• When ‘the business case’ gets exciting – With BDRV we’ve pulled all of our past work – and all the other examples we can find – into a single, flexible guide. We want practically any company to be able to find a financial technique which helps them on practically any decision. We’ve done this by aligning the types of business case for sustainability with the drivers of shareholder value, so it is universally applicable.
• workinproperty News: Balfour Beatty is to buy Parsons Brinckerhoff for £380m – "The acquisition of Parsons Brinckerhoff represents the realisation of a number of key strategic objectives for Balfour Beatty. In particular, we believe it makes us one of the world's major players in professional services, substantially strengthens our US presence and puts Balfour Beatty in an excellent position to take advantage of increased infrastructure spending. It is a key step in becoming a global integrated leader in infrastructure services."
• Women forced out by long hours and sexual harassment – 07/09/2009 – Contract Journal – Damning report: "Women managers experience challenges not faced by their male counterparts because of the dominant masculinist ethos of corporate management culture that privileges men, ranks some men above others and places women on the periphery of the managerial class."
  I have some great tales, including the one where one senior manager accused our branch office of too high a proportion of admin staff (as obviously we couldn't possibly have 3 female engineers). Fun times ;o)
• The Market LEEDer | GreenerBuildings.com – Fantastic rebuttal to the anti-LEED post NYT article brigade (read the whole thing): "I mean, heaven forbid that we update the energy conversation from the '80s when it was all about operations. Depending on the building, the induced transportation energy, the embodied energy of the materials or the energy to provide and process water (which outside of the building requires almost 4 percent of the nation's TOTAL energy!), can exceed the operational energy, all of which LEED addresses directly or indirectly. Everyone agrees that LEED is not perfect and frankly it never will be because "perfect" is a relative term, not an absolute (theological discussions aside)."
• FT.com / Global Economy – France to count happiness in GDP – "The commission suggested a series of improvements to the way GDP was measured. It proposed accounting for people’s well-being and the sustainability of a country’s economy and natural resources. “The world over, citizens think we are lying to them, that the figures are wrong, that they are manipulated,” said the president. “And they have reasons to think like that. "
• EU to introduce new indicator to complement GDP – "The European Union will introduce an index in 2010 to track life qualities such as a clean environment, social cohesion and wellbeing to complement the gross domestic product (GDP) indicator in shaping policy.
  The environmental index will chart progress in areas such as greenhouse gas emissions, pollution, water use and waste generation to better reflect economic and social progress, European Environment Commissioner Stavros Dimas said on Tuesday. "
• Modern Built Environment Knowledge Transfer Network secures funding until 2012 – Good news: "The MBE-KTN is delighted to announce that it has secured a further three years of funding from the Government's Technology Strategy Board. The funding will enable the network to build on its success in stimulating increased innovation across the whole built environment supply chain for real business benefit."
• BRE :: News – Who will win in the global market of building accreditation? It's like the board game Risk – BREEAM have just taken Russia: "BRE Global has signed an agreement with the Russian Green Building Council for the adoption of BREEAM. The agreement will accelerate the development of BREEAM for the Russian market." But will LEED take Kamchatka?
• BREEAM Bespoke to become BREEAM other Buildings – Sustainability Blog – New blogger on the block, BREEAMER, outlines the changes to BREEAM Bespoke (now to be known as BREEAM Other Buildings).

