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Skanksa makes commercial case for sustainability

Skanska was named greenest company in the UK by the Sunday Times, but going green is not only about the environment and sustainability; it also makes commercial sense.

There is often a belief within the construction industry that that being green costs more. But by using the right technology and approach to individual buildings, this does not have to be the case.

This message is one Skanska is trying to get out to the industry. “One of the challenges for the industry is to work collaboratively and change the perception that green means more expensive and less reliable,” Skanska executive vice-president Cecilia Fasth says.

“One of the challenges for the industry is to change the perception that green means more expensive and less reliable”

Cecilia Fasth, Skanska

“Some technologies which were expensive 10 years ago are actually quite affordable to many businesses today. We couldn’t make LED lights work five years ago, but we can make the business case for them now. The volume has made the difference.”

The business has made a name for itself as a green company – for both the work it carries out and corporately, too – and earlier this month it posted a rise in profits for 2012, reinforcing the view that green and profit are not mutually exclusive.

Sophisticated analysis of green performance

Skanska started its sustainability journey earlier than many of its competitors, first getting its ISO14001 in 1996, and so is now looking at more sophisticated analysis and measurements of the company’s commitment to sustainability.

The company uses a colour palette to map all of its projects from vanilla, which is a normal building, to deep green, which is a highly sustainable building. This is used as a training tool to help the workforce and clients consider how they can move up a stage, but Skanska is now looking to turn this into a commercial tool as well.  

“We are mapping all of our buildings and services on the colour palette and asking: ‘What are the commercial implications of that? Is a greener project more profitable? How much of our work is deep green? How much of our profit is deep green?’” Skanska director of environment Jennifer Clark says.

“So we’re taking a more holistic approach to the sustainable aspects rather than just considering upfront investment.”

Targeted sustainability training

Another way the company is trying to alter the perceptions within its own workforce is through sustainability training that is targeted at specific roles and disciplines.

“Earlier on in my career when I got the opportunity to train people I wanted to train everyone on everything, but in the last few years we’ve become more specific,” Ms Clark says.

“One of the initiatives we started last year is for commercial managers looking at lifecycle costing; it’s very specific training to their discipline. Once they’re on board they start asking more questions and then make a business case for it. This is about making money as well and we’re not afraid to say that.”

Green battles for airtime in the boardroom

While some clients need no convincing that a sustainable approach is a sensible one, others are more hesitant in the current climate. Green considerations are rarely top of the agenda and have to battle for airtime in the boardroom with issues of finance, liquidity and turnover.

“This is about making money as well and we’re not afraid to say that”

Jennifer Clark, Skanska

“It’s lower down the agenda for boards: first they are talking about how to keep their order book and revenues at a certain level, then it’s the financial situation and a number of other issues that are higher up,” Ms Fasth says.

“But I do think sustainability is starting to get embedded. A few years ago it was something new and no one really knew about; now it is definitely more embedded, so you don’t need just one front person, as there are several.”

Finding ways to unlock funding

The challenge is not always convincing clients they should be investing in sustainability, but unlocking the funding necessary to make it happen. “People see the benefit of making an upfront investment for a long-term purpose, but the money is just not there, so we need to find a way of unlocking that,” Ms Fasth says.

“In order to convince our clients, we need to have some robust numbers on projects we’ve done”

Jennifer Clark, Skanska

Skanska’s green fund is one way the company is helping clients. Skanska will pay for energy-saving initiatives on projects from the green fund.

If the initiative is successful, the savings payback is put back into the fund to be used for other initiatives. Skanska takes the risk of the technology or initiative not performing as they think it will, and it requires no upfront investment from the client.

Skanska also uses case studies with data on energy and cost savings to encourage clients to invest in sustainable solutions.

“In order to convince our clients and make changes in the future, we need to have some robust numbers on projects we’ve done and information on what the funding model was, what the paybacks were and how technology performed in use. It all stands and falls on getting the numbers right,” Ms Clark explains.

The greening of Maple Cross House

One of the projects the company is hoping will illustrate this is the retrofit of Skanska’s headquarters in Maple Cross. The company leases the building, which was built in 2002, and are in the process of a £1.5m retrofit.

The team is undertaking 10 interventions at the Maple Cross headquarters:

  • It is introducing 25 electricity, heat and water meters around the building to pinpoint where energy is being used and in what way. Feedback is sent to a live dashboard and the information is used against targets.
  • The building management system (BMS) is being optimised.
  • All of the internal lights and car park lighting are being changed from florescent tubes to LED panels.
  • Electric car charging points are being introduced.
  • A new biomass boiler is projected to provide around 85 per cent of the thermal load the building needs.
  • Heat recovery are being introduced into the handling areas in the plant unit.
  • The cooling units in the server room are to be changed to make them more efficient.
  • Photovoltaic panels are being added on the roof.
  • A behavioural change programme is being rolled out, where the team work with staff to understand how the building is used, where savings can be made and how their environment can be improved.
  • Voltage optimisation is the last intervention, as the electrical profile of the building has changed so voltage optimisation will be most successful at the end of the process.

Data is available for each intervention on the capital expenditure, payback time, carbon saving and annual cost saving.

In order to properly understand how successful these interventions are, the team must first understand their starting point. “We calculate everything from a baseline performance,” says Skanska associate director Richard Byers.

The baseline figures for Maple Cross are:

  • Annual utility cost – £218,741
  • Annual carbon emissions – 1,572,517 kgCO2 p/a
  • Annual electrical consumption – 1,412,515 kWh p/a
  • Annual thermal consumption – 2,168,272 kWh p/a

Then, using the energy performance contract, Skanska can calculate the projected savings in both energy and cost. The project cost savings are £145,000 per year and 718 tonnes of carbon, which amounts to a 50 per cent reduction.

“We need to guarantee the performance of each of the pieces of kit we’ve installed,” Mr Byers says. “We verify the performance of each of the interventions through an external consultant and they verify the savings.”

Skanska has already completed a full refurbishment and retrofit on one of its smaller offices, Hollywood House, where the annual savings are £12,000, 45 tonnes of carbon, 44 per cent energy savings and 55 per cent water savings.

“We’ve convinced staff that we are not asking them to make these changes because we want them to be eco warriors, but because there is a sound business case,” Mr Byers says. “The challenge now is getting the rest of the market to think like that too.”

This is the challenge Skanska will continue to address as it works to move the sustainability debate forward.

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