Sustainability can be a bit of a cursed term here in Australia. The mere mention of climate change can, as we saw only last week, lead to political turmoil of the most extreme kind. And while it’s something that motivates the top end of town, is it something that companies in the building supply chain really need to care about?
The answer is a resounding “yes”!
The reasons for that are many. Starting with the top end of town mentioned previously, we have companies that were previously focussed on energy efficiency when thinking about green buildings. But increasingly those same organisations – the likes of Mirvac, Frasers and Lend Lease to name but a few – are looking very closely at the materials and products going into their buildings. They’re developing rigorous sustainable procurement policies that require suppliers to demonstrate transparency and good practice on environmental performance. These requirements mean that it’s becoming ever harder for those failing to act on sustainability risk missing out on big contracts.
As a result, manufacturers across the sector are developing their own sustainability strategies, and are looking to ensure that their credentials are communicated to potential customers. The number of companies with Environmental Product Declarations is growing exponentially – including the likes of Innowood, James Hardie, CSR Martini and Kingspan – while other ecolabels such as Good Environmental Choice Australia (GECA) and Global Green Tag are also expanding their reach across the sector. And meanwhile organisations such as Bookmarc are making it easier for specifiers to find companies with these kinds of certifications.
This movement is being supported by a renewed focus on products and materials in key building rating schemes. Green Star now awards more points than ever to those buildings demonstrating good performance in their selection of sustainable products and materials including rewarding the use of those that are carbon neutral. More recent announcements on the future of Green Star will push this agenda even harder. At the same time we’re seeing new rating schemes which are even more rigorous in this space including the Living Building Challenge, which includes a “Red List” of proscribed chemicals and the related “Declare” labelling system for products, and the WELL standard that includes strict standards on things such as indoor air quality and volatile organic compounds that have profound implications for manufacturers of products and materials.
These new rating schemes mark an expansion of the term sustainability to include the health and wellbeing of building occupants. Recognition of the importance of these issues is accelerating quickly in the commercial property space, driven by the desire to provide employees and customers attractive and productive environments in which to work, rest and play. But, inevitably, these same considerations are gaining increasing traction in the residential market, with builders and renovators wanting to ensure that they’re not placing their families’ health at risk. And, of course, slowly but surely, the message that sustainable homes are cheaper to run is sinking in across the Australian housing market, driving greater demand for energy efficiency-enhancing products.
Finally, there’s the recently passed NSW Modern Slavery Act (with a Federal version set to follow soon). This legislation will require all companies over $50m to identify and address social risks in their supply chain, with many of those covered looking at compliance as an opportunity to also get on top of their environmental performance too. And while the $50m threshold rules out a lot of smaller companies from being covered directly, even they will soon be under the spotlight from their larger customers.
All in all, there’s never been a better time to start thinking about sustainability and to ensure that whatever you have done is visible in the market. While doing so was once the business of a small number of outlier companies looking to show leadership, it increasingly looks like those failing to act will soon be permanently left behind.