CPD Module 2 : Facilities management and sustainability – Is it business as usual?

One way the property sector can respond to this is by using energy more efficiently in commercial buildings. However, for the facilities managers who run these buildings, this is nothing new: they have always focused on using resources more efficiently. This raises the question about whether sustainability is a big issue for facilities management, or just the same thing they’ve always done wrapped up in new ‘green’ packaging.

A look at some basic definitions shows that there is significant overlap between these areas.

Definitions and overlap:

One widely accepted definition of sustainability, as discussed in the first article of this series (Property Week, 13.01.12), comes from the Brundtland Commission of the United Nations on 20 March 1987. Development is seen as ‘sustainable’ if it “meets the needs of the present without compromising the ability of future generations to meet their own needs”. Resources should be used to benefit businesses now and in the future, in a way that benefits society.

As for facilities management, the British Institute of Facilities Management (BIFM) has adopted the definition of Facilities Management (FM) provided by the European Committee for Standardisation and has been ratified by the British Standards Institution. It says: “Facilities management is the integration of processes within an organization to maintain and develop the agreed services which support and improve the effectiveness of its primary activities.”

This definition is the closest available to capturing the purpose of FM, which involves seeking to align resources with the changing needs of the business. Facilities managers who understand the needs of the business can also help them provide an environment in which the business can achieve its goals. They can do this by using the right resources, including energy, in the most effective, efficient and economical way.

The problem with trying to construct a definition of FM is that it is an area that is complex and ever-changing. It brings in diverse areas such as environment, organisation, construction, space-planning, building and structural framework, and intelligent infrastructure.

A quick scan over the definitions of facilities management since 1980 shows how perceptions of the role of the facilities manager have changed. Early definitions focused on the physical structure of the workplace and how to coordinate this with the organisation’s people and work. These early definitions missed the link between FM and achieving the organisation’s objectives.

Later definitions moved closer to recognising the vital contribution FM should make to improving business performance. It now involved the active management of business support services and how they were coordinated with the organisation’s human resources and buildings, including their systems, plant, IT equipment, fittings and furniture. All these are designed to assist that organisation best achieve its strategic objectives.

At a national level, FM has a strategic objective of providing appropriate infrastructure and logistic support to the ‘business’. At a local level, the objectives are more managerial and operational: the effective management of facility resources and services to provide support environments which includes suppliers and customers.

Generally then, the nature of the facilities management provision should vary according to the state of the business world. It is this business horizon that has changed again in seeking to embrace sustainability, and the risks to the business from its resource use have increased. These additional risks have to be identified and removed, or mitigated and managed.

However, facilities management has always been about resource use. The significant overlap between these areas is enough to raise the question about whether sustainability is a serious and new issue for facilities managers at all.

What the official bodies say:

A good place to start addressing this question is looking at the pronouncements on these issues of two of their more prominent local and international professional bodies: BIFM and the International Facility Management Association (IFMA) respectively.

In 2007, the BIFM launched a joint initiative with the University of Reading, the annual Sustainability in FM Survey. In 2011, its findings are based on the responses of 410 FM, up from 268 in 2010.

This research showed that 91% of those who responded said their organisation did have established policies on sustainability or corporate social responsibility. Seven out of ten said their organisation saw sustainability issues as extremely significant or very significant.

The main reason for this, identified by 98% of those questioned, was the impact that failing on these issues could have on corporate image (see graph 1). The least significant pressure came from shareholders: only 55% said they were either extremely significant or very significant in driving these changes. Even so, the range of reasons driving sustainability in businesses shows how businesses are coming under pressure from a wide range of sources.

They also identified that the pressure is increasing (table 2). In 2011, 98% said they saw this issue as important, very significant or extremely significant, compared with 61% in 2010. This shows that facilities managers are coming under greater pressure over sustainability issues.

But there are constraints to being able to respond to these pressures (table 3). The major obstacles come from physical constraints of the building, making it difficult to incorporate ‘green’ technology, with 80% of those questioned coming up against this challenge. Financial constraints and lack of engagement in the organization were also seen as major challenges.

The BIFM research appears to emphasise how the risk to the business of not being seen to be addressing sustainability proactively is actually driving the sustainability agenda. The realisation has formed that the potential risk to the business from the sustainability agenda is significant. As is usually the case, this perceived risk has galvanised corporate action to address those sustainability risks that could seriously damage the business.

It is worthy of note that increasingly over even the last three years it has emerged that:

1. Facilities managers play a key role in helping businesses manage sustainability;
2. Businesses are embracing those sustainability issues that could impact negatively on business performance;
3. Facilities managers are increasingly being identified as the natural mitigators and managers of this latest group of risks to enter the company risks register; and that
4. Facilities managers are facing some big problems in trying to address these sustainability risk issues.

More broadly, IFMA has launched its Sustainability Facility Professional (SFP) credential programme. This is designed to enable facilities managers to improve the sustainability of their facilities by improving their knowledge and understand of these issues.

The fact that these two major facilities management bodies are taking this issue seriously shows that this is regarded as a business risk.

Quantifying this risk

This business risk takes on added significance because businesses are attempting to quantify how much they stand to gain or lose through engaging in this sustainability phenomenon. One of the most prevalent standards comes from the Global Reporting Initiative, which aims to establish sustainability reporting alongside financial reporting.

Such attempts to quantify business risks associated with sustainability issues are variously referred to using terms including ‘corporate social responsibility (CSR)’ reporting, and ‘triple bottom line (TBL)’ reporting. In the UK, the private sector favours CSR, perhaps because the ‘social’ emphasises the benefits to social groups external to the business.

One aim of these reports for businesses is to demonstrate their commitment to minimising risk by demonstrating due diligence in its management of sustainability as a business risk. This is considered to improve stakeholder relations, which makes it easier to attract capital investment and thereby positively affect the share price. It can also be seen as a way of trying to attract socially responsible investors and thereby reduce the costs of equity.

In February 2012, Siemens published its Green League report, based on a survey of over 600 UK businesses. That research showed company directors are more confident about the efforts their company is taking on sustainability issues than energy managers operating on the frontline: one third of energy managers believe their organisation is not doing enough.

Around 30% of directors blamed a lack of perceived return on investment for hampering a commitment to energy efficiency measures. However, with 70% of businesses reporting that investment is planned in energy efficiency projects in the next three years, it does seem that businesses are beginning to recognise that high energy costs will remain. Therefore, it will benefit all businesses to look at the potential savings by managing energy use better.

While businesses are measuring these risks, we saw earlier that facilities managers face major challenges in trying to implement these plans. How can they overcome them?

Best practice

Best practice sustainability management is gathering pace and is, to a great extent, the responsibility of facilities managers. The driving factor behind this is the need to ensure they are managing the risk that the sustainability agenda can pose to their business.

To meet this growing agenda, the BIFM has suggested that organisations and facilities managers need to improve their knowledge and experience in sustainability issues, and keep them up to date. It also said that professional institutions and other organisations need to enable their members to pick up this knowledge from relevant research.

Meanwhile, the IFMA has advised facilities managers to study for its Sustainability Facility Professional status. It says this would achieve four aims:

1. To provide the highest value for their facility, organisation and community;
2. To balance the sustainability and corporate mission in their organisation;
3. To implement best practices to the benefit of the economic, environmental and social bottom lines of the organisation; and
4. To earn the organisation a competitive advantage over rivals.

Sustainability is crucial for companies as they head into a more eco-conscious world, but it should not keep facilities managers awake at night. Facilities managers are always striving to create and manage environments that support the needs of the businesses that occupy them. For these professionals, sustainability is a business risk and it must be managed accordingly.