Sustainable Development 3500 words

The Sustainability Framework and Its Application to Facilities Management Services

Sustainable development, or sustainability, has increased in importance in recent years.  As Blackburn (2008) points out, these terms have become increasingly commonplace in communications with government and industry leaders. The numerous worldwide institutions dealing with different aspects of sustainability – for instance, the International Institute for Sustainable Development, World Business Council for Sustainable Development or the Dow Jones Sustainability Index – bear witness to this. While the formulation of sustainable development began at the global diplomatic level, it soon sifted down to the business organisation level. Especially after 2000, sustainability has become increasingly employed in various industry sectors. Joining this business-wide trend, Facilities Management (FM) has recently become involved in the sustainability movement. This essay analyses the sustainability framework with a particular emphasis on the business context, and then investigates how and why FM can successfully implement the sustainability model.

1. The Business Sustainability Framework

Sustainability or sustainable development was first defined by the Brundtland Commission of the United Nations (1987, p. 43) as follows: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. Even though this is the most usual definition, there are endless variations or critiques of the concept. This prompted Welford (2000, p. 69) to note that “There exists a strange and fruitless search for a single definition of sustainable development among people who do not fully understand that we are really talking here of a process rather than a tangible outcome”.

Sustainable development as a concept began from a revelation of scarcity: there is a limit to which one individual, organisation or society can expand without depleting resources, or affecting future livelihood. However, as Ehrenfeld (2000) has pointed out, sustainable development is a difficult concept, because we can only know if the world has been sustainable in the aftermath.

Sustainability can be traced back to growing environmental concerns in the 1960s and 1970s.  A major influence in this movement was the publication of Rachel Carson’s landmark book of 1962, Silent Spring, which revealed the problems associated with pesticide-based agriculture. Her book had an enormous impact on making people aware of the burden that unbridled economic growth had on the environment. In 1972, the United Nations Conference in Stockholm concluded that economic development and environmental protection were interlinked. During the 1980s, environmental disasters like Three Mile Island or Chernobyl nuclear spills gave a new impetus to the exploration of “green”, or environmentally friendly living. In 1987, the UN World Commission on Environment and Development first formulated the notion of “sustainable development” as an ideal of combining economics and the environment. In 1992, the Rio Declaration on Environment and Development expanded the Brundtland definition into 27 principles, including such topics as peace, poverty and women’s issues. An important development took place in the late 1990s, when economist John Elkington (1997) defined sustainability in terms of a three-bottom line (TBL) of economic, social and environmental performance.

During the 1990s, the concept of sustainability began to be extended into the realm of business organisations as well. In 1992, the newly established International Institute for Sustainable Development defined sustainability in a business context as

“Adopting business strategies and activities that meet the needs of the enterprise and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future” (IISD 1992).

This definition emphasises the following ideas:

1. strategic thinking is required to implement sustainable concepts
2. strategic principles of sustainability must be translated into real, ongoing business activities
3. perspectives that maximise profits in the short-run must be correlated with long-term thinking
4. strategy must incorporate concerns for the economic, social and environmental position of the company

In the business context, sustainability refers directly to the ability of a company to survive over time through its multilateral policies.

Elkington’s TBL provided a framework under which organisations could judge their sustainability. It first suggested that the three elements: economic, social and environmental were interlinked and interdependent.  In 1999, the Global Reporting Initiative (GRI) issued its first Sustainability Reporting Guidelines for organisations based on the TBL system. Today, more than 80% of the Global Fortune 250 organisations report their sustainability performance (KPMG 2008).  However, at this time there is no sustainability reporting standard and the different frameworks are often incompatible (Hubbard 2009).

Sustainability as a business concept has become increasingly popular in the 2000s. In 2002, the Pricewaterhouse Coopers Sustainability Survey investigated a large number of US companies in regards to the topic; more than 70% of them reported that sustainability is important or very important to them, and about 90% believed there would be more emphasis to it in the near future (Pricewaterhouse Coopers 2002).

Despite the official ‘sustainability’ talk in businesses, reality seems slightly more worrisome. As Blackburn (2008) notes, sustainability is often treated outside the core business of companies, as a ‘whim’ of the Chief Executive Officer or simply as reporting task. Moreover, the concept itself is hard to grasp in an internal organisation context (Blackburn 2005). Often, the meaning of the term becomes blurred by association with other associated ‘buzz-word’ terms as Corporate Social Responsibility (CSR), Environment Management Systems (EMS), greening, eco-efficiency and others. According to Blackburn (2005), the idea of sustainability should be adapted to the needs of the organisation, without forgetting the importance and value of the term itself.

There are numerous reasons why sustainability stands at the heart of a company’s survival (Christmann 2000). Thus, sustainability is intrinsically linked with reputation, which in turn has a great impact on the sales and stock prices of businesses (Blackburn 2008). In 1999 a landmark analysis of the Reputation Institute showed that a company’s social responsibility and workplace environment had an average of 30% correlation with the corporate reputation (Blackburn 2008). Other reasons why sustainability is vital include: the development of more competitive products, improved productivity through eco and human-friendly designs, reduced operational burden, reduced supply chain costs, reduced cost of capital and reduced legal liability (Blackburn 2008).

