I participated in a 450 year old tradition recently: a torchlight parade and bonfire night in Sussex, UK. A stunning and visceral event. Sadly, the announcement over the public-address system in the firework display field informed us that the construction of 62 houses has been approved in that field and they have to find a new site. All good things come to an end I suppose but it feels wrong in many ways. The recent Empty Homes report tells us that there are 610,000 empty dwellings in England, 200,000 of which are empty on a long term basis. England needs a supply of about 245,000 homes a year to keep up with household growth.
And market conditions are challenging. There’s a continuing increase in demand for housing, a shortage of skills in the industry and pressure on material resources. By 2030, around 11 million people in the UK are expected to be living on their own; that’s more than 40% of all households (compared with 29% (7.6 million) in 2012)! And by 2030, over 82% of the UK’s population will live in urban areas and household numbers are projected to rise to 31.2 million, up from 27.5 million in 2015. Gulp! And as immigration pressures emerge in Europe, especially in relation to Syrians, for instance, the challenges are exacerbated.
Further, thousands of British houses — many targeted at first-time buyers — are being sold as leasehold by property firms (for readers not in the UK, this means that the property is ultimately owned by a freeholder who is not the leaseholder buying the property, and after a set term, typically 100 years, the ownership reverts to the freeholder). Allegedly, investment companies are driving demand for leasehold homes (not flats) to make a profit from the annual fees the ‘buyers’ pay.
I am encouraged to see that Barratt Developments plc is playing its part in all this. House builders need to build houses of course, but at least Barratt is responding to the issues of access to affordable homes and use of brownfield sites. They set their efforts against the Construction 2025 strategy (targets: 50% less carbon emissions, 50% quicker and 33% cheaper) and they are committed “to becoming established as the leading national sustainable housebuilder”. Guided by regulations such as the Energy Performance of Buildings Directive , this means building houses more efficiently and mixing tenures to suit customers. It means doing so in the face of increasing demand and slow wage growth, a rise in the private rental market and lower access for younger people to home ownership. It means contributing to quality of life and environmental protection. Above all, it means a high level of stakeholder engagement at the core of the business.
Sir Lawrie Barratt was a businessman who made home-owning affordable for millions of Britons (he was also a tough cookie: he and his wife were bound and gagged in their home by three masked men who then made off with a reported £1 million worth of jewellery). Is the Barratt of today continuing the legend in a sustainable manner? What does the report tell us?
Well, the news is generally good! The personality of the report is of a stocky, confident, salt-of-the-earth, professional tradesman jumping out his van to sort out the lads on site. The report is laid out relatively conventionally (no bad thing really), it cuts to the chase, gets the facts across, and uses a common layout for each double-page spread Chapter. Each is distinguished using a different colour. Only the People section uses two double page spreads. Each chapter leaves the reader wanting a little more. But I actually think that works. I feel “engaged”.
The ‘year at a glance’ page shows better performance and key achievements under four business priorities, and they have an updated Group Socio-Economic Footprint that shows data for ‘expenditure on physical works benefitting local communities’ for the first time. Further, they include an explanation of ‘why’ each of the 12 issues matter and new use of a large table at the back for an overview of commitments, performance and actions.
The document feels as if it will also serve other purposes (a good thing), such as sales brochure to reassure customers not only about quality and design but also the wider agenda facing the industry. The key issues list is good, they are not afraid to lay out the detail of the issue using less-than-snappy titles, such as “Delivering land availability and effective planning”. I did wonder if the “Building Community Support” section could be integrated with the “Sustainable places to live” section. The former contains much that is required by law, or part of planning processes (p13 mentions s106 Agreements), while the latter feels more progressive.
I like the “aspirations”, but the next report could probably formalise those (under Barratt’s emerging strategy framework/roadmap 2020). There’s some useful detail to help push forward strategic action in this area. The “Building blocks” (p5) include, for example, remuneration linked to sustainability: incentives “linked to customer service, employee engagement, health and safety, and land buying (including management of flood risk and environmental sustainability)”. And there are lots of frameworks and guides, and approaches to delivering their work, for example, the “Fabric First, Fit and Forget ethos” (for lower carbon dwellings).
