The nine biggest BREEAM mistakes clients make

Introduction

This post is part of a series of plain English Yonder communications, also featuring elements such as e-booklets, explaining the Building Research Establishment Environmental Assessment Method (BREEAM). That’s the world’s longest standing and most widely used scheme for assessing, rating, and certifying buildings’ sustainability.

The first of our posts, BREEAM Basics, provided an overview of the scheme, while the initial e-booklet explained the timeline leading to certification. So, if you’re new to the method, we’d recommend reading those materials before studying this one. Here, using our extensive insider knowledge, as experienced and successful BREEAM accredited professionals, we set out the nine biggest mistakes clients make. These can seriously impair their ability to secure the BREEAM rating they need, on-time, and within budget.

Mistake one: Not being aware of BREEAM section Material 01 (environmental impacts from construction products – building life cycle assessment)

Sorry for becoming a bit technical here but BREEAM section Material 01 is a vital part of the certification process and a major element in our own scope of work. As it covers construction projects’ environmental impacts, in practice it’s principally about emissions of carbon, which accounts for nearly all the greenhouse gasses developments produce. The Building Research Establishment (BRE), the organisation which developed and administers BREEAM, insists that Material 01 is addressed according to a strict timeline. This starts very early in a project’s existence, as the first life cycle assessment (LCA), covering the concept design, must be submitted before any planning application is filed with the local authority. Moreover, the information needed for that initial LCA is not normally readily available at this nascent stage of a project.

This double whammy, of an extremely early BREEAM submission requirement and the frequent need to make special provision for capturing the information needed, means it’s no exaggeration to say that most of our clients are caught out by Material 01.

Mistake two: Failing to anticipate a lack of alignment between local authority and BRE processes

It’s an unfortunate fact that local authority procedures concerning planning permission and the BRE’s process for securing BREEAM accreditation by no means always harmonise. Indeed, at times they can appear to conflict. This can cause technical issues and frustrations to the unwary. Too many clients fail to look ahead and anticipate the times when they’ll need to compromise between the two schemes or clearly favour one over the other for a period. Forewarned is forearmed and if you familiarise yourself with the two procedures and anticipate any such dilemmas they may present in the time ahead, you can be clear in advance about how you’ll resolve these and keep both shows on the road.

Mistake three: Neglecting to hire the BREEAM assessor or accredited professional early enough

It’s almost literally never too early to hire your BREEAM assessor or accredited professional. Elsewhere in this campaign, we’ve argued strongly that the appointment should at least be made before a project exits stage one of the Royal Institution of British Architects’ Plan of Work. The assessor or accredited professional can be a massive asset in the quest for a desired BREEAM rating and the sooner they’re on board, the greater the breadth and depth of the benefits they can deliver. If they’re in the team, with access not just to the client but all other stakeholders and project team members, virtually from the get-go, the chances of achieving the desired BREEAM rating increase almost exponentially.

Yet, we’re still appointed to many projects when it’s literally too late for us to change anything about them. In those circumstances, we can’t do much more than present information about work over which we’ve had no say in the best possible way and cross our fingers that the target level of accreditation will result. For clients, such a policy very often equates to self-inflicted damage.

Mistake four: Not understanding the BREEAM scheme, scope, and function of their project

When you register a project for BREEAM with the BRE, you must confirm its scheme, scope, and function. However, you can’t just do this using your own preferred descriptions, as there are a limited number of tightly defined BREEAM categories which can apply, and the options chosen must reflect the project’s reality. This can be something of a bear trap for the uninitiated, particularly where mixed-use developments are concerned. It’s not unusual that a developer, for example, fondly considers their project a mainly retail site, an emphasis which may be reflected in items such as marketing material. But when we ask to see architectural drawings or specifications to verify this, it becomes apparent that office accommodation will occupy a slightly greater area of the site than retail space and the former, therefore, is the applicable BREEAM function. Contradicting a client in this way doesn’t always make us popular with them but, as reclassifying BREEAM projects once they’ve been registered costs money, it’s in their interests that we do so.

