Outline• Integrated Sustainability Reporting• Impact and Implications for Facilities Managers• Case Studies
From Annual Report to SustainabilityReport to an Integrated Report………..
“To make our economy sustainable we have to relearneverything we have learnt from the past.That means making more from less and ensuring thatgovernance, strategy and sustainability are inseparable.Integrated Reporting builds on the practice of FinancialReporting, and Environmental, Social and Governance-or ESG/Sustainability – Reporting, and equips companiesto strategically manage their operations, brand andreputation to stakeholders and be better prepared tomanage any risk that may compromise the long-termsustainability of the business”Professor Mervyn King, Chairman of the GRI
An integrated report …. The core concepts revolve around an “inclusive” approach and “integrated” reporting to provide a holistic and forward looking picture of the reporting organisation to the multitude of stakeholders who are impacted by and who in turn impact the reporting organisation.
Key considerations:• Integrated reporting…. – Is the evolution of sustainability reporting from a “nice to have” to a “need to have” basis – Is communicating the business strategy and processes which exist or are to be implemented to manage both financial and sustainability issues – Is a journey and progressively needs to cover the multiple needs of the different user types – Requires the development of a framework to ensure all reporting requirements are being met.Source: KPMG – Integrated Reporting – Understanding the requirements - 2011
Reporting Progress Sustainability Report Integrated Report Annual Report • Financial • Lots of issues • Core elements Results • Lots of that • Compliance stakeholders contribute to Statutory • Stakeholder core value Information based creation • Shareholders • Most material based to value creation for stakeholders • Stakeholder basedSource: Next Generation Consultants – www.nextgeneration.co.za
What this means….• This change requires not only new skills and competencies but also a new mind shift about fundamentally different communication strategies• This new era of Corporate Reporting focuses on enabling stakeholders to make informed assessments as opposed to companies telling their (one-sided) story• It requires integrated strategic communication strategies that considers, allows and encourages stakeholders to influence business strategy
New era of Responsibility -Transparency/ Accountability / Comparability • Principles of Reporting – Materiality – Inclusiveness – Completeness – Balance – Comparability – Accuracy – Timeliness – Clarity – Reliability – Transparency – Accountability
Where to start • Assessing the enterprise’s baseline economical, environmental and social performance – more specifically impact and risks • Analysing corporate management and accountability structures and systems to manage material risks • Conducting a materiality analysis of risks and opportunities • Confirming the most material issues with stakeholders – This information then defines the baseline for an organisation’s own roadmap to sustainability
Facilities Managers have theability to significantly influencesustainability outcomes in awide range of activities such asbuilding design, planning andconstruction, wastemanagement, environmentalmanagement, purchasing, andbuilding and groundsmaintenance. 11
IMPLICATIONS FOR FACILITIESMANAGERSThe economics of green buildings, once defined insimplified, cost of construction terms, now factor into amuch more complex economic framework. In thisframework, corporate financial accounting practices arecalled-on to place greater emphasis on expendituresrelated to energy and utilities, and they are measuredalongside the carbon footprint of enterpriseorganisations. One of the most critical areas of focus forthese organisations is their facilities, and it is throughstrong emphasis on sustainable operations, energyefficiency, and green building practices that some ofthe world’s largest companies are improving theirenvironmental performance, expanding their profitsand influencing partners and competitors.
Role and ResponsibilitiesThe Responsibility:• First, facility managers play an important role in delivering sustainable performance. This includes facility performance, staff management, purchasing and waste management.• Second, facility managers will be involved in gathering the performance information related to facilities in both the environmental and social performance sections of the reports.
At the bottom line of corporate sustainability reporting lay thenexus between carbon output andoperations costs. As companies use less energy, extract fewer resources, and manage tighter operational waste streams, they emit less CO2 and spend less.Innovation in buildings and facilities is at the centre of this.
Sustainability and • While the heart of any green building project is minimizing the impact thatFacilities the built environment has on theManagement natural environment, green buildings also offer healthy, productive workspaces that cost less to operate and maintain than conventional buildings • Typical issues facility managers should consider are: – Reduced Costs Through Energy Efficiency – Water Efficiency Savings – Savvy Waste Management – Increased Occupant Health and Productivity
• Helps identify opportunities for saving energy, water, materials, and money. • Helps identify opportunities for waste minimization and reuse. • Helps identify and address risks, potentially loweringValue of sustainable facility costs.facilities management • Adds rigor to internal data gathering and information– Internal Operational systems (including environmental management systems) to ensure facilities have the baselineBenefits information necessary to measure and drive continuous improvement in their operations. • Facilitates opportunities to benchmark environmental and social performance against other entities. • Promotes organisational learning by making linkages across typically independent functions within a facility more apparent, such as finance, quality control, procurement, facilities, environmental and safety compliance, etc. • Opens value-generating internal conversations that would not otherwise occur.
• Helps strengthen partnerships and build trust withValue of sustainable local communities, regulators, suppliers andfacilities customers. • Supports proactive engagement with regulators.management – • Supports supply-chain performance reportingExternal Stakeholder expectations.Benefits • Positions a facility to take advantage of performance-focused, regulatory approaches. • Sharpens management’s ability to assess a facilitys positive and negative impacts on the environment and society. • Provides advance warning of potential liabilities and performance problems, and highlights “triple bottom line” opportunities. • Helps a company achieve external value from its environmental management system. • Assist with overall organisational sustainability reporting processes.
Case Study 1 - Walmart• Wal-Mart has made – 1) High performance construction the centrepiece of new superstores and – 2) Through the incorporation of high efficiency lighting, and – 3) Enhanced building features, has reduced electricity consumption and claimed improved environmental performance. – 4) By instituting energy and carbon guidelines for suppliers, Wal-Mart tightly controls the carbon footprint downstream to its suppliers’ manufacturing bases – 5) And it has influenced green building retrofits and large-scale facility improvements outside of the organisation.• Wal-Mart is a key example of the new economic framework in its full glory – that there exists a correlation between environmental sustainability and increased share value for the investors.
Case Study 2 – LA’s Staples Centre• Staples Centre – Owned by AEG – home to LA Lakers and LA Clippers• The vision – – To “sustain a culture of environmental stewardship – reducing and recycling waste, fighting global warming, and educating our guests and employees”• The goal – – To have 100 % of its facilities and venues include environmental messaging and information by 2020.• The Sustainability Report – – Leading the way in the sports, facility management, and live entertainment industries. AEG’s sustainability report covers the broad array of impacts and strategies, including energy and climate, water, purchasing, and recycling and waste.
Case Study 3 – Palazzo Hotel Vegas• Energy Efficiency – Energy-efficient lighting and air conditioning (representing savings of 10,100 megawatt hours [mwh] of electricity — enough to power more than 700 homes annually) – Lighting power demand reduced by two- thirds in the guest room tower of 3,066 suites – Solar pool heating (annual savings of 340,000 therms of natural gas — enough natural gas to power a city bus for 1.02 million miles)• Waste reduction – Landfill deposits reduced by 72%• Water conservation – Overall water increased efficiency resulting in annual savings of 33.3 million gallons
Assisting you with Sustainability ReportingRefer to hand out/ worksheet
In summary:Reporting is not an end in itself. Evengood reporting does not necessarily result in improved sustainability. 22
Thank You Questions Please note:This presentation is part of a larger body of research and knowledge. For more information: www.nextgeneration.co.za 23