I learned a new phrase – “placemaking”. Always good to learn a new term to bandy around. It’s to do with sustainable places to live in, and was coined in the seventies apparently although it wasn’t brought up in my EIA/planning Masters Degree! What I notice in this area is a lot of Building for Life awards: what I don’t know is how difficult it is to achieve such an award. It’s useful if a reporter tells us (and I really don’t mean to take anything away from those achievements, honest!)
The Supply chain section is interesting. Not just for the content but the way that Barratt aren’t shouting from the rooftops about their approach. They ‘tell the story’ of collaborative learning and improvements via engagement with suppliers in the body of the text (and the body text is small). They don’t appear to source much from outside the UK (only around 2%), or more challenging countries of origin (unclear if they do), and they commit to local UK sourcing. Overall, one is left with the impression that core business incorporates sustainability practices ‘as if no one was looking’. Also, I liked the ‘local’ approach taken. For example, the greenhouse gas content comes later (global), after the sustainable living and UK biodiversity chapters.
Engagement with suppliers is an example of some good work at the company. You get the impression, in this albeit brief report, that they’re “out there doing it”. For example, at the heart of much of their efforts is their Barratt Consult manual on “best-practice guidance on how best to work with local communities in the design and consent process [so reducing] the need for lengthy planning appeals processes”. Supplier relationships permeate everything in this industry (cost, quality, design etc) so they clearly do it as part of the core business anyway. Hopefully they will have enough skilled people to deliver it all.
On engagement, one thing they could include is people on the ground telling the sustainability story in their own words. This can be effective for an experienced reporter.
And the innovation section adds some fun into the report (surprisingly) – they describe their sandpit day with suppliers to advance thinking and innovation. This conveys the human side of the company I think. They use a few data points to track the implementation of more innovative practices too. It would be interesting to know if the low embodied carbon roof tiles are the same cost of ‘conventionals’.
OK, on to my small gripe. A benefit of GRI based reporting is the use of the reporting principles. One such principle is balance. Barratt is not using GRI in any formal sense and all seems ‘rosy in the garden’ at Barratt. Can it be true? What about the age old problem of supplier and sub-contractor quality. Are they all whiter than white (van-man)?
That said, I feel sure that Barratt is aware of limitations in their practices eg, in seeking a net positive impact across the development portfolio by 2020. Whilst one expects a measurement-based approach, their stated aspiration is to work on this using ‘reviews’ and ‘encouragement’ to embed new approaches. The industry is wading through natural capital coalitions and metrics debates as we speak.
I think the report could have benefited from having the skills shortage and people section earlier. This is Barratt saying there’s something that’s not going quite right. Also, whilst staff engagement and training is growing, their turnover rate doubled since 2010 (on a larger headcount); maybe that’s what happens when the labour pool becomes less skilled over time? Barratt at least recognise the issue and are responding. Other poor(ish) performance relates to waste and water. They seem to be tackling waste increases, but not water consumption. Perhaps they should benchmark themselves to other companies.
Whilst I like to get a regrouping of targets in one place, the target table p32 feels a little orphaned, perhaps it’s worth putting the targets in each chapter too. And the table text is very small, and some bits are not that clear such as “As above” in the second column of the table. Also, it’s advisable to have SMART targets, rather than open ones that can be treated “flexibly”. And then the key shows four progress icons towards the 2020 aspirations. I would have thought the ‘on track’ icon could be used at times. Yet, they only use the ‘Maintain’ icon. Not sure why. At least they are open about poor waste performance.
It has nice, classic feel with modern design devices. It also feels ready to move to the next level, perhaps to coincide with a reinvigorated strategy in 2016.
You get the feeling that Barratt knows the reporting game. They are clear on what the purpose is, that their journey is underway and how to go about an approach to sustainability. One sign of a confident reporter is simply to use “signposting” so that content relating to corporate functions that are expected in a report are indicated clearly elsewhere; Barratt uses this for its Governance information (p5), for example.