Mistake five: Generating technical fails

Problems known in BREEAM parlance as “technical fails” can derail the entire quest for certification. One common cause is a building’s energy performance in practice falling short of the level expected at the pre-assessment. This type of fault is theoretically impossible in most projects, as they have tight specifications, stipulating matters such as all materials to be used and how each building service should be installed. But there can be considerable gaps between theory and practice, so unfortunately this kind of issue isn’t unknown.

Another type of technical fail we encounter involves clients falling foul of BREEAM’s management section, which requires evidence of timely project discussion and decision making to be produced, via documents such as contemporaneous email records and meeting minutes. Maintaining comprehensive proof of this kind can seem tiresome, but it’s a very important part of the BREEAM process. As this example illustrates, technical fails often only come to light when it’s too late to correct them, so it’s vital they’re avoided.

Mistake six: Failing to understand the BREEAM calculators

The BRE makes a range of tools available to people and organisations seeking BREEAM accreditations, intended to make things easier and help ensure the evidence they maintain is adequate. These include a series of calculators, covering various aspects of the scheme. Using these aids can seem straightforward but in practice is often more complicated than that and mistakes resulting from this misunderstanding can cause significant problems. We frequently encounter calculations clients have made using these devices where the totals initially seem reasonable but on closer inspection are all wrong. Revising every incorrect calculation can easily add a couple of weeks to the accreditation process, a fate an initial 15-minute phone conversation with us could have avoided. It’s therefore important that clients understand exactly what they’re doing before they start pushing buttons.

Mistake seven: Neglecting to ensure the BREEAM assessor or accredited professional knows who’s responsible for what

In this campaign’s blog post itemising five early actions clients can take to smooth the BEEAM process, we mention the desirability of a project kick-off meeting. We also explain the importance of this gathering determining clearly who is responsible for which BREEAM-related actions and when these should take place. It’s also vital that the assessor or accredited professional assigned to a project understands where these responsibilities lie. BREEAM certification requires literally hundreds of pieces of evidence to be produced about a development and some of these can easily go through five or six pairs of hands within the project team. Problems such as unnecessary delays can therefore be avoided through the assessor or accredited professional knowing clearly who their appropriate contact is for every element of the process.

Mistake eight: Not making full use of our commitment and expertise

We often come away from BREEAM projects feeling clients have not utilised our service to the maximum extent. The reality is that we’re as committed to securing the levels of accreditation needed as they are. We can help smooth the process, present information to the BRE in the most effective way, and are always extremely responsive, for example. Our assistance with the procedure is delivered partly through the many customised documents, such as schedules and checklists, we’ve produced, which help link the elements of the process together in a continuous, sequential, understandable narrative for clients. We’re also experts in taking information from clients and presenting it to the BRE in the form of documents such as validation statements which reflect its preferences exactly. On top of that, we’re always accessible by methods such as phone and email, to provide clients with jargon-free advice and explanations.

Mistake nine: Failing to keep certifications up to date

The BRE demands the possession of certain current external certifications for BREEAM accreditations to be awarded. These include the International Standards Organisation’s ISO 14001 for on-site management and materials, plus approved Environmental Product Declarations. Clients should therefore check their databases of such items regularly and ensure relevant certifications haven’t expired. Any need to renew these documents can literally put a quest for BREEAM accreditation back by months, so it’s important these oversights are avoided.

Want to know how to avoid these mistakes?

Click the button on the right to download the ‘BREEAM Timeline e-book’

If you want to know more about our expertise in helping organisations maximise their BREEAM ratings and how we can assist you with yours, please:

Write to us:

 

Yonder Consulting

Third Floor, Concordia Works

30 Sovereign Street

Leeds LS1 4BA


Five early actions to maximise your BREEAM score

Introduction

This post is part of a series of plain English Yonder communications, also featuring elements such as e-booklets, explaining the Building Research Establishment Environmental Assessment Method (BREEAM). That’s the world’s longest standing and most widely used scheme for assessing, rating, and certifying buildings’ sustainability.

The first of our posts, BREEAM Basics, provided an overview of the scheme, while the initial e-booklet explained the timeline leading to certification. So, if you’re new to the method, we’d recommend reading those materials before studying this one. Here, using our long and successful experience as BREEAM accredited professionals, we explain five actions you can take early in a building’s development that will smooth your path to success enormously.

But first some essential background information.