• Sustainable Homes – This could open the doors for more LA's to impose CSH (and BREEAM?) levels for planning conditions: "Chelmsford Borough Council requires that Code for Sustainable Homes Level 3 is achieved as a planning condition for new buildings. The developer appealed against this condition but following consideration by the Planning Inspectorate the condition was held as "reasonable and necessary"."
• House 2.0: On triple glazing – Mark Brinkley warming to the idea of Passivhaus: "comfort underlies the PassivHaus take on triple glazing. I have been a voice arguing that triple glazing is “overkill” in the UK climate and that the energy used in making these units would probably never be repaid by the energy saved over their lifetime. However, the main reason for using triple glazing is not to save energy but to provide more comfort, as the internal temperatures remain more even.
  Feist produced a table showing what the temperature differences were close to different forms of glazing when the internal temperature is designed to maintain at around 21°C and the external temperature drops to —5°C.
  • next to a single glazed window, the adjacent temperature is around 1°C
  • next to a double glazed window (2000 vintage), the adjacent temperature is around 11°C
  • next to a triple glazed window, with a centre pane U value of just 0.65, the temperature is 18°C."
• Portland Architecture: A man struggling: Guy Battle comes to Portland – Guy stands up for engineers: "Do engineers deserve more credit?
  Yes, I think so. Engineering is the hidden hand. They have an enormous amount to contribute to architecture, but too often their contribution is gently put to one side. I think it’s something that should be celebrated. You look at someone like Peter Rice or Neil Thomas, Chris Wise, Guy Nordenson, and a host of other fantastic engineers, and they don’t really get the recognition they deserve."
• Ashden Awards (Jonathon Porritt) – Kirklees (again): "Kirklees Metropolitan Borough Council – one of the unsung heroes of local government who have been doing their "sustainability bit" for the last 20 years. But their current home insulation initiative has really made people sit up and listen as it has succeeded in achieving real scale – where so many of the current measures are just picking around at the edges. Here’s what the Award citation said:
  "In 2007, Kirklees Council committed £10 million to providing free loft and cavity-wall insulation for every home in the borough where it can be used. The scheme targets one council ward at a time, using the local Councillor and local advertising, then individual home visits by assessors. By May 2009, 66,000 out of the 172,000 households in the borough had been assessed, 54,000 referred for surveys, 26,000 surveys had been completed, and 21,000 had insulation installed. This avoids an estimated 18,000 tonnes a year of CO2. 140 jobs have been created by the scheme.""
• Cutting carbon with smart finance | Forum For The Future – Innovative financing examples: "For instance, Kirklees’ Re-Charge scheme loans householders money to install low-carbon technologies in their property, such as solar panels to heat water. It is successful because there are no interest charges and the money does not have to be repaid until the property is sold. The council only has to subsidise the interest on the loans and this costs around three times less per home than using a grant scheme."
• FT.com / Weekend columnists / Tim Harford – Carbon footprinting: time to pick up the pace – The ever lucid Tim Harford:"The carbon-footprinting process often produces surprises. An environmentally conscious consumer in the crisps aisle of the supermarket will probably be thinking about packaging or “food miles”. The Carbon Trust reckons that about 1 per cent of the climate impact of a packet of crisps is from moving potatoes around. The largest single culprit is the production of the nitrogen fertiliser, and half of the climate impact in general takes place at the agricultural stage. The point is not that agriculture is always the problem, but that it is very hard for a well-meaning consumer to work out what the green purchasing decision actually is. For this reason, the Carbon Trust has a carbon labelling scheme. The trouble is that many consumers simply do not care enough to pay more or choose a less enjoyable product simply because of the low carbon label."
• Ground Control | PD Smith | Kafka’s mouse – Minton's book duly added to my wishlist. Review: "Sections of our city centres are being sold off to private developers to create shopping monocultures such as Westfield London or "malls without walls" like Stratford City, which is being built for the 2012 Olympics and is one of the largest retail-led developments in Europe. It is, says Minton, "a private city within a city" and represents a return to the early 19th century when aristocrats owned great swathes of London, fortifying their estates of up-market housing with gates and private security forces.
  Now, “land and property which has been in public hands for 150 years or more is moving back into private hands”. Minton argues that today’s privatised city centres and gated communities are fostering "a new culture of authoritarianism and control"."
• Market Research Strategies – Excellent article on generating leads in a down turn market. Primarily aimed at US architects, but easily relatable to UK and engineers/consultants.

Once embarking down this road, a number of key questions need to be answered, not least of all: “which discount rate to use?” which is something Casey touched upon here a little while back. It seems the industry is need of guidance, so that we are all singing from the same hymn sheet, as it were.

