BLOG: The business case for sustainability – Holy Grail or Second Nature?
Having battled arctic conditions to make it to BAFTA’s iconic venue, our guests were issued with an emphatic call to action by UKGBC’s Chairman, David Partridge, Managing Partner of Argent LLP and James Gregory, Chief Financial Officer at JLL. The call was for all CEOs and CFOs of UKGBC’s member businesses to:
- Read our latest report on Capturing the value of Sustainability
- Adapt and adopt the value metrics within it
- Submit examples and case studies back to UKGBC for widespread dissemination
To achieve UKGBC’s ambition of making sustainable development second nature for all built environment professionals, we need the leaders of progressive businesses to boost the confidence of more sceptical businesses in this sector through compelling stories and hard evidence.
David’s view is that sustainability has become a mainstream topic for businesses that wish to be around for a long time. Given the severity of wealth inequality and the inexorable rise of nationalism, sustainable business today encompasses so much more than environmental efficiency and product design. Rather it requires a business mindset that puts social value and purpose at the heart of the development process, and puts its sustainable brand to work to attract more investment, talent and custom than any of its competitors. For millennials, environmental and social responsibility are non-negotiables rather than nice-to-haves and developers who create places that embody these values are, by definition, enhancing the competitiveness of their occupiers.
James on the other hand, a pragmatic numbers man, appreciates the clarity and credibility of articulating the value of sustainability to a business through pounds and column inches. Revenue is the lifeblood of a business so JLL started by measuring the value of proposals won and lost where sustainability was a procurement criteria. Another obvious driver is the link between cost savings on utilities and waste management compared to investment in manpower and technologies to reduce these. Less tangible but no less relevant are factors such as talent attraction, staff engagement, and brand perception which may determine a business’s long-term license to operate. So James is a firm believer that any upfront investment in sustainability will rapidly be outweighed by measurable business benefits.
Both of these inspiring leaders refer to a virtuous circle as investors themselves wake up to the links between sustainable outcomes and enhanced capital value, access to capital, and prolonged license to operate. Institutional investors in particular, who represent the interests of longer-term investors such as pension funds and insurance companies, are looking for investment propositions that deliver reduced obsolescence, resilient income streams, and hence future-proofed returns.
All of this suggests we are moving to an economic context where positive environmental and social outcomes are part and parcel of high performing assets, developments, and businesses. And the challenge to visionary CEOs, should they choose to accept it, is to articulate a sustainable vision, empower their teams to achieve it, and measure the success of doing so.
We at UKGBC passionately believe that commercial success and sustainable development go hand in hand. Please help us to demonstrate that far and wide by sending us your examples of sustainable value creation. Working together for a better built environment will help ensure we collectively reach our vision.
Julie Hirigoyen, CEO of UKGBC