Built environment: break with convention

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The built environment is a vibrant part of the global economy and one which
the accountancy profession can support to become more sustainable, accountable
and transparent.

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Buildings are one of the world’s main carbon emission culprits along with
transport and energy. They now account for 44% of the UK’s carbon emissions.
Domestic housing is the worst offender, emitting 26.5% of UK carbon, compared
with 13.3% from commercial buildings, according to figures published on Hansard.

And the majority – three quarters – of existing buildings fail to comply with
the most basic sustainability standards because they were built before a
buildings regulation called ‘Part L Building Regulations’ was introduced.

The government needs to support this sector through green financial and tax
incentives. But the most urgent aspect of dealing with carbon emissions, and not
just within the built environment, is for cohesive and consistent policy making.
The government must take a war cabinet approach to tackling climate change.
Indeed, earlier this year, Prince Charles told 1,000 business leaders that they
need to think of the Second World War when confronting this issue.

We know the enemy – carbon emissions – and we know what must be done – lower
them. We even have a target because government has already stated that carbon
emissions will be reduced by 20% by 2010.

ACCA wants sustainability targets to be measurable and achievable. The
government needs to work with all stakeholders to set ambitious and realistic
targets. But, most importantly, targets need to be quantifiable so they can be
managed.

At a recent conference hosted by property developers Quintain called Building
for a Low Carbon World, 90% of the attendees from business, finance and politics
pledged that their own organisations would measure and reduce their own carbon
footprint over the next 12 months.

Quintain CEO Adrian Wyatt said he ‘has come to believe that the way we build
and manage our urban communities is the key to saving the planet’. But building
and managing the urban environment takes money – and lots of it.

The former US president Bill Clinton’s global climate initiative is offering
some $5bn to renovate municipal buildings in cities worldwide. ABN Amro, Citi,
Deutsche Bank, JP Morgan Chase and UBS have all committed to offer $1bn in
funding to help with the programme. Ken Livingstone, the mayor of London, signed
up to the Clinton climate initiative, saying ‘the alliance will make it
financially feasible for cities to radically cut emissions from buildings’.

For feasible change, strong financial and tax incentives must be provided for
the built environment to both develop and upgrade existing buildings to be
‘greener’.

The cost differences between new builds and refurbishing buildings is huge,
so there should be different rates of incentives, depending on whether the
building is a new build or a refurbishment.

Also, the introduction of special business rates for those investors whose
buildings are compliant with particular levels of the green code would be a very
encouraging move.

Imaginative work is currently being done. Gordon Brown recently announced the
building of five ‘Brown Towns’ in the UK. Zero carbon building standards will be
used and, importantly, they will be exempt from stamp duty. This removal or
reduction of stamp duty for greener homes is a strong statement of government
commitment – but there is still a lot more that could be done.

Following the Stern report’s publication, the government established a new
commission to propose ways for Britain to lead the way in a low carbon economy.
But the most direct way to encourage businesses to take this issue seriously is
not necessarily through commissions, but through the introduction of the strong
fiscal incentives mentioned earlier.

Meanwhile, the big question ACCA is being asked is ‘when will sustainability
in the built environment be achieved?’ The simple answer to this is – as soon as
sustainability reporting is seen as a key business issue, and not just
greenwash.

The UK Companies Act of November 2006 should encourage integrated reporting,
especially because the resulting business review must contain forward-looking
statements, along with a description of what drives the companies’ performance.
For the first time, disclosures must be made on the organisations’ carbon
footprint and emissions.

Reporting in this transparent way – without any spin or green gimmicks – is
an excellent way for potential investors to discover whether a company is
responsible or not. It can also encourage investors, especially those involved
in the building industry, to take an interest and potentially invest.

The accountancy profession can see through gimmickry. As the years progress,
accountants will play a vital role in fighting climate change, and specifically
in integrating sustainability into the investment process.

KPMG’s new building

KPMG’s new headquarters in Canary Wharf is currently under construction and aims
to be completed by 2009.

The firm consulted The Carbon Trust, Waste & Resources Action Programme
(WRAP), Sustrans and the Building Research Establishment to help develop
environmental objectives for the new building.

The final plans boast a tri-generation boiler, which generates electricity,
and reuses energy to heat the building.

The mostly glass-clad building, according to impressionists’ images, will
also have a more efficient air conditioning system, that uses chilled beams
across the ceiling to cool the temperature, rather than the traditional fan coil
units.
Daylight Control is another key feature, linking the lighting system to natural
daylight so that staff make the best use of this natural light source.

In 2000, KPMG became the first professional services firm to have achieved
ISO 14001 certification for its buildings.

Source: KPMG

Allan Blewitt is chief executive of ACCA

Download the ‘Building a greener future’ report at
www.communities.gov.uk