Dr Greg Dooley
Digital Marketing Manager
Content Specialist in Office Design & Build
ESG (environmental, social and governance), has moved right to the forefront of the business agenda. However, it began much earlier as an investment practice in the 1960s when socially responsible investors would exclude entire industries from their investment portfolios based on their involvement with irresponsible activities (e.g. firms pulling out of operations in South Africa in the 1960s). For years it remained a minority interest, and it wasn’t until the mid-2010s that investors at a larger scale started to pay attention to ESG data and information such as carbon footprints, board makeup and labour policies. Nowadays, ESG has stretched beyond a pure investment focus to become a set of standards used to evaluate the commitments of a business towards the environment and society. Like Corporate Social Responsibility (CSR), Environmental, Social and Governance (ESG) is about businesses being accountable and responsible for their actions. But while CSR holds businesses accountable in a qualitative manner, ESG endeavours to identify, measure and quantify those efforts with various metrics.
ESG has a direct impact on the workplace and there is a lot that companies can do to initiate change and improve their ESG goals; from small measures like switching to LED bulbs to larger design and build changes like improving insulation, and monitoring heating through smart office design.The office has become a showcase for how well companies are adhering to their goals – their approach to recycling, green building standards (green construction or sustainable building), and net-zero targets. It is also becoming an increasingly more important benchmark for determining how responsible a business is, as well as other crucial decisions like whether it’s worth investing in. The influence ESG has on public opinion (particularly around the issues of climate change and social well-being) and willingness to invest in a company adds pressure on companies to ensure they meet ESG standards and targets.
ESG is best understood in its component parts, Environmental, Social and Governance.
Environmental, the ‘E’ in ESG, is about an organisation’s impact on the environment. It’s used to show the impact that organisations have as they interact with the environment around them. It includes things like the reduction of carbon emissions (improvement of a company’s carbon footprint), wastewater discharge, the recycling of plastics, and the reduction in emissions of harmful chemicals in products.
The UN’s 2015 Paris Agreement (the legally binding international treaty on climate change) committed the UK Government to achieve net-zero by 2050, and carbon reductions of at least 68% by 2030. The onus on offices to lower their CO2 emissions is founded on the significant contribution of office buildings towards those emissions.In fact, nearly 40% of the UK’s carbon emissions come from buildings. 11% of that is from building materials and construction (referred to as embodied carbon). A larger 28% comes from the day-to-day building operations. This puts a huge responsibility on company directors, office managers, and indeed all staff members to reduce their carbon footprint while showing commitments to decarbonising their operations.
The floor area of buildings globally is expected to double by 2060 in what is the largest wave of urban growth in human history. We’re expecting an additional 2.4 trillion ft2 (230 billion m2) of new floor area added to the existing built environment. That’s the equivalent of adding an additional 480 New York cities to the world, or one every month for 40 years.
Operational carbon refers to the carbon emitted from the day-to-day operational use of an office building. A newly constructed building is far more energy-efficient than an older one. Considering that 80% of the buildings in 2050 will be the ones already built (i.e. embodied carbon), making commitments to decarbonising existing operations and safeguarding business growth from further emissions will be of prime importance. Some of the things companies can do to lower operational carbon emissions include:
The social element of ESG is about employee well-being, which is a significant part of any successful business. The workplace thrives on social interactions, friendships and the general happiness of employees. Conversely, a stressful environment can lead to employee turnover and taking sick leave due to stress and mental health concerns. This ultimately leads to a loss of productivity and profit for a company. Here are a few of the ways in which companies can support the social side of ESG:
Governance (the G in ESG) is about the processes, values, guidelines and rules that a company puts into place that make its business accountable. Addressing environmental and social issues through good corporate governance is becoming a top priority for companies. Companies are constantly being scrutinised on their commitments to climate change, the well-being of their workers, and the impact on society at large. In fact, research has shown that 64% of Millennials consider a company’s social and environmental commitments when deciding where to work.Governance is pivotal to the success of a company because it bears consequences. Labour strikes, high levels of employee churn and public protests against companies breaching environmental and social protocols can damage a company’s reputation and ultimately impact its profitability. Measures to improve and maintain good corporate governance include:
At K2 Space we make proactive decisions that apply best practices in governance for our office design and builds / CAT B Fit Outs. These include working with suppliers that adhere to the highest ethical and environmental standards. A good example of this is our close working relationship with Humanscale, a company who are committed to environmental safety, net positive products and complete transparency in the materials used in their products through their unique Declare programme.
We are involved in the Considerate Constructors scheme which commits sites, companies and suppliers to respect the community, care for the environment and value their workforce. Our involvement with the scheme creates full transparency and accountability for the sites we work on. Among our commitments are the requirements to optimise the use of materials and resources, including minimising carbon. We also employ construction practices that minimise the negative impacts on the environment.
BREEAM (Building Research Establishment Environmental Assessment Method) is the world’s leading science-based suite allowing validation and certification systems for a sustainable built environment. BREEAM’s holistic approach to achieving ESG, health, and net-zero goals has been registered by millions of buildings around the world. It examines a building’s design, construction, and operation in relation to a set of performance targets.K2 Space worked with Envision in achieving BREEAM status for a recent fit out project for a market-leading property advisory business. Gaining BREEAM Status involved working through an extensive list of criteria that we had to achieve to be awarded the accreditation, from compliance in energy-efficient light bulbs with movement sensors, to glare and light control to ensure the best work conditions for staff.There were numerous criteria in the audit with strict targets to achieve them. The design stage for instance comprised 56 target criteria across areas of the ESG guidance – Environment (energy, transport, water, materials, waste, ecology and pollution) Social (health and wellbeing) and management (Governance). We had to ensure a whole range of criteria were met and information provided, for example:
BREEAM’s Management criteria included:
The ‘social’ element of ESG is reflected in the “Health and Wellbeing” aspects of BREEAM assessment. Criteria here includes, but is not limited to:
Reduction of energy use and carbon emissions, measuring major energy consuming systems and utilising energy efficient equipment are all BREEAM criteria that hinge on ESG goals. Others include the monitoring of water consumption (through meterage and flow control devices – such as those regulating water in WC areas); material sourcing that is response and sustainable; and the reuse and recycling of materials.
At K2 Space we are committed to working in a sustainable manner that embraces ESG principles and integrates ESG considerations into your workplace design. Furthermore, we believe that we can have a positive impact on your ESG goals by helping you measure and assess the impact of the design through choice of materials, choice of furniture, and the use of sustainable and considerate measures in the overall build process.
If you’re looking for a fit out company nuanced in BREEAM and other building accreditations, such as the Considerate Constructors Scheme, that require thorough attention to detail, we are ready and able to assist. We strongly believe that our projects have the potential to shed a positive light on our client’s ESG commitments. Our team can also support you in assessing the impact of your office design and build project, as well as providing advice on the design and build criteria that support ESG goals.