Preface: The Royal Institution of British Architects Plan of Work

The Royal Institution of British Architects (RIBA) Plan of Work specifies the eight major phases in any construction project, itemising key actions to be taken during each, and is very widely used within the industry.

One beauty of BREEAM is that every main task leading to certification falls neatly under one of the RIBA plan’s first seven headings, covering the period from strategic definition to building handover. We’ll therefore refer to the relationship between the two processes throughout this post.

Here’s a graphic showing how actions needed for BREEAM accreditation match the plan of work’s headings:

Following this pathway is always advisable. If you’re seeking a lofty BREEAM rating, such as Excellent or Outstanding, it’s virtually compulsory.

All those RIBA headings and the accompanying BREEAM tasks we’ve outlined conceal a myriad of detailed, technical work, however. So, please never view our graphic as an alternative to appointing experts, such as a BREEAM accredited professional, to help and advise you through the certification process.

Early action one: Don’t let BREEAM become an afterthought

You may think following a tried and tested plan like the one outlined in the previous section is so obviously sensible it would count as a no-brainer. But the reason we’re urging you to avoid BREEAM becoming an afterthought is it’s still too common for nothing scheme-related to happen prior to tender – at RIBA stages zero, one and two of a project. It’s then not unusual for the main contractor, who typically only becomes involved at stage three, to be instructed to obtain an impressive BREEAM rating, when the earlier inactivity has made that task far harder than it should be.

Indeed, it’s not that unusual for professionals intimately connected with construction projects to be unaware that they require BREEAM ratings at all. We often hear such operators say “I didn’t know there was a BREEAM on this” or words to that effect.

In fact, the BREEAM requirements of parties such as clients, investors, and local authorities should be clear at RIBA stage zero, when site appraisals take place. That means understanding whether the relevant council insists on a BREEAM Excellent rating if planning permission is to be granted where a development has an area of over 1,000 square metres, for example.

You should also make BREEAM an agenda item in all project team meetings, from RIBA stage zero onwards.

Early action two: Obtain advice from a senior operator experienced with BREEAM

Among other benefits, seeking guidance from a professional familiar with BREEAM from the outset will help ensure scheme-related content in those project team meetings is relevant. Achieving a desired BREEAM rating is very worthwhile, but the process is demanding and detailed, so you need to know at every stage exactly what you should be discussing. Involving someone with that kind of background will help ensure you cover everything you need to address at a given point and don’t waste valuable time talking about issues that don’t matter as much for the moment.

The person you consult doesn’t have to a BREEAM assessor or accredited professional, like one of Yonder’s experts, at stage zero. But you do need this level of expertise on board from stage one. Apart from anything else, an assessor or accredited professional will have up-to-date knowledge of, and information about, the scheme, which is modified and updated regularly. They’ll therefore help to ensure any BREEAM-related guidance you received earlier in the project or knowledge from previous developments is modified to match current scheme requirements, where necessary, for example.

A BREEAM assessor or accredited professional will also be able to mention any scheme updates in the pipeline that require early registration on your part.

Securing this expert advice early in a project can also pay dividends when it comes to issues such as determining whether yours is a bespoke development, for BREEAM purposes. A bespoke building is one that will contain unique functions or even a mix of functional spaces, such as shops, offices, and educational facilities.

Here, standard BREEAM evaluation criteria for more common projects, usually fulfilling only one function, obviously can’t apply. The Building Research Establishment, the organisation which developed and administers BREEAM, must therefore design a one-off framework. This will include the most criteria for all spaces in the development and a weighting in the final score for each type of accommodation, based on the proportion of the completed building it will comprise.

If yours is a bespoke project, you’ll experience delays and potentially much higher costs in achieving your BREEAM rating. Failing to know where you stand on this matter at RIBA stages zero or one can therefore put you seriously on the back foot, so obtaining guidance from an assessor or accredited professional could be crucial.

Early action three: Secure a BREEAM pre-assessment at RIBA stage one or two, as appropriate

Obtaining a BREEAM pre-assessment matters because it will set out in detail what you must do to achieve certification.

For most projects, leaving pre-assessments until RIBA stage two, the concept design phase, is fine, as the graphic in our preface suggested.

However, where masterplans are involved or BREEAM Outstanding ratings are required, the more prudent course is to obtain pre-assessments at stage one, with these being revisited at stage two. This is because establishing your wider strategy for obtaining BREEAM certification early can be especially crucial in these cases.

