Sustainability in Construction
This is the transcript of James Lee’s speech about sustainability which he gave at a recent construction seminar hosted by Cripps.
Sustainability is a hot topic at the moment as it is an area that has rapidly grown in importance over the last few years and, unfortunately, looks set to keep growing in the future as current environmental concerns, in particular, deepen.
The news this week, for example, has heavily featured the build-up to the Copenhagen summit on climate change, and it has been calculated that the built environment is responsible for 47% of the country’s carbon emissions, half of the water consumption, a third of landfill waste and a quarter of all raw materials used in the economy.
Although the term “sustainability” has been around for a long time, the current Government framework only started developing properly from 2005 with the launch of “Securing the Future”, the UK’s Sustainable Development Strategy. This gave rise to the Strategy for Sustainable Construction published in June 2008 which began to set out a clear policy on how both Government and industry must work together to achieve overarching sustainability targets.
Now, obviously, ten minutes is not a great deal of time to cover such a massive topic, so what I thought would be interesting is to focus on our experiences over the past year of the types of sustainability issues that are particularly being focused on.
We all hear the buzzwords, but what does sustainability actually mean in practice? How is it translating into actual legal obligations in contracts?
Well, the best place to start is to look at Central Government projects, because, in our experience, it is the Central Government departments that are really leading the way with these types of issues.
Indeed, it is particularly important for them as the Office of Government Commerce now contains a Centre of Expertise in Sustainable Procurement, with a Chief Sustainability Officer, who actively monitors and reports on each department’s performance against the targets devised for the Government’s Estate.
These targets revolve around three key themes:
(1) Climate change and energy – including carbon emission reduction, energy efficiency and renewable energy;
(2) Natural resource protection – including water conservation and the protection of biodiversity;
(3) Sustainable consumption and production – including waste reduction and recycling.
But, again, what do these mean in practice?
Clearly, one of the most important rating systems that is being used is the BREEAM system. For those of you in the room not familiar with this, the Building Research Establishment’s Environmental Assessment Method is a measure of best practice in environmental design and management.
Credits for the rating are awarded in 8 areas, including energy, water, materials and waste, and the rating of a building is judged according to the performance of the building in relation to those key areas.
It is Government policy that all new builds in the Government Estate achieve a rating of “Excellent” and all major refurbishments must achieve a rating of “Very Good”. Therefore, it is not surprising that the development agreement or building contract involved in a Government project usually contains an obligation on the developer or contractor to achieve a specific rating within this criteria.
(b) Energy Performance Certificates
Another crucial indicator that Central Government departments tend to look for is a good Energy Performance Certificate.
I am sure that most people in this room are familiar now with Energy Performance Certificates (indeed there was a talk on this subject when we last met a couple of years ago), so I do not propose to go into these in detail, but suffice to say, Energy Performance Certificates are required on the construction, sale or rent of all buildings now and Display Energy Certificates required in all public sector buildings larger than 1000 square metres.
In our experience, Government departments will be looking for buildings with the best possible ratings and will usually insist on at least an “Upper Quartile” rating when, for example, taking a lease of a building and will definitely insist on that rating when procuring a new building.
Some other provisions that we have seen Government departments insist upon in the past year have been:
• Stipulations that timber and other materials must come from sustainable sources (and, further, that the developer can prove this);
• A requirement that a Developer will use only clean and uncontaminated water;
• Obligations in relation to the protection of all streams and rivers within the vicinity of the site; and
• Commitments by the developer to reduce as far as possible the amount of waste ending up in landfill and to maximise as far as possible the amount of materials that are able to be recycled or reused.
In addition to these environmental provisions, however, the Government has also insisted on:
• Establishing appropriate procedures for ensuring that all members of the supply chain are treated fairly and paid promptly;
• An obligation on a developer not to allow any of its staff and members of its supply chain to engage in any lewd, sexist, racist or other offensive behaviour; and
• A requirement that a developer check that all people employed by it are registered with the Construction Skills Certification Scheme and that the building works are registered with the Considerate Constructors Scheme.
You can see from these examples that “sustainability” is therefore a very wide concept in the Government’s eyes. Rather than just focusing on environmental considerations, like carbon reduction and sourcing sustainable materials, the Government is also keen to ensure the sustainability and protection of the construction industry itself, such as the protection of workers and the supply chain.
So, that’s Government projects, but what about everybody else? Well, its true to say that, in our experience, private developers are not so comprehensive in their requirements (as you would probably expect), but the Government lead is certainly starting to filter down into private projects as well.
Perhaps the best example of this is reflected in the new JCT contract revisions which were published earlier this year and followed an industry-wide consultation last year. One of the driving factors behind the revisions was the desire to bring the contracts in line with the Government’s “Achieving Excellence” criteria.
Alongside other changes to the contracts, a key theme running through the new provisions is a focus on sustainability and environmental considerations.
In particular, there is the introduction of a new mechanism for the Contractor to propose changes for the improved environmental performance of the Works (although there is no express obligation on the Contractor to make any such proposals, which has been criticised in the press).
There is also a new obligation on the Contractor to provide any information requested by the Employer regarding the environmental impact of goods and materials selected by the Contractor.
The JCT Standard Building contract then goes one step further by including a new schedule of supplemental provisions (schedule 8) that will apply unless expressly excluded from the contract.
The new schedule firstly aims to encourage the use of value engineering to promote design efficiency, particularly in respect of reducing construction costs and projected life-cycle costs, and secondly, it has added in a reference to performance indicators being used, which aims to get the Employer thinking early about the types of performance indicators it should be requiring.
In its Guidance Note called “Building a sustainable future together”, the JCT quoted potential areas where performance targets could perhaps be considered. These areas included:
• Energy generation – e.g. having targets for the on-site production of energy;
• Energy consumption – e.g. having targets for energy used during the construction process and during the project’s life-cycle;
• Mains water consumption – i.e. the amount of water consumed by the construction process itself;
• Commercial vehicle movements – e.g. setting targets for transport miles in relation to specified materials;
• Health and safety – e.g. having targets for reducing accidents on site; and
• Training – e.g. providing training to reach specified skill levels.
Overall then, the new sustainability changes therefore form a framework of requirements rather than a set of prescriptive criteria, which aims to prompt employers into thinking about the types of sustainability requirements they should be considering.
So, that’s a very brief look at sustainability and the types of contractual provisions we are starting to see.
I haven’t even mentioned, for example, housing association requirements, such as the Code for Sustainable Homes and the Lifetime Homes standards, but it would be very interesting to hear your experiences of sustainability requirements in the Question and Answer Session later.
Reviewed in 2015