In the third of a series of industry roundtables arranged in association with BDO Stoy Hayward 12 voices from the sector share their views on the question of environmental reporting
FM World magazine: 29 May 2008
Cathy Hayward (chair) is editor of FM World
Bill Swan is director of Paper Round
Robert Greenfield is group director for safety, health and environment at GSH Group
Karen Ford is CEO of Creative Facilities Management
Christine Taylor is head of research in building sustainability at Cordless Group
Ian Fielder is chief executive of BIFM
Gordon Ludlow is environmental manager at Oxfam
Greg Davies is head of service development at elementus
Bernard Crouch is a consultant
Ben Murray is director of Carbon Smart
Mark Rogers is director of Integrated Cleaning Management
Andrew Mawson is managing director of Advanced Workplace Associates
Cathy Hayward (CH): Environmental reporting, is it a challenge or opportunity? With issues such as energy, waste, hazardous materials and carbon footprinting, an FM's responsibilities vary greatly. The joint research by BDO Stoy Hayward and BIFM, FM2007 Challenges and opportunities in the FM sector, revealed that a third of FMs reported quarterly, 16 per cent reported monthly, a quarter said once a year and 13 per cent said they did not report at all. My first question is whether we report too randomly and are we doing enough of it?
Rob Greenfield (RG): If we at GSH Group undertake a building's energy management we expect to report monthly. But for an FM on their own taking care of waste management quarterly might be enough, or even six-monthly, to make sure waste is sorted correctly and hazardous materials handled properly.
CH: What are your clients doing as far as reporting to their own boards?
RG: Bigger clients demand monthly reports, especially US companies because they already report back monthly to global operations in the States and they are very careful with complex safety and environmental issues. So it's a fierce KPI regime and the report process could take two or three administrators' time each month. But most clients only want to save money so unless there is a legislative reason to report monthly, why do it? In fact, it's hard to convince an SME to invest in environmental reporting. It might be that the government will have to legislate for them to do it.
Gordon Ludlow (GL): As a client, we give our service provider total information about ourselves. But we also want to know what the service provider is doing internally, although we wouldn't expect monthly reports from them.
Ian Fielder (IF): The client wants to be a good corporate citizen and the supplier is asking the client 'what do you want us to monitor?' And Gordon Brown gave us a commitment a few years ago for what we thought would be mandatory environmental reporting. A lot of academic research on environmental or sustainability reporting is not very practical. It's about time that environmental standards came out from institutes like BIFM. Why don't institutes collaborate to produce one standard for reporting?
RG: Unless the client is specific we would probably not submit a bid for work and make environmental reporting too detailed, which would raise the price of our bid.
Mark Rogers (MR): At the bid stage environmental reporting can be tick-box. But having won the bid you sit down with the client to improve their reporting.
Andrew Mawson (AW): Nothing happens until the board wants to run a sustainable business, which should be required by law. Until then large organisations do it because of CSR image and maybe because their staff insist on it. For SMEs it is more difficult.
CH: Do we need legislation to achieve regular standard environmental reporting?
Greg Davies (GD): Some legislation is in place already, in the Companies Act 2006 section 172 talks about directors' responsibility to report on environmental issues. But responsibility for reporting is different from responsibility for delivery.
Bill Swan (BS): Quarterly reporting is probably appropriate. But the devil is in the detail. For example, we take away a large amount of paper from a client and report back the volume converted to weight to a CO2 figure. I guarantee the figures we use are different from what other people use. Also, we find quarterly reports often go into a vacuum, nothing happens and suddenly someone senior decides they need it.
Karen Ford (KF): Hasn't environmental reporting historically been considered 'a job to be done' by people? Will we take a lead and have our various institutions be proactive, come together to understand what these reports mean? As a human resources person, I must ensure all the people get together on it before any tenders. It's suicidal to leave it to the last minute when you re-tender a bid.
GD: In 1992 CSR there were fewer environmental issues, but now there environment/health and safety, corporate responsibility, sustainability, social, community and so on. In 2006 all FTSE 100 companies put CSR information on their websites and 85 of these firms put out reports. So we need some standards here.