Stage one pre-assessments in such projects help ensure planning and pre-tender actions are carried out at the right times. They also clearly identify site weaknesses, which need to be compensated for, and therefore provide designers with ideas of what they must do or include during stage two. Architects in these projects also tend to appreciate stage one pre-assessments, as they mean less of their future work amounting to educated guesses.

Early action four: Ensure consultant appointments and quotes cover the BREEAM criteria

Once you’re clear about the desired level of BREEAM accreditation, from Pass to Outstanding, for your project, include this objective in the design brief and instructions for the development team. Each brief for every consultant should reiterate that aim and all concerned should be told to include the time and fees needed to achieve it in their quotations. You should also ensure relevant actions are included in documents such as scopes of work.

This advice covers, among others, third-party specialists in fields such as:

  • Ecology
  • Transport
  • Security
  • Acoustics
  • Energy assessment
  • Energy modelling
  • Main contracting
  • Architects
  • Building service engineering
  • Structural service engineering
  • Site management
  • Design
  • Project management

Ensuring all consultants understand what’s expected of them in this way will probably mean lowering the cost and improving the outcomes of your BREEAM process. One reason for this is appropriate actions, whether at desks or on-site, won’t have to be shoe-horned into the programme later.

Doing this should also avoid a situation where you, as a client, end up on the hook for an extra £100,000 or more – which can easily happen – because a BREEAM Excellent or Outstanding rating is needed but consultants’ original quotations have not reflected the full costs of achieving it.

Early action five: Investigate the pre-assessment’s risk items to ensure your targets are realistic

BREEAM requirements are often very demanding and detailed, so it’s frequently a mistake to blithely assume achieving your target level of accreditation will be easy or even possible. You shouldn’t, therefore, just pass the BREEAM pre-assessment on to the main contractor, as it may be too late to include key items for best value when they take control of the design.

Instead, check the risk elements identified in the pre-assessment against the current design yourself and decide honestly whether success is feasible. If so, you can incorporate what’s needed for BREEAM in the drawings, specifications, and contractual documents produced at the planning and tender stages. Adopting this approach will deliver the additional benefit of providing valuable evidence for your assessor that these matters have been addressed in a timely way.

See how we implement these actions to maximise BREEAM scores for our clients.

Click the button on the right to download the ‘BREEAM case studies e-book’

If you want to know more about our expertise in helping organisations maximise their BREEAM ratings and how we can assist you with yours, please:

Write to us:

 

Yonder Consulting

Third Floor, Concordia Works

30 Sovereign Street

Leeds LS1 4BA


BREEAM Basics

Introduction

Welcome to the first in our series of communications, also featuring elements such as e-booklets, explaining the Building Research Establishment Environmental Assessment Method (BREEAM). This is the world’s longest standing and most widely used scheme for assessing, rating, and certifying buildings’ sustainability.

BREEAM accreditation delivers many benefits to constructions’ stakeholders. It’s also rapidly becoming essential for non-domestic buildings in the UK, as it’s clearly valued highly by the market and arms of government, whose responsibilities include achieving the country’s legally binding target of net zero carbon emissions by 2050.

These audiences, and others, recognise the scheme presents a searching and wide-ranging test of a building’s environmental credentials, and not a mere box ticking exercise.
Since Yonder’s foundation in 2012, we’ve used our status as BREEAM accredited professionals to advise on and certify a staggering 12 per cent of all UK industrial buildings that have achieved scheme ratings. We can therefore justly claim to be the country’s foremost experts on maximising the BREEAM scores of clients’ buildings.

Our status and record demonstrate deep expertise in all aspects of environmental design, construction, and sustainability. They also confirm we have the knowledge and experience needed to translate BREEAM’s technical and academic criteria very effectively to the real world.

In this series of plain English materials, which assume no prior reader knowledge of BREEAM, we explain the method and answer important questions about it. These include who’s behind it, the features of a building it examines and how its process works. In this initial guide, we provide an overview of BREEAM, mentioning many aspects of the scheme that we’ll explore more deeply in future output.

What is BREEAM?

