sector regardless of location. The key areas it looked at included environmental impact, sustainability engagement, supply chains, gender equality, labour standards and community investment and while it found there were some strong industry leaders their actions were “dwarfed by the poor performance of the sector overall”.

On carbon emissions and energy efficiency the property sector as a whole is under-performing, says the report. Vast gaps were now opening up between areas like commercial offices, which were making significant efficiency savings, and other property sectors which were failing to implement even the basic eco-measures.

Because of a projected increase of energy use in commercial buildings, and the corresponding rise in carbon emissions, there is a need for more rigorous uptake of energy saving initiatives. Waste management, the survey claimed, was another area commonly overlooked compared with other environmental indicators.

The report also highlights problems associated with the non-transparency of supply chains,  both in terms of environmental policy and labour standards. “Given the common reliance on outsourcing of core functions and servicing, as well as external procurement of materials supplied for property development, greater transparency is urgently needed in this area,” it says.

The report’s key findings and recommendations included:

• The need for a standardised environmental reporting framework to cover things like carbon emission, energy consumption, water usage and waste production.
• The reporting procedures for parent and subsidiary companies should be clarified. Many subsidiaries rely on disclosures by parent companies, despite subsidiaries often being listed companies in their own right.
•  A greater transparency on labour and supply chain issues, given the heavy reliance on external contractors across all stages of property construction, maintenance and servicing.
• The lack of attention to worker health and safety disclosures is in “stark contrast” to reporting in other sectors of the economy and a more proactive and transparent approach is urgently needed.
• Although the number of women on company boards is well above average, the proportion in day-to-day management positions is below average and greater attention is needed to be paid to diversity and equal remuneration policies.
•  The importance of the built environment and its footprint on where people work, live and shop also needs greater attention. It is essential to keep communities informed and to consult regularly with workers, unions, tenants and community groups.
• A greater scrutiny is needed by investors who, ultimately, possess the power   to force through environmental changes and demand better reporting guidelines.

The report paints a picture of a sector that ought to be doing more, given the huge impact that buildings have on the environment. It also points the finger at a construction and property industry that has failed to take on board many of the risks that it faces.

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