RG: Let's set ourselves a challenge today to put in place some standards. Otherwise it's simply company boards that will make these standards decisions.
Christine Taylor (CT): I think this has happened in Australia and maybe we should look at what they've done.
IF: Good standards evolve because people react to a crisis, like the Australians and a water shortage. They even have a government minister responsible for FM. Not only can you talk directly to government about FM but you can also talk to the official opposition.
AW: Until this rises to such crisis levels not much will happen. The Stern report noted that you are not penalised for being unsustainable and so until it's about money little will happen. Organisations don't change unless there is an imperative and we don't have these financial imperatives yet.
BS: I would disagree with that. The imperative is coming down supply chains. Large corporates are looking for their suppliers to demonstrate environmental responsibility.
Ben Murray (BM): We've moved on from box-ticking. Some large public and private sector procurement organisations were happy with a copy of the supplier's environmental policy stapled to the back of its bid and have registration of ISO 14001. But now clients want details, quantified actions about the outcomes of a supplier's own environmental policies. Staff, too, want to see changes, so suppliers have to do things more openly.
CH: This shows the complexity of it all with no standards.
AM: This is the paradox. CSR reporting is voluntary and yet companies spend thousands of pounds to produce reports.
KF: Interestingly, the psychology of environmental reporting is to make people feel proud of where they work and being part of an organisation that cares.
BM: There are two main reasons for looking at environmental performance. One is to win business and improve our credibility. The other is because staff demand it.
IF: I'd like to challenge Andrew [Mawson] about financial imperatives being a necessity. People power happened when customers insisted supermarkets sell organic goods. When I was head of location for HQ at IBM, I was inundated with questions about the grounds, food quality, Canada geese issues, etc. So we ran a monthly environmental newsletter, but the board stopped it. Yet six months later the board reinstated it because the people demanded it.
GL: Unfortunately, too many large firms look at what the stock market does today and not over, say five, 10 or 20 years.
IF: Family businesses, though, look long-term. In a large firm if you ask an MD to raise share price in three years, guess what they will focus on?
GL: But the question is how can I, as a person, influence my pension fund to act accordingly?
BM: Big oil firms are already pushing environmental issues down their supply chains. The government estate will be carbon-neutral - whatever that means - in 2012, all suppliers must report on their carbon footprint. Going down a legislation route is dangerous. There are already a large numbers of drivers. For example, reporting in a staff newsletter to enact behavioural change, or enacting environmental policies to attract potential clients. Statutory requirements to will make it more complex and difficult?
GD: People are already doing voluntarily things over above what might be legislated. Making reporting a legal requirement means people will do the minimum.
CT: If you have good data, you can report things any way you wish. Many clients now need the data to produce energy performance certificates by law. But knowing the data also identifies inefficiencies.
GD: With EPCs and forthcoming DECs (display energy certificates) we have a measurable, so how long before buildings are taxed accordingly?
Bernard Crouch (BC): What will happen if an organisation needs new blade servers that require a lot of energy? The imperative is these servers are very important to our business and that overrides other considerations.
AM: Interestingly, installing blade server means removing a lot of power and heat from other buildings and dealing with it in a more efficient way in a data centre.
RG: I know two large financial institutions that run workshops for all their suppliers, us included. They bring in outside experts to help us put together environmental policies and systems. It must be costing that client a fortune, not to mention our costs. But these are long-term contracts, not year-to-year renewable contracts.
CH: Is the solution that we take that long-term view?
RG: It helps. It can take a couple of years before a contract runs efficiently and a supplier has a good relationship with the client.
IF: I can't imagine that the Indians and Chinese are reporting quarterly on environmental issues yet. But imperatives will eventually drive them to do so, maybe not next year or the year after.
CH: I think we all agree that it is both a challenge and an opportunity. The challenge is to get the data, understand what it means and not just file it away. The opportunity is that it can raise the profile of the FM and get the ear of the board to understand what we can do for the business.