In a nutshell, BREEAM is a sustainability assessment methodology for constructions. After focusing initially on individual new buildings at the construction stage, the scheme has expanded massively during its lifetime of more than 30 years and now sets standards for environmental performance through buildings’ whole lifecycles, including the planning, design, specification, procurement, construction, and operational phases.

Versions of BREEAM currently apply to virtually any buildings, anywhere – including new or existing constructions, those undergoing refurbishment and fit-out projects, very unusual or multi-functional buildings, and even entire communities.

What are BREEAM’s objectives?

BREEAM aims to prompt groups such as building owners, occupiers, and designers to minimise the negative environmental effects of construction and development. The scheme’s goals include encouraging cost-effective sustainability enhancements and generating market recognition for organisations and buildings which adopt them.

When did BREEAM begin?

The scheme was launched in 1990, after two years in development.

Who’s behind BREEAM?

The Building Research Establishment (BRE) was a UK government national laboratory when it unveiled BREEAM. The organisation was privatised in 1997 and is now a centre for building science owned by a charity. It provides research, advice, training, testing, certification, and standards for public and private sector organisations in the UK and abroad. Based in Garston, Hertfordshire, the BRE has offices in Glasgow, Swansea, the US, the Middle East, India, and China. The organisation remains a vital part of the UK construction industry, especially in areas such as innovation, strategic direction, and translating the academic to the practical.

How popular is BREEAM?

Over 550,000 buildings have now been BREEAM-accredited and more than 2.25 million are registered for certification in over 80 countries worldwide. The method enjoys an about 80 per cent share of the European market for building sustainability accreditations and is by a country mile the most widely-used such scheme in the UK.

What does BREEAM scrutinise?

The BREEAM methodology seeks evidence of sustainable value in nine categories, namely:

Energy: In this respect, BREEAM essentially assesses whether a building is mean, lean, and green. It’s mean if its energy demand has been minimised through well-considered design and specification. It’s lean if the building can be used efficiently, via methods such as incorporating low energy fittings and avoiding operational waste – through accessible and meaningful sub-metering, for example. It’s green if it uses renewable and low or zero carbon technologies to make its environmental design and specification a reality.

Land use and ecology: This category looks at a building’s impact on local ecology and eco-systems, including how it integrates with them. It examines how well these factors were considered at each stage of the design process and whether they’re reflected adequately on-site. The scheme rewards constructions standing on previously developed or contaminated land, for example.

Water: This section scrutinises aspects such as whether a building uses water-efficient technologies, employs sub-metering, incorporates leak detection or prevention, and avoids unregulated wastage, via suitable design and technology.

Health and wellbeing: This criterion analyses how a project functions, internally and externally, as an environment in which people work or live. It examines features such as day lighting, external views, sunlight glare control, thermal performance, acoustics, site security and safety, and the provision of outdoor spaces for building users.

Pollution: Under this heading, a building’s impacts on aspects such as light, noise, air and water courses – including local drainage systems and infrastructure – are assessed, with a view to preventing increased flood risk, for example.

Transport: This category looks at whether a building facilitates sustainable transport, on-site and in aspects of its locality, including through the provision of facilities such as cycle storage spaces and car charging points.

Materials: This section scrutinises a building, its site, and its materials specification, rewarding factors such as enlightened procurement, durability and the designing out of waste.

Waste: This criterion examines aspects such as on-site waste efficiency, the use of recycled materials, and prevention of waste through perceptive design. It values features such as adaptability in the event of future climate change requirements or changing functional demands, for example.

Management: Under this heading, assessors analyse how a project is managed, specified, designed, delivered, and handed over.

Minimum standards must be met for energy, water, and waste but credits for the remaining categories can be traded and BREEAM is therefore somewhat flexible in its application.

Who assesses the buildings?

Independent licensed professionals. All BREEAM assessors and assessing organisations go through a training process validated by the UK Accreditation Service. This means they have the expertise to interpret BREEAM requirements and collect evidence showing the extent to which these have been implemented in-situ.

What’s the BREEAM process?

The assessors carry out two inspections of each development, using a wide range of science-based sustainability metrics, tools, and indices, all based on academic research. One assessment takes place at the design stage and leads to an interim certificate being issued. The other occurs after construction, following which a rating is determined and a final certificate awarded. 