Anyone know of any agreed figures out there?

Is anyone else tired of going to presentations and seminars and having poor old Gro Harlem Brundtland’s definition of sustainable development thrust upon us – yet again? Or is it just me? The definition originates from the 1987 Brundtland Report, “Our Common Future“, and is widely used by the government in the UK:

‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’

This definition neatly packages together what Dyllick and Hockerts call the three challenges facing humanity: economic growth, social equity and the carrying capacity of natural systems. The premise of sustainable development is that these three types of capital; social, economic and natural; must all be considered in relation to each other – the ‘triple bottom line’.

Back in January 2007 Amy Stodghill posted a great history of sustainable development definitions here. The long definition from the Brudtland report is:

The pursuit of sustainable development requires:

· A political system that secures effective citizen participation in decision making

· An economic system that is able to generate surpluses and technical knowledge on a self-reliant and sustained basis

· A social system that provides for solutions for the tensions arising from disharmonious development

· A production system that respects the obligation to preserve the ecological base for development

· A technological system that can search continuously for new solutions

· An international system that fosters sustainable patterns of trade and finance

· An administrative system that is flexible and has the capacity for self correction”

(p.74 Report of the World Commission on Environment and Development. “Our Common Future” 4 August 1987. United Nations. A/42/427)

In practice, despite 20 years of having the Brundtland definition, the aspect most likely to be concentrated on by both individuals and companies is eco-efficiency.

The model above was developed by Dyllick and Hockerts. In part II, I intend to look at this in a little more detail (no promises as to a time scale on that I’m afraid…). In the meantime, feel free to use this a launching pad for you to research the issue in more detail yourself.

  Great piece over at BD by Paul Morrell on why companies sell up. I agree with most of what he says, although I do think that listed companies provide a transparency (with regards to published information, accounts etc) which professional services partnership does not necessarily have. The industry is predominantly not publically listed. Here’s a snippet from some research* I did for my MBA dissertation (it will be slightly out of date by now):

  Companies in the UK have been identified by using the Standard Industrial Classification (SIC) of Economic Activities codes. The relevant SIC code for the industry is Group K Real Estate, Renting and Business Activities, 74.20 Architectural and engineering activities and related technical consultancy

  The subcategory for engineering consultancy is 74.20/4: Engineering consultative and design activities. This subclass includes:

  - advisory and consultative engineering activities

  - engineering design activities for:

  . the construction of foundations and building structures

  . mechanical and electrical installations for buildings

  . the construction of civil engineering works

  Searching under ICC Plum database, there are 26,306 companies employing 225,000 people in the UK classified under 74.20, of which 956 are under 74.20/4. Of these, only 14 are quoted on the stock exchange. Around 60 have opted for LLP status. The vast majority are private limited companies with share capital (over 750). This means quality publicly available information is in limited supply, making financial comparisons difficult and unreliable.

 The point I liked most about Paul’s piece was the bullsh*t fed to the staff about why the management are making the move towards raising capital:

  Nor is selling the business necessary to share those rewards more broadly, so please don’t say it is for the good of the staff — who see both the prospects of advancement and the direction of the firm move further away.

  So if you work for a practice whose partners dribble out that message, give ’em a spank while it’s still legal.

  Yep. Been there. Tell the truth – the founding members are ready to retire and want to make some cash to sit out their dotage on. A recent case springs to mind…

  *Use this data at your own risk, blah, blah, blah…

Q: how much has been allocated to the Energy Performance Certificates scheme for (a) start-up costs and (b) 2007-08?

A:The Department has allocated some £1.96 million to start-up costs for the Energy Performance Certificates scheme. This money is required to put into place the necessary systems and calculation methodologies to support introduction of energy certificates and to develop guidance, qualifications and quality assurance frameworks for energy assessors. The allocations for 2007-08 are currently under consideration.

I assume this includes the upcoming public buildings, as well as housing.