The design is competent, the infographics are good, such as p0 (nought) and p2-3. But actually it is not that easy to read the core body text of the pdf on screen – I had to keep scrolling sideways when zoomed in, as pages are not viewable single-page at a time. In the end I resorted to reading glasses: a reporter making me feel old!
Barratt uses little icons to indicate Principles behind the practice, and which arise on each chapter header panel. I am not sure they are needed there. The reader, if they’re anything at all like me, will quickly forget them and ignore them! Still, such devices have a part to play and are quite well done here.
It is not too heavy to read, despite the small font, and it’s nice and brief (38pp) and navigable. That said, I think there is some small bits of chaff that could be separated from the wheat, such as the detail on developments in information collection systems (p30, at least forty words that could be saved).
All in all, a good job I thought.
Overall the construction industry is much stronger on communicating what it is doing and how it is doing it. These days when you walk past a perimeter fence of a construction site you are assailed with information on safety and neighbourliness, there’s a little window to see through the fence panels, and a strict admittance process at the gate, topped up with a guy, armed with a hose, ready to clean the tyres of departing muddy trucks. And at industry level there is so much going on from national industry strategies to supply chain academies, coalitions, sourcing handbook projects, and steel certification, such as CARES Sustainable Constructional Steel Scheme. It’s all happening.
Of course things do go wrong. But the industry seems to have professionalised how they respond, when they do. Reports such as Barratt’s are a good example of how to keep the message evolving with a periodical publication that tracks progress long term.
The report is assured to AA1000ASS (2008), the sustainability assurance standard, and included some 65 site visits! If that is correct, it would be a truly remarkable achievement – I can scarcely believe it, unless the management system auditor appended her questionnaire through the year. The assurance scope does not specify data points to check for accuracy, which would be preferable. I like the fact that they use a small, local assurance provider. Although I would venture to tentatively, and respectfully, suggest that the assurance provider has only limited experience in sustainability reporting; their website mentions nothing about sustainability management, such as stakeholder engagement, or using AA1000AS.
When it comes to benchmarks and awards, Barratt seems to do well. In fact there’s a plethora; perhaps the report could qualify which are the most demanding ones to achieve.
I guess their experience in reporting means they prefer to opt out of using GRI, or similar. It would benefit the report to explain why. The CRESS G4 Sector Disclosure is useful, despite the high degree of regulation in Barratt’s markets (eg wider discussion heralded by additional requirements in G4-2 on “construction of new assets versus retrofits, refurbishments [etc] and the effect this has on impacts, risks, and opportunities”, or additional requirements in “G4-EN1, materials used by weight/volume”, or EN2…, or CRE2 on water intensity).
• Their next report will be their 13th: unlucky for some? So let this competent reporter shake it up a bit? Let it be refreshed and almost ‘funky’; move to an online format, accessible using mobile device, or as an app?
• Consider assurance options such as external guru/greybeards to provide expert commentary, for publication in an unedited form.
• Consider the use of staff telling the story in their own words.
• Tell the reader about the strategic involvement of stakeholders in strategy making and materiality. [Note: one of the targets is to “Update our sustainability strategy, with input from external stakeholders…”. Note also the extensive detail on engagement online, but which doesn’t state what stakeholders said.]
• Somehow clarify or redesign the performance tracking communication – the table is hard to use.
• Show how GRI/other quality of information principles in reporting are being applied (accuracy, completeness, balance etc).
• Use a larger font.
Alex Nichols runs international consulting projects for business on sustainability reporting, strategy, materiality assessment, stakeholder engagement, assurance and training. Alex is also Associate Director at Paia Consulting, Singapore, Senior Associate Consultant with IMS plc, Bristol, and a Senior Associate Consultant with Gorham & Partners mining strategy and research firm. www.alexnicholsconsulting.com | www.paiaconsulting.com.sg