How does BREEAM’s scoring work?

A development’s final BREEAM total results from each of the nine assessment criteria being scored on a percentage scale and multiplied by a set weighting.

Generally, BREEAM rewards most generously evidence of the more influential sustainability factors, such as reduced carbon emissions, low impact design, adaptation to climate change, ecological value, and biodiversity protection.

A building’s final total will place it in one of the following official categories:

  • Less than 30 per cent – Unclassified
  • 30 to 44 per cent – Pass (75 per cent of new non-domestic UK buildings achieve at least this level, which denotes standard good practice)
  • 45 to 54 per cent – Good (50 per cent of new non-domestic UK buildings achieve at least this level, which denotes intermediate good practice)
  • 55 to 69 per cent – Very good (25 per cent of new non-domestic UK buildings achieve at least this level, which denotes advanced good practice)
  • 70 to 85 per cent – Excellent (10 per cent of new non-domestic UK buildings achieve at least this level, which denotes best practice)
  • More than 85 per cent – Outstanding (less than one per cent of new non-domestic UK buildings achieve this level, which marks the development out as an innovator)

Is BREEAM ever updated?

Yes. The scheme is regularly revised, with a view to improving sustainability, responding to industry feedback, and supporting government environmental strategies and commitments.
There’s been a pattern over the years of the construction industry entering something approaching a panic over how it will meet tough new BREEAM standards, but within a few years routinely delivering these requirements.

That underlines how effective BREEAM has been in achieving its goal of pushing the sector towards more environmentally sustainable operation…not necessarily instantly, but over decades.

What’s BREEAM achieved?

Among the many achievements for which BREEAM can justly claim credit are:

  • Encouraging the insulation industry away from using blowing agents that deplete the ozone layer or have high global warming potential (the scheme is now attempting a similar feat over air conditioning refrigerants).
  • Persuading material makers to use certified environmental management systems and enhance continually their manufacturing and supply practices. This process has brought improvements from the cradle (which brings into play features such as forests and mines), through operations (where relevant considerations include durability, performance, and micro-pollution) to the grave (the stage at which questions are raised about issues such as recovery, reuse, and recycling).
  • Virtually mandating the use of key performance indicators concerning resource and waste efficiency in the main contracting sector.

Is BREEAM uniform internationally?

Not quite. For example, five European countries – Germany, the Netherlands, Norway, Sweden, and Spain – have developed their own BREEAM schemes, operated by national bodies. However, such variants must still comply with overarching requirements laid down in the Code for a Sustainable Built Environment, to ensure a level of consistency.

Why should we bother with BREEAM?

There are many benefits to be gained by achieving BREEAM certification.

These include the obvious advantages for the environment and groups such as occupants or local communities from the building refinements BREEAM encourages and rewards.

Almost equally evident are the reputational benefits for organisations associated with BREEAM-certified constructions, which can be reflected in aspects such as their marketing and promotional activity.

BREEAM’s findings also provide valuable baseline metrics for professionals such as building owners, designers and main contractors over features like embodied carbon, impact on biodiversity, energy or waste efficiency, and water use. These can be utilised as the basis for actions such as setting future performance targets.

Among the other reasons for pursuing the BREEAM accreditation are:

  • There’s accumulating evidence that BREEAM-certified buildings provide increased rates of return for investors, plus higher rental rates and sales premiums for developers and owners. A Maastricht University document, published by RICS Research, for example, has reported a study, conducted between 2000 and 2009, which found BREEAM-certified London office buildings achieved premiums of 21 per cent on transaction prices and 18 per cent on rents.
  • Many stakeholders – such as potential clients, tenants, and occupants – now demand BREEAM certification, so failure to obtain it can have decidedly adverse impacts on factors such as marketing, lettings, and profitability.
  • The UK government’s Construction Strategy requires environmental assessments are carried out on all public projects, with the aim of achieving BREEAM Excellent ratings or equivalent rankings in lesser used alternative systems.
  • Local councils now frequently stipulate BREEAM certification as part of their overall area plans or in planning conditions for individual developments.

Is BREEAM certification expensive?

No. Research by international physical asset management consultancy the Sweett Group into projects using BREEAM, for example, demonstrated sustainable options often added little or no capital cost to development projects. Moreover, where additional capital outlay was needed, it was often recouped through lower running expenses, meaning undertaking the BREEAM process saved money over a building’s lifetime.

