From ESG targets to ESG results – what challenges are developers facing and what’s needed to drive progress?

A recent panel hosted by the British Council for Offices (BCO) (ESG: From strategy to reality) discussed the ongoing challenges for developers in delivering ESG targets. The overwhelming message was that it is a team effort.

It’s a team effort

• Developers and investors can’t do this alone! Buy-in is needed from the entire project team.
• The construction teams are seeking to provide design-led solutions – to drive change, developers need to continue to empower their teams to propose these.
• Developer Landsec’s approach is to “build well, live well and act well” at all levels of the business and British Land’s strategy is to focus on two time critical areas “making our portfolio net zero carbon and, partnering to grow social value and wellbeing in the communities where we operate”.
• The contractor and design team should be selected as partners to drive innovation in sustainable outcomes.
• A project’s sustainability objectives (such as LEED, BREEAM and NABERS) need to be identified throughout the documents whether it be project briefs, scopes of services or the terms and conditions.

Ongoing challenges

Given how quickly a developer’s ESG requirements and criteria are evolving, it is hard to compare like for like across projects if consultants are providing different data on each project in response to those evolving requirements. David Savage, a Partner in our Construction, Engineering and Projects team commented on the importance of reaching a consensus on how to measure and report data to facilitate the road to net zero.

Identifying how the market values ESG measures is getting easier but it is not binary. Some on the panel thought it could be demonstrated more easily in commercial spaces through office occupancy but it is less straightforward in residential schemes.

Companies need more specialists and new skill sets. More investment is needed in training and inspiring the broader business to buy into the delivery. It is vital to have buy-in from the top. There could be more barriers to this within smaller businesses and on lower-value projects.

The industry seems committed to paving the way, long may it do so!