Q : how many qualified (a) home inspectors and (b) domestic energy assessors there are on the (i) Buildings Research Establishment, (ii) Royal Institution of Chartered Surveyors and (iii) SAVA Government-accredited schemes?

A: As at 23 March there were 1,085 home inspector candidates who had successfully passed their exam. There were over 3,000 DEA candidates who were in or about to begin training, all of whom could qualify by June.

Accreditation schemes for domestic energy assessors are in the process of being approved by the Secretary of State, and will receive formal approval shortly. As no approval has yet been made details cannot be provided.

Still no formal approval!  Cutting it a bit tight, aren’t they?

Q: what funding her (Yvette Cooper) Department provides to government-accredited schemes to train (a) home inspectors and (b) domestic energy assessors?

A: No public funding has been provided to the commercial companies currently offering training courses to prospective home inspectors and domestic energy assessors.

The trainees themselves are responsible for payment of their own fees, but have access to the range of Government-backed schemes such as career development loans which are available to those wishing to upgrade their skills or undertake a new career.

Q: how many lenders offer a green mortgage in preparation for the introduction of energy performance estimates?

A: We are aware of four lending bodies who currently offer ‘green mortgage’ products, others have said they are interested in developing products. As the Chancellor stated in the Budget, the Government expect the introduction of Energy Performance Certificates and other initiatives to provide the potential for the market for ‘green’ financial products to develop further.

She hasn’t said who they are – anyone know?

Unrelated to EPC’s, but relevant to housing and obviously asked due to the impending merger of HC and EP:

Q: how much land is owned by (a) the Housing Corporation and (b) English Partnerships; and what estimate she (Yvette Cooper) has made of its value.

A: The Housing Corporation predominantly pursues its objectives through the provision of grant funding and does not currently own any land.

English Partnerships, the national regeneration agency, owns over 8,000 hectares of land being held for phased redevelopment and disposal, with an estimated market value of £1,838 million as at March 2006.

Nearly £2 billion of land in the coffers – good news for BREEAM and EcoHomes/Code for Sustainable Houses.  EP land requires a ‘Very Good’ certification as minimum or 3 star for CSH.

…we now have a big three, firms that can only get stronger. In the FTSE-100 companies have access to tracker funds, meaning that it is far easier for them to raise extra finance. The cost savings they will generate through redundancies and merging operations will mean that they can prove their financial prudence to lenders, who will happily throw them cash given the seemingly endless price boom.

The big 3 in question are Persimmon (already on the FTSE100 – PSN), Barratt (BDEV – FTSE 250) and the potential Taylor Wimpey (Taylor Woodrow – TWOD – FTSE 250) (Wimpey – WMPY – FTSE 250). Kotler ‘s rule of thumb is that a bigger market share can lead to a bigger profit for a company up to a ceiling of 40%. Companies with market shares of less than 10% have little influence on price changes, new services and promotional intensity. The top 4 companies accounted for almost 50% of the market in 2006 (48%), each being between 10% and 13.5%, meaning a true oligopoly.  However, even with Taylor Wimpey combined, we’re looking at 25% – no individual company would be near the ‘danger’ mark of 40%.

I’ve just been trawling through data from Building’s housebuilders league table for 2006. This graph shows why Barratt and Taylor Wimpey are keen to follow Persimmon into the big league:

click to enlarge

The pink line is the profitability, ranging from over 38% for McCarthy Stone to only 10% at the other end of the market. Note Persimmon are sitting on 23.1%, significantly more than Barratt (16.4%), Taylor Woodrow (15.7%) and Wimpey (14.6%). The blue bars are turnover (look at what’s going to happen if Taylor Wimpey is pulled off – likely to be more than double the next two rivals combined).

