Views from the industry for 2018
Tina Perinotto | 16 December 2017
We asked a selection of people from various parts of the built environment and its related fields for their views on what to expect in 2018: It’s a mixed bag, but there is a lot of postiive expectations.
Tony Arnel, NDY, EEC
Norman Disney & Young global director of sustainability Tony Arnel says there are three major trends to watch in 2018.
The first is the rapid decarbonisation happening around the world.
“Coal is being abandoned,” he says, citing Engie’s close down of Hazelwood and AGL’s plan to shut down Liddell as domestic examples of the trend.
The reality that this move to decarbonise will be continuing puts the built environment in the spotlight as one of the “most cost-effective ways to save money and decrease greenhouse gas emissions.”
The second major trend is net zero buildings. In Victoria, this is already being promoted by several government departments, he says, including one NDY is working on a project for.
In Canada, net zero is already a major feature of building certifications, he says.
The third major trend is the energy efficiency space.
“Its time has come.”
The built environment is still front and centre for the shift towards decarbonising, combine that with energy efficiency and demand management, and Arnel says it produces a picture for next year that it “can be a very positive year”.
There is still a need for the right policy settings and policy signals, however, as “business wants certainty”.
One of the Australian Sustainable Built Environment Council’s areas of focus is looking at what the trajectory of standards in terms of the building code should be for the next 15 years.
“We know the minimum standard needs to increase.”
Arnel says that while in the past there might have been some resistance within the building industry to increasing minimum standards, now there is preparedness on the part of industry to accept it, “because of the certainty it would provide.
“Industry and business are coming together and business up for the challenge.”
Melissa Schulz, Vicinity
According to general manager sustainability at Vicinity Melissa Schulz the company will continue to improve its sustainability thanks to strong support from the board.
In 2017 there was a good sustainability win, with the company coming top of the Australian Retail category in the annual GRESB report, up from fifth spot the previous year. And in the 2017 financial year the company achieved a Green Star Performance Portfolio rating of 3 stars over its entire 80-plus centre portfolio, up from 2 stars the previous year.
According to Schulz an online micro-site on sustainability will be continuously updated with achievements so stakeholders can keep abreast of developments.
Among initiatives next year will be the company’s first reconciliation plan as part of a staged program encouraged by Reconciliation Australia.
“Reconciliation Australia recognise it’s a journey and encourage organisations to take the time to make sure it’s aligned with the business,” Schulz says.
Many of the sustainability challenges for shopping centres are similar to those other property companies face, she says.
All will be facing the new modern slavery legislation that will be released sometime in 2018. It will assist in the understanding of supply chains with a focus on transparency and will push organisations to better understand their supply chains.
“The risk is quite hidden in that it’s the tier three and tier four suppliers, and it’s hard to get visibility on that.”
Another emerging issue is climate resilience, again a challenge for all property companies, with growing focus on directors’ liabilities and “obviously physical risk and the broader financial risk”.
On energy the company has some small-scale solar systems up and running and the company is investigating further solar system roll outs and the establishment of a long term low carbon target.
The company has also set a target to rate 80 per cent of its rateable portfolio for NABERS Energy and Water by the end of the FY2018.
Dennis Lee, NABERS
Head of technical standards for NABERS Dennis Lee says several milestones are on the cards for 2018. This includes the launch of NABERS for apartments and a new waste too for commecial buildings, plus the co-assess program, which enables low-cost tenancy ratings for a building at the time the base building is assessed. As data over tenancies are captured in any case when the base building is rated, it’s a “more streamlined ways of doing things”, Lee says.
On the waste tool he says the new rating is based on annual waste data for a building and so will better represent a building’s performance, while the existing rating takes a sample of operational data from a 10 day waste audit.
“The new rating will continue to assess the recycling rate of a building, recognising buildings that separate their waste streams for recycling and beneficial re-use.”
NABERS’s new online data management platform, Waste Manager, has been designed to assist.
Also on the books is a new five-year strategy, with industry consultation to start early in the new year, plus a new website that will host significant levels of meta data to assist industry, while maintaining confidentiality over commercially sensitive private company data.
Also on the cards for NABERS is some global expansion, with pilot ratings already carried out in Hong Kong and Jakarta, and dialogue opening in the UK, Israel and Dubai.
Lee says the biannual conference in June will include a celebration of NABERS’ 20 years in operation.