Even though the business case for sustainability may be clear, implementing it into a business is a complex matter. Porter (2008) identifies a definite gap between intention of adopting sustainability and the provision of clear strategic tools to actually implement it. One sustainable policy that has been quite successful has been eco-efficiency, defined as increasing productive output while using fewer resources

(Welford 1998). The concept of eco-efficiency (EE) was popularised by Schmidheiny and the Business Council for Sustainable Development (1992).  Eco-efficiency yields measurable benefits, often presented as the reducing carbon footprint of a business (Wackernagel 2008). Therefore, eco-efficiency has been used as an measurement indicator for business sustainability. Yet the concept has been criticized recently as having paradoxical non-sustainable results (Jevons 1990, Korhonen and Seager 2008) and for having a limited scope (Gladwin et al 2006). Figge and Hahn (2001) acknowledge eco-efficiency’s negative growth effect on sustainability and propose the concept of eco-efficacy as a measure of corporate contribution to sustainability.

The implementation of sustainability in business is generally treated through the classical strategic management perspective. For instance, Blackburn (2005, 2008) proposes a framework of implementation called a Sustainability Operating System (SOS). The SOS comprises the following components: a) Drivers of Sustainability, including the designation of a champion / leader and a successful approach to selling the concept, b) Efficient Enablers, by which he means a good organisational structure and the deployment of teams, c) Pathway, meaning the integration of sustainability into the organisation’s values, mission and policies and d) Evaluators, or the proposition of good reporting indicators and of qualitative measurement tools such as stakeholder feedback. While Blackburn provides a coherent sustainability framework, other researchers disagree with the idea that sustainable development can be achieved in the context of the current neoclassical management paradigm. Thus, some scholars argue that an entire paradigm-shift must take place in an organisation in order to achieve sustainability (Stubbs and Cocklin 2008, Ketola 2009).

An important new perspective on the management of sustainability has been given by the role of supply chain management. As Seuring et al (2008) observed, due to globalisation and increasing market complexity, many companies are now in the position of being judged for the actions of their suppliers and contractors. Such businesses targeted by public scrutiny are called “focal” companies and they usually (1) rule or govern the supply chain, (2) provide the direct contact to the customer, and (3) design the product or service offered (Handfield and Nichols 1999).  Sustainable supply chain management has been defined as “the management of material and information flows as well as cooperation among companies along the supply chain while taking goals from all three dimensions of sustainable development, i.e. economic, environmental and social, and stakeholder requirements into account” (Seuring et al 2008, p. 1545). Currently, research into sustainable supply chain management is dominated by environmental concerns. Social issues are only now beginning to be analysed, but they are a growing concern amongst companies (Seuring and Miller 2008).

1. Facilities Management and Sustainability

Facilities Management (FM) is a relatively new business discipline, but is also one of the faster growing ones (Barrett and Baldry 2003). For instance, the FM market in UK is worth 106.3 billion with annual growth levels expected to be between 2-3% from 2006 to 2010 (Shah 2007).

FM has been defined in various ways, including:

“An integrated approach to maintaining, improving and adapting the buildings of an organisation in order to create an environment that strongly supports the primary objectives of that organisation” (Barrett and Baldry 2003, p. XI),

Or

“A profession that encompasses multiple disciplines to ensure functionality of the built environment by integrating people, place, process and technology” (IFMA 2009)

In Europe and the UK, in particular, facilities management has a wider applicability, being defined as “the integration of processes within an organisation to maintain and develop the agreed services which support and improve the effectiveness of its primary activities” (CEN, qtd. in Shah 2007). As Shah (2007) points out, none of these definitions are wrong, but merely point out to the complexity of organisational FM needs.

Facilities Management in its current form began in the 1960s and 1970s in the USA, and developed in its own discipline following the foundation of the International Facilities Management Association (IFMA) in the 1980s. In the 1990s, further organisations were established in Europe, such as EuroFM and the British Institute of Facilities Management.

FM currently includes a broad range of services, such as catering, cleaning, building management & maintenance, ground management, security, postal, dam management and IT, telecommunications, secretarial, and health & safety (Shah 2007). FM development has been marred by a perception of FM as a cost-reduction service rather than a strategic discipline (Shah 2007). The importance of taking a strategic business view in the implementation of FM has been enhanced in recent years (Then 1999).

The FM services can be in-house or contracted outside the organisation. An important aspect of FM is outsourcing (Shah 2007). This is due to the fact that, while some large companies have maintained an in-house facilities staff, many choose to outsource the service (Shah 2007). Consequently, supply chain management aspects become interlinked with facilities management.