Are BREEAM users happy with their experience?

Yes. Take a survey commissioned by energy management company Schneider Electric and undertaken by the UK not-for-profit membership organisation the Building Services Research & Information Association, for example. This questioned a wide range of companies that had used BREEAM and found:

  • 96 per cent would engage with it again
  • 88 per cent thought it was a good thing
  • 88 per cent would recommend it to others

Want to know more about achieving BREEAM certification?

Just click the button on the right to download our free ‘How to achieve BREEAM certification with ease e-book’

If you want to know more about our expertise in helping organisations maximise their BREEAM ratings and how we can assist you with yours, please:

Write to us:

 

Yonder Consulting

Third Floor, Concordia Works

30 Sovereign Street

Leeds LS1 4BA


What is ESG?

Introduction

This post is part of a series of plain English Yonder communications, also featuring elements such as e-booklets, explaining the Building Research Establishment Environmental Assessment Method (BREEAM). That’s the world’s longest standing and most widely used scheme for gauging, rating, and certifying buildings’ sustainability. We’re vastly experienced, successful BREEAM accredited professionals and assessors, with an outstanding track record of helping construction sector organisations achieve valuable certifications.

Achieving BREEAM accreditations is often a vital part of a company’s wider environmental, social and governance (ESG) credentials, on which our experts also advise. Here, we explain what ESG is, how it originated and what’s behind its rapid rise to prominence, among other matters.

What is ESG?

ESG is a holistic approach which seeks to evaluate the extent to which commercial organisations go beyond their historic purpose of maximising profits, by contributing to the achievement of desirable environmental, social and governance goals. That broadening of ambitions implies an extension of the stakeholders whom businesses seek to prioritise, from traditional equity investors alone to groups such as employees, suppliers, and society overall.

Environmental actions by companies can include reducing the waste, resource depletion and carbon emissions producing or consuming their products cause. Social practices might feature financial and other support for charities working to relieve human suffering or protect animal welfare. Governance performance may embrace policies covering corruption, remuneration and accountability, for example.

Professional ESG activity involves generating concrete strategies, policies, and reporting, demonstrating an organisation is maximising positive and minimising negative impacts in these three areas.

Corporate arguments in favour of ESG include that it can enable businesses to identify risks, ensure they meet future legal and compliance demands, enhance their access to funding and improve their reputations overall.

When did it all begin?

It’s now widely accepted the term ESG was first coined in a report called Who Cares Wins produced during 2004 by various financial organisations for the United Nations. However, ESG was a new description for various strands of established corporate practice, which certainly didn’t begin when it was born.

Indeed, there are records from at least as far back as the early 15th century of successful businesspeople donating sizeable proportions of their money to benefit the poor, for example.

More recently, forerunners of today’s ESG practitioners included retailer The Body Shop, which was already selling ethically sourced, cruelty-free products made from natural ingredients in the mid-1970s. They also featured Ben and Jerry’s ice cream, which was donating 7.5 percent of its pre-tax earnings to social causes as far back as 1985 and has long used environmentally-sound production methods.

Why has ESG risen in importance?

ESG, as a wide-ranging single approach to company performance, has been thrust into the corporate mainstream during the twenty-first century by various factors. Perhaps the most obvious has been growing worries about the potentially catastrophic effects of human-induced climate change, which corporations – sadly including construction sector organisations – have done much to cause. There’s also been a rise in concerns about corporate performance over issues such as the gender pay gap, employee hiring and firing, and executive salaries.

These, and other factors, have led to pressure on businesses to adopt sound ESG practices from powerful groups such as consumers and investors. These influencers are aware that many multinational businesses now have more power to make positive differences even than governments, for example.

The unveiling of the 17 United Nations’ Sustainable Development Goals in 2015 also provided a powerful shot in the arm for the trend towards ESG strategies and activities. These UN aims are widely perceived as a much-needed authoritative and comprehensive checklist of legitimate objectives, with which companies’ ESG policies and practices can align. The goals, designed to be achieved by 2030, include ambitions relating to poverty, hunger, health, and education.

How big is ESG now?