Phil Wilkinson, AIRAH
At AIRAH, Phil Wilkinson, executive manager – government relations and technical services, says the phase-down of HFC refrigerants – 85 per cent by 2036 – will be a priority for 2018. According to Paul Hawken in Drawdown, this is “the number one thing that has to be done for climate change”.
More work will also continue in the mid-tier buildings space after the collaborative work between the City of Sydney, the NSW Office of Environment and Heritage, AIRAH, the Green Building Council, the Institute for Sustainable Futures and the Energy Efficiency Council, among others.
At that level the view is promising, but it’s almost certain there will be no movement from a federal policy level to generate momentum. Instead the push is likely to come from the state and better commissioning of buildings from stage one.
“I’m losing a bit of confidence that it’s going to be led purely from the top,” Wilkinson says. “The real opportunity is from the bottom up.”
Ken Morrison, Property Council of Australia
According to Property Council of Australia chief executive Ken Morrison, 2017 has been all about the supply side of the energy debate and 2018 needs to be more about the demand side.
“The cheapest emissions to reduce are the ones never created in the first place so energy efficiency can be a big opportunity to meet the Paris targets, and the built environment needs to be part of that.”
He says 2017 was a challenging year in politics.
“There have been so many difficult challenges in Canberra because there have been so many issues to attend to in 2017.”
This includes the “whole state of South Australia’s energy grid going down multiple times”.
Morrison hopes there will be some movement on removing the barriers to accelerating distributed energy at scale.
“Some of that is regulatory rules and some is pricing, in terms of plugging into the grid and power being priced in the same way as a power plant would be priced.”
Battery storage will continue to become more widespread and this will see the built environment play a much stronger role in off-grid generation, he says.
Morrison flagged the next evolution of the cities agenda.
In fact on Tuesday the PM Malcolm Turnbull announced a new minister for cities Paul Fletcher, a move seen by many as a positive with the portfolio elevated out of its previous parliamentary secretary status.
Morrison says Cities Deal – where the three layers of government bring their policies into alignment to drive better economic outcomes – will be expanded in the new year from Launceston and Townsville to the more complex area of Western Sydney.
Morrison says creating liveability and sustainability will be seen as supporting the “jobs and growth” economic agenda.
There’s an election to prepare for
Of course much of the May federal budget will be positioning the federal government for an election in 2019.
Morrison says the focus on housing in the 2017 budget will hopefully be extended to improve the build-to-rent model.
He also hopes to see some of the details from the 2017 budget to ensure better social and affordable housing outcomes.
“There will be strings attached to those.”
The planning debate will surface again, and stronger than ever, observers say. In Brisbane it emerged as a prime concern in the Queensland election almost delivering the Greens a seat in South Brisbane on the strength of concern for overdevelopment issues (and picking up a seat in west Brisbane).
Morrison says the debate is commencing but the reality is that the population will continue to grow, especially in our largest cities, “and we need to make sure we’ve got the right planning framework so that cities and Australia are better for that growth”.
“We need a good investment pipeline into infrastructure and that means the economic infrastructure as well as the social, the parks and services.
“Anyone who thinks Australia won’t grow is living on a different planet.”
The Property Council’s new data room has some handy economic and property statistics including the rate of migration and population growth to see how trends have changed.
Andrew Petersen, Sustainable Business Australia
Andrew Petersen, chief executive of Sustainable Business Australia, says the year ahead for corporates will be much about climate related disclosure.
“There’s a lot of movement with the Climate Disclosure Standards board priming their membership and constituency for a difficult but productive year of work,” he says.
Mining oil and gas industries are most impacted.
The federal government also needs to report to the United Nations by mid year on the Sustainable Development Goals SDGs, in a high level political forum.
“That’s fairly big from a national perspective and the implications for business.”
On the social sustainability side another big issue will be the next phase of the modern slavery agenda with a final report on the topic tabled this month to a parliamentary committee recommending a suite of initiatives.
The report recommended mandatory supply chain reporting requirements for large businesses of $50 million or more in revenue.
Petersen says the work will result in legislation under criminal law in relation to modern slavery and the way business reports its activity against that obligation.
“Most business submissions supported the need for legislation and were supportive of the framework that the UK had established which is ostensibly, ‘report and if not why not?’.”
“Businesses won’t be penalised in short term for not reporting but the whole process will be important work for companies and for sustainability offices and supply chain professionals to being able to understand where supplies come from.”