Whilst shareholders might be delighted with the increasing price of shares following the news, it’s worth remembering that mergers are not always as successful as they could be (Tichy, 2001:

no more than a quarter of the mergers increase consumer welfare; another quarter increase profits at the cost of consumers; half of the mergers reduce the value of the firm. Targets’ shareholders win, while bidders’ shareholders break even upon the announcement of a merger, but lose significantly in the long run. Seen relatively, horizontal mergers fare best, especially if they are focus-increasing. Cash-financed mergers fare better than stock-financed and strategic mergers fare better than financial ones.

At this point, I would have loved to have been able to say that going green is more profitable. IMO, Crest Nicholson are one of the ‘greenest’ major housebuilders. Disappointingly, although listed in FTSE 250 too, last year’s profits were only 13.3%.

Details of a review of how the UK can make the most of the key opportunities that environmental protection can present for wealth creation and employment growth were released by the Government today (Wed).

Environment Secretary David Miliband and Trade and Industry Secretary Alistair Darling will jointly chair a Commission on Environmental Markets and Economic Performance. Members of the Commission will be drawn from business, NGO’s, academia, trade unions and public sector organisations.

It will report to Government next spring, and will make recommendations on how to further stimulate sectors that can make a significant contribution to environmental outcomes and productivity.

The new Commission will be able to draw on the latest figures for the size of the environmental goods and services sector, published today by the joint Defra-DTI funded Environmental Industries Unit. These confirm a current annual turnover for the sector of more than £25 billion (based on 2004 data) and estimate that this will increase to more than £34 billion by 2010 and £46 billion by 2015.

Mr Miliband said:

“Climate change is a serious threat but also a business opportunity. There are jobs and wealth to be created in reducing greenhouse gas emissions, as there are in tackling other environmental problems.

“In a world where energy and carbon emissions are constrained, every business must take resource productivity seriously as a source of competitive advantage. Every industry should become an environmental industry – and environmental principles must permeate beyond traditional environmental sectors.

“This Commission will use its diverse expertise to investigate how the environmental goods and services sector might evolve in this direction in future, and the roles of both Government and business in bringing about that transition.”

Mr Darling said:

“The Stern analysis has made our choice clear: either transform our economy to reduce our impact on the environment or face a far higher cost if we fail to act until too late.

“The whole world must move to a low carbon economy. This green industrial revolution presents the opportunity for new goods, new services, new capital markets and new jobs. We need to harness the opportunities to make sure British business leads this revolution.

“Our recent report shows these industries could double in size in the next decade to £46bn in the UK alone.

“The Commission we’re setting up today will draw on a wide range of experience from industry, academia and the unions to look at how we make the most of our excellence in science, technology and innovation to meet this challenge.”

It will build on the work of the business-led Environmental Innovations Advisory Group (EIAG), which has today published a report on making the UK the best place in the world for environmental innovation. The Report sets out EIAG’s analysis of the issues and solutions, and progress in tackling barriers to innovation in key areas such as regulation, finance, technology and skills.

In Canada, green buildings are happier more productive buildings:

One study of a green renovation to the post office in Reno, Nevada, found that the $500,000 cost was offset by productivity improvements in the first year — with energy savings as an extra bonus.

Brad Pitt is waving the green flag on US TV on PBS:

Pitt starts each episode with a rhetorical introduction: “They use 40% of the world’s energy and emit 50% of its greenhouse gases. They are not the cars we drive. They are the buildings we work, live and grow in.” Those statistics aren’t new, but they don’t seem to have completely sunk in yet, particularly with the environmental activists who continue to make the SUV the bête noire of the green movement.

And some good news regarding the seemingly unstoppable expanding economies of India China and Brazil and their impact on carbon. This report thinks it’s not too late to help out and with the right finance, structure things in a way which will reduce emissions:

“Rapidly developing countries such as China, India and Brazil need many people and consulting firms to do that same thing at the level of an industrial facility or apartment building, for example, to identify energy efficiencies across the board and exploit large-scale energy use reduction opportunities, and enlightened banks to finance them.”

And finally, CIPFA will be officially launching ‘Sustainability: A Reporting Framework for the Public Services’ at the CIPFA Annual Conference in Harrogate on Thursday 15 June.

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