WE ARE COMMITTED TO SUSTAINABLE HOUSE BUILDING AND PLACE MAKING
Our ambition of significantly increasing our output of homes is underpinned by our dedication to sustainable and responsible homebuilding. As a result economic, social and environmental principles are central to our business strategy and guide our day-to-day activities.
OUR ‘BUILDING A LIVING LEGACY’ STRATEGY
We continue to embed our Building a Living Legacy (BLL) strategy to improve the quality of life for our customers, enhance local communities, support our operations and deliver value for our investors. The strategy was developed with Jones Lang LaSalle (JLL) during 2016, through a detailed materiality review, looking out to 2024. Given the significant socio-political, economic and regulatory change since then, in late 2018 we commissioned JLL to conduct a second materiality review to 2030, the findings of which are explained in more detail below under identifying our sustainability priorities - medium to long-term.
We continue to consult upon relevant policy and regulatory matters, and participate in focused stakeholder groups to share best practice and to enable us to better understand important forward looking trends, thereby ensuring our strategy remains future proofed.
To manage our health and safety and environmental risks, the Group continues to maintain its existing systems. Our safety management system is accredited to BS OHSAS 18001:2007 and the environmental management system has transitioned from ISO14001:2004 to the 2015 standard.
To aid transparency of our purpose, business model and help inform our strategic focus, we have completed a review of our practices against the United Nations Sustainable Development Goals (SDGs). We have a material impact on many of the 17 SDGs (see our objectives). Whilst this is a preliminary alignment exercise, we believe we have the ability to make a long-term positive contribution to society through our operations and outputs. Collaboration with our stakeholders will also enable them to make a difference.
We recognise that rapid changes in society are being enabled through technology. As a result, customer and community aspirations are becoming more heightened and brand preference is harder to earn and maintain than ever before. In addition, stakeholders and investors are expecting greater transparency from companies.
We believe in being ‘purpose-led’ and we are developing our objectives and performance with regard to Environmental, Social and Governance (ESG) reporting. To fully communicate our progress this is the second year in which we are publishing a standalone Sustainability Report alongside an executive summary of our BLL strategy and performance in our Annual Report.
Enabling community networks and creating strong stakeholder relationships throughout the development life cycle is a key focus for the Group, which we are implementing through our new Community Engagement Strategy.
As partners of the Considerate Constructors Scheme (CCS) we promote the highest standards of considerate construction. Our CCS scores are increasing and compare favourably with the construction industry. Furthermore, our community outreach programmes are more inclusive, as demonstrated by the case studies in this report and on our website.
Since publication of the latest NextGeneration benchmark report in late 2018, we are addressing some of the priority findings to drive further improvement. Key to this is all our people completing a bespoke two year BLL training programme through the Supply Chain Sustainability School E-learning portal. Each colleague is tasked to achieve improved competencies across environmental and social sustainability.
In addition to the ever-changing global macro socio-economic conditions, our licence to operate will also be significantly informed by the new London Plan. The Plan is subject to an Examination in Public (EiP) in 2019 and will be adopted in late 2019/early 2020. In addition to working with the Home Builders Federation (HBF), UK Green Building Council (UK-GBC) and London First to inform the Plan, we are also collaborating with the Mayor of London in areas such as low carbon, circular economy, biodiversity and green infrastructure. We believe reciprocal working practices with policy makers and peers will help us deliver sustainable homes and places for Londoners, and inform our licence to operate.
Overseen by the Board, our BLL Steering Committee meets quarterly to provide high-level sustainability governance and ensure our strategy is being successfully implemented. Our CEO chairs the committee, which is made up of senior level representatives from across all business functions.
The Committee is further assisted by departmental champions who support various forums, including our Innovation and Health & Safety Forums. The champions are also invited to attend the Steering Committee to share knowledge and to gain more detailed insights. This approach is proving to be useful in strengthening the champion’s network and embedding the BLL strategy throughout the business. Furthermore, external organisations are invited to the Steering Committee to share knowledge and highlight ways to improve our sustainability performance.
In 2018, the Board undertook a high-level business risk review. It recognised that the implementation of the BLL strategy was helping to manage the Group’s principal related risks and uncertainties, and therefore sustainability was considered to be of low material risk. The review is explained in our Annual Report.
The Group’s sustainability performance is regularly reviewed by the BLL Steering Committee and includes the mitigation of a number of socio-economic and environmental risks and uncertainties.
During the reporting period we achieved 87% of our objectives and we attained a Gold award from NextGeneration, the sustainability benchmark of the UK’s largest 25 housebuilders. Whilst NextGeneration recognised our strong governance and risk management, and assessed our public reporting as the most improved in comparison with our peers, we will aim to further improve public disclosure and transparency during 2019–20. Consequently, our voluntary carbon disclosure can be seen in the Directors’ Report within our Annual Report, one year ahead of mandatory AIM listed company requirements.
Notwithstanding the broad political consensus to improve the supply and quality of new homes and places, changes in laws, policies and regulations, such as through the Hackitt Review, will have a direct impact on the Group and the costs incurred on each development. We are therefore investing in the appropriate level of resource to ensure the potential impact of these changes are mitigated in an appropriate and cost effective manner.
We aim to operate as a responsible business, hence during 2018–19, we have undertaken a range of policy, regulatory, indices and standards reviews. This has culminated in our full materiality review to look beyond our current 2024 horizon, to set out a vision to 2030. This review is expected to shape our BLL strategy and its supporting objectives and policies.
Four main assessments (covering 27 material issues) were completed including: legislative and peer reviews, consultations with members of the Board, and interviews with build to rent and housing association partners.
The results of these assessments are being used to update the issues material to our BLL strategy. Whilst many key issues remained of high importance such as health and safety, energy, carbon, waste and resource management, there were also issues of elevated importance that were deemed to be material.
These included health, wellbeing, land degradation and pollution, and for the first time air quality. The top 12 material issues are noted in the table here. A range of further issues such as urban agriculture through to alternative capital raising / funding models will also inform our future work. The importance of communicating our BLL strategy to our stakeholders was noted and our partners also encouraged us to learn from them in areas such as place making and lifecycle design.
With the assessment stage now complete, we are considering with JLL the implications on our BLL strategy and its roadmap. A significant factor in completing this work will be the adoption of the new London Plan.