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The cash case for green building


It is a fair bet that many of us finished the bank holiday weekend suffused in the warm glow of environmental good behaviour after distributing empty bottles, old newspapers, and garden rubbish among the skips at the local recycling centre.

But warm glows will soon be replaced by urgent necessity - for the pocket as well as the environment - as new European taxes start to bite and climate change can no longer be ignored.

Companies will have to do more than put a bin beside the photocopier for paper recycling or reuse a few bricks on a refurbishment project. The choice is to ignore the trend and pay through the nose in climate levy and a raft of other new fiscal measures, or rethink behaviour and make the environment positive for your business.

That was the message at research body BRE's annual conference last month, at an event entitled 'Working with the environment - delivering business benefit.'

For construction, says KPMG partner in sustainable advisory services David Coles, this means a complete change of business model based not on selling more and more but doing the work demonstrably more efficiently and less wastefully.

If not, there is a risk that City investors in construction company shares or pension fund clients for construction businesses will not deal with you, warned Antony Sampson, director of environmental management at insurance and investment group CGNU, which has adopted just such a policy.

The prospect of spiralling insurance claims from increased storm intensities and flood incidents has prompted CGNU and other insurers to lead the charge against global warming. Compulsory annual, audited environment reports are the answer, they say.

But is the City's big stick entirely fair?

Construction does have an enormous impact on the environment. It uses 260Mt of aggregates a year, creates 70Mt of waste and its completed buildings account for half the nation's total energy consumption.

But as BAA's recent Environment Awards demonstrated (NCE 15 March), the industry can be innovative when given the freedom to get to grips with environmental responsibilities.

And Ian Rothwell, Carillion's design manager for the privately financed Princess Margaret Hospital, highlighted at the BRE event how a sustainable approach to the building preserved resources and saved money.

But it is still rare for contractors and designers to be able to implement this type of thinking.

At the BRE event, Simons Group chairman Paul Hodgkinson suggested that KPMG and CGNU had finally realised that their previous investment models, complete with over prescriptive specifications, were no good. Investors were the problem as well as the solution, he said, questioning whether environmental conversion on one side of the business had filtered through to the other.

The answer was along the lines of: 'well it should have, but it may not, so keep trying'.

City clients may be starting to take a lead on the environment but the construction industry still has to make it happen. It is a bit rich for these same clients to warn now that if we fail we risk being penalised when investments next come up for review.

Jackie Whitelaw is managing editor of NCE.

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