Sustainability research in Facilities Management has focused mainly on the Facilities Manager’s role in implementing environmental initiatives in buildings. The attention has fallen particularly on the improvement of eco-efficiency indicators.  Facilities managers have been at the forefront of implementing green initiatives since 1994 (Air Conditioning 2007). A recent IFMA survey (2008) has shown that the majority of facility managers are following master plans when implementing sustainable practices and are tying efforts to measurable goals and business strategy (IFMA 2008) The percentage of respondents who say they have not implemented any green strategies and do not plan to fell from 16% in 2002 to 5% in 2008, while 92% say they are working to make their facilities more sustainable (IFMA 2008). This concern is in line with the clients’ requirements. An analysis by Nouisiainen and Junnila (2008) shows that end-users are particularly interested in green facility management and recommended better stakeholder communication by FM managers.

Some studies have focused on the impact of Facilities Management on the social aspects as well. For instance, Foju (1994) and Roelofsen (2002) have found that facilities management has a major impact on the work productivity through the creation of a comfortable work environment.

Recently, the Facilities Management focus has began to shift from simple “green building” solutions to integrated sustainability (IFMA Foundation 2007). This movement is part of a greater focus toward life-cycle costing considerations of buildings. Life-cycle costing is defined as accounting for all relevant costs during the investor’s time horizon and adjusting for the time value of money (Kelly and Male 1993). Currently, there is an increasing movement toward the concept of sustainable buildings. For instance, the US Defense Department has recently included a provision for sustainable design of its contracted buildings (Concrete Products 2008). A survey by McGraw-Hill Construction and Siemens Building Technologies Inc. has also shown that corporations favour the sustainable building design (Design News 2007).

The sustainable building movement advocates integrated management approaches that include supply chain integration or value management (Hassan 2006). This development should favour Facility Management growth, as the long-term costs of operating and maintaining a facility are now being projected into the initial design. Historically, Facilities Managers had to cope with contracts on less than 2% margin with additional requirements making the profit up to 6% (Shah 2007). The changes in the industry would enable Facilities Managers to obtain higher margins and invest into the processes and products needed to make the facilities more sustainable.  In turn, sustainability should provide the scope of productivity increase and cost reduction in the maintenance of the building.

An important driver of sustainability change in the FM industry is the International Facility Management Association (IFMA), which is currently advocating the extension of FM practices to full sustainability (IFMA Foundation 2007). IFMA supports an integrated sustainable building approach that includes:

• Increased building efficiencies and energy, water and other resource savings
• Reduced waste going to landfills or incineration
• Satisfying, productive, quality indoor spaces
• Education opportunities for building occupants about efficiency and conservation
• Reduced environmental impacts
• Enhanced economic performance

In the USA, an important step towards including Facilities Managers within the context of “sustainable buildings” has been the recent establishment of a new component of LEED programme (Leadership in Energy and Environmental Design), called Existing Buildings: Operations & Maintenance, which helps the Facilities Manager implement such major sustainable building initiatives, as water efficiency, energy conservation, materials and resources usage, indoor environmental quality and innovation (Holland 2008). This programme is currently seen as the cornerstone to applying sustainable principles in the US FM industry.

How may a sustainability program be implemented in a FM organisation? As suggested above under point 1, a strategic approach is vital and key to the success of any sustainability initiative. The following framework, loosely based on Blackburn (2008) is suggested:

• Establish how sustainability can be integrated within the company’s mission, and values. Typically, since FM is centrally linked to environmental aspects, sustainability should follow naturally from the core vision of the FM organisation
• Consider using existing Codes, such as the LEED-EB:O&M
• Establish a Core Team, or a board on sustainability. Roughly 1 in 5 companies in Dow Jones Sustainability Index has a board-level committee (Blackburn 2008).
• Formulate a Strategic Plan of how sustainability can be integrated in the activities of the FM
• Develop an Operating Plan of how to actually translate sustainability into achievable business objectives and activities
• Establish an Operative Team: by comparison to the Core Team, which has mostly strategic attributions, this one will actually be implementing the activities
• Establish indicators: the sustainability programme should be designed in a way that it could be measured in quantitative or qualitative terms.
• Obtain stakeholder feedback in evaluating the programme
• Organise sustainability reporting: as shown above, reporting is an important part of sustainability implementation. A standard such as that of the GRI should be used and employed consistently throughout the organisation.
• Consult and involve end-users in the management of the programme.

An important aspect of sustainable Facilities Management is supply chain management. As mentioned above, there is an increasing comprehension amongst the stakeholders of a building that sustainable development means that life-cycle costing must be integrated from the beginning of the design up to the operations and maintenance phase. There is important scope to the integration of these various phases. This long-term view has been expressed through an increasing life-cycle costing views of design, partnerships between contractors and facilities management companies and even the integration of FM services within construction companies (Facilities 2008). It is probable that this growing awareness of the need to take a long-term view of building will result in a greater importance and greater financial returns for FM companies.

1. Conclusions

As has been seen from the above analysis, there is considerable and natural opportunity to expanding sustainability in the FM services. FM is already involved in green building initiatives; therefore it would be a natural extension that it should become more involved in the sustainability framework. However, Facilities practitioners must understand that sustainability is not the same thing as green approaches, but it has a wider perspective that includes workplace environment, productivity, employee satisfaction and accountability.  Therefore, a new, strategically-led integration of the economic, social and environmental aspects should be devised within FM organisations.

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