Very. It’s estimated, for example, that in 2019 sustainable investment assets under management totalled more than £25 trillion and capital worth about £15 billion went into ESG funds, an increase of over 500 per cent since 2015.

Does ESG have its critics?

Yes. But the carping usually relates to aspects such as the allegedly unwieldy breadth of the concept or its abuse by some unscrupulous companies and seldom to ESG activities themselves. Hardly anybody now doubts the desirability of using sustainable building materials, for example.

The criticisms come from people and organisations with various motivations but are usually easily answered. Here are some of the common ones and our responses to them.

There’s been “greenwashing”: There’s no doubt some businesses have seen ESG as an opportunity to launder reputations somewhat sullied by other aspects of their operations. However, there’s little particular to ESG in this approach, as companies with doubtful images – such as bookmakers and cigarette manufacturers – were seeking to balance perceptions in this way long before the term was uttered, through older vehicles such as sports sponsorships.

Conducted properly, by expert organisations such as Yonder, ESG evaluation offers very limited potential for “greenwashing”. This is because it involves elements such as specific targets and quantitative reporting – rather than flowery waffle – based on verifiable evidence, that confirm an organisation is responsible.

Some companies seek to mislead about their ESG activity and performance: It’s important to understand we’re not talking here about businesses truthfully accentuating the positive in vehicles such as their PR and marketing. This selective but factual communication is perfectly legitimate and something which companies have long practised.

What is not justified is businesses wilfully misleading important audiences, such as investors, about their ESG activity and performance. Where such misbehaviour is proved, miscreants should face the full force of legal and regulatory censure.

Even here, however, it should be recalled that ESG is hardly the only topic on which companies have been known to deceive outsiders and this dishonesty certainly didn’t begin when the concept emerged. Just look at the businesses who’ve found themselves in hot water through the decades over under-declaring their profits for tax purposes, for example.

There’s no universally accepted framework for gauging ESG effectiveness: Correct, and inconsistency between alternative available ESG measurement and evaluation frameworks has historically been a particular problem for groups such as investors, trying to distinguish the wood from the trees when it comes to placing their money.

Robust and widely accepted ESG frameworks were always going to take time to emerge, however, especially given the breadth of activities the heading can cover – including some in which performance evaluation hasn’t always been straightforward.

But, as the concept leaves its infancy behind, it’s now clear certain robust emerging frameworks are becoming ever-more widely adopted. These include those produced by the Global Reporting Initiative and the Task Force on Climate Related Financial Disclosures.

The term is simply too wide-ranging: Critics point to certain facts – such as despite the growth of ESG this century, carbon emissions have hardly reduced overall – as evidence the term simply covers too many bases.

There’s no doubt spreading corporate ESG resources too thinly is a potential problem. That’s why an ESG strategy – closely related to factors such as overall business objectives, company history, existing brand image and relevant current activity – is essential, particularly for an organisation of any size. This should lead to a focused and consistent set of interlinked ESG activities.

Our own consultative approach involves defining and scoping a client’s ESG policies and reporting closely, in terms of materiality. In other words, we include relevant actions with significant impacts, or which substantively affect stakeholders’ assessments and decisions. This leads to reporting which involves highly meaningful and comprehensive disclosure but is not overly broad and is therefore effective in furthering the company’s reputation.

Company ESG performance is sometimes contradictory: Agreed, but this is partly the inevitable consequence of businesses managing their transition to a world where ESG is much more important than previously. Where a company closes a quarry, for example, it’s positive environmentally but the organisation may have less enlightened social or governance policies. The ideal is for businesses to create balances between environmental, economic, and social factors – the three pillars of sustainability – but where this doesn’t happen, perhaps because they over-focus on one of these elements, it certainly doesn’t invalidate the whole ESG concept.

Does a BREEAM accreditation enhance a company’s ESG credentials?

Undoubtedly. You can discover more about how this happens in an e-booklet that’s another element in this campaign.

Want to know more about ESG?

Just click the button on the right to download our free ‘How BREEAM demonstrates ESG credentials e-book’

If you want to know more about our expertise in helping organisations maximise their BREEAM ratings and how we can assist you with yours, please:

Write to us:

 

Yonder Consulting

Third Floor, Concordia Works

30 Sovereign Street

Leeds LS1 4BA