The other big issue will be around gender diversity, “particularly as business has identified on the back of the Edleman Trust Barometer that business is wholly untrusted and where individuals are trusted.”
Investors want to know more
Petersen says there is also change in the investor community “increasingly interested in the sustainability performance of companies, particularly around water, forestry and materials use and that’s because more and more data is becoming available.
“So the investor community is having an epiphany and asking a lot more questions and in some cases harder questions at investor briefings on correlations between green performance and corporate sustainability verifications.”
A big lesson from 2017 he says was that the postal survey on same-sex marriage “proved beyond a shadow of a doubt” that Australians wanted to send a clear signal on a social issue.
Any notion that people were not concerned, that it wasn’t a priority issue and were not putting it front and centre was scotched. It was pretty obvious that business also wanted to send a clear message on the issue, Petersen says.
It was probably “the first time in living memory” of business supporting a social agenda and being aligned with it.”
“Business has got a much more sophisticated about its responsibilities.”
Tim Williams, Committee for Sydney (and soon, Arup)
Departing Committee for Sydney chief executive Tim Williams, and soon to be Arup head of cities in the new year, says 2018 will be crunch time for whether the Sydney community will buy into the growth agenda for Sydney.
Williams, also a frequent and popular contributor to The Fifth Estate, says the city needs “public transport like we’ve never done before”.
“We need to deliver the infrastructure.”
The development industry needs a bit of humility, he says, to say that historically “we’ve let the community down and built houses before the infrastructure”.
It needs to engage with the community far more deeply on growth and where it should be, not just passively.
Land use and transport integration is much more to the fore, and the critical project is mass transit rail.
We will know whether there will be success, he says, if the government puts the Sydney Metro West first, ahead of the F6 extension (south to Wollongong).
“Otherwise we will know it’s business as usual.”
Luke Menzel, Energy Efficiency Council
Luke Menzel, chief executive of the Energy Efficiency Council, says 2017 was the year energy management came into its own.
Those in the sustainability space have always known there was a carbon dividend from energy efficiency, he says.
But the whole topic of energy efficiency has now has broken out from being a conversation mostly between sustainability managers and been pushed up to the boardroom table.
Menzel says energy used to be seen mainly as a procurement thing. Now it is recognised as a “critical feeder” into having the strong economic fundamentals we want.
For the boardroom it has become a material issue and a strategic issue.
“The carbon and climate and economic imperatives have all come together.”
This means that there have been a lot of organisations “scrambling” to get the right measures in place. As a result, a lot of new networks are being created.
“2018 will see a lot of action,” he says.
“A lot of organisations will be looking to mitigate risks and to capture the benefits of new technology.”
They are not waiting on policy. Lack of policy will be just factored in as another risk, he says.
“We are beyond the point where waiting for leaders to act is tenable.”
Menzel says it will be important for the experts in the energy space to “step up and give businesses around the country the support they need.”
That means giving good advice.
“No one approach or technology is the silver bullet.”
There will need to be the right mix of approaches and technologies for a specific organisation’s needs.
There is, however, have plenty to choose from, including generation, power purchase agreements, demand response and energy efficiency.
“It is an incredibly exciting time to be in the energy space,” Menzel says.
“We need to keep an eye on the real task ahead.
“So many businesses are really hurting from energy prices. We need to ensure they get the support they need to weather what’s proving to be a pretty rock transition.”
And from our TFE readers who entered the competition for a weekend for five people at the Tara Blue Mountains Resort here is a selection of the most interesting trend forecasts they submitted, for 2018
- The energy and water nexus to achieve efficiency and savings
- A further focus and reduction of retail end-use single-use plastics: plastic shopping bags, straws, coffee cups
- More businesses will get on board with recycling – from plastic bottles to food waste within their offices, and by doing so making it a team building/bonding activity
- Increasing gas and electricity prices
- Improvement of technology and reduced prices associated with battery storage
- Federal and state governments mandating a sustainable energy target which will meet our requirements under the Paris agreement (ha ha)
- There will be an increase in landlords who are willing to lease their properties or under-utilised rooms at a reduced rate to house the increasing number of people and families struggling to meet the high costs of housing. We are seeing more philanthropy and social awareness in the private residential market, internationally and the early stages of it in Australia, so there is potential for this area to grow considerably
- Modern slavery and supply chain governance
– with Willow Aliento