Banks take note of sustainability

February 2010 - Sustainable facilities in the Australian and New Zealand banking sector have become essential elements of good corporate governance, as SUSAN WATERER from UGL Services explains.

Pressure to achieve much higher levels of environmental sustainability in business operations is very real, in accordance with both public expectations and government legislation and mandates. Extensive research, including seven surveys across Australia and New Zealand, demonstrates how major banks in these two countries seem to be stepping up to the plate, with a range of emission reduction targets and realistic initiatives to meet these goals.
This article explores the concept of sustainable facilities in the Australian and New Zealand banking sector and investigates the savings already achieved by two of its major clients.
The emerging topic of sustainability raises several key issues for all organisations. Stringent environmental reporting standards, increased awareness of environmental responsibilities, lack of understanding within the organisation, workforce shortages and questions around ROI are all core considerations when securing a sustainable future. Now, more than ever before, Australian and New Zealand banks face growing pressure to ensure that the highest levels of environmental sustainability are adhered to across their property portfolios.

Australia’s Carbon Pollution Reduction Scheme (CPRS) will come into effect on 1 July 2011, with a target of reducing Australia’s emissions by 25 percent below 2000 levels by 2020. Interestingly, the bulk of Australia’s carbon emissions are produced by business and industry, yet there appears to be a lack of ‘valued awareness’ within organisations regarding the link between day-to-day energy consumption and its direct impacts on emission levels. This is sometimes further exacerbated by employees adopting an indifferent attitude towards environmental issues and sustainability at the workplace. Figure 1 demonstrates the range of GHG Emissions contributed by FTE in 2008. The numbers may appear reasonable, yet some Australian banks have close to 35,000 employees.

LONG-TERM PLANNING
Return on Investment (ROI) from the implementation of sustainability initiatives is also rarely realised in the short term (less than 12 months), particularly with banking sector organisations tending to be risk averse. In addition, most Australian and New Zealand banks generally lack environmental/sustainability representation at senior management level and do not have access to adequate environmental monitoring and reporting tools, such as UGL Services’ innovative Environmental Reporting System (ERS).
It would be fair to say, however, that Australian and New Zealand banks have been very proactive in implementing plans to reduce their carbon footprint and become completely carbon neutral. Most Australian and New Zealand banks have put in place a variety of far-reaching programs to ensure that their facilities meet strict environmentally sustainable targets.
Imagine a company that constructs a $6.5 million on-site gas-fired generator at its main data centre that, when completed, will enable a facility to save around 20,000 tons of emissions each year through the use of gas and capture of the excess heat to power cooling and heating equipment. Now imagine that same company replacing 12,700 older computer monitors with energy-efficient flat screen monitors, and delivering over 400 projects across its portfolio over a four-year period that will see an annual 60,000-ton reduction in CO2 emissions. That company is NAB.
NAB aims to become carbon neutral by 30 September 2010. In meeting its carbon neutral goal, NAB, in partnership with UGL Services, has started several sustainability initiatives, from practical solutions through to awareness campaigns, with the banking sector leader creating 18 ‘Green Volunteer’ teams to help drive a reduction through awareness in energy, water, paper usage and ‘waste to landfills’ in the workplace. Perhaps one of NAB’s most successful achievements to date is the setting of a 20 percent emissions reduction target from its 2006 base year level. As of June 2009, around 21,000 tons of annual emissions have been reduced so far and the bank is on track to meet and possibly exceed its 20 percent target. A further 12,000 tons have been saved through 5 percent renewable energy purchases.

MANAGEMENT SYSTEM UPGRADES
Westpac Banking Corporation (Westpac) has also made a strong commitment to effectively reduce carbon emissions by not offsetting them. In fact, Westpac New Zealand (Westpac NZ) is the first bank in the world to achieve Certified Emissions Measurement and Reduction Scheme (CEMARS) certification and the first bank in New Zealand to have its emissions data audited by an independent third party. Under the umbrella of its ‘10 Sustainability Goals (2009–2012)’, Westpac NZ has initiated a variety of strategies to ensure that its facilities (both commercial and retail) are performing at optimum levels. The overarching aim is to reduce emission levels from 14,059 tons CO2 in 2009, to 11,842 tons CO2 by 2012.

ONGOING COMMITMENT
Keeping the momentum going will be crucial in ensuring that sustainability initiatives meet, if not exceed, their set targets. Maintaining a sustainable facilities management framework in the Australian and New Zealand Banking sector requires a certain level of commitment and stakeholder buy-in. Banks will need to continue taking note of the key drivers for sustainable facilities, including:

• the potential for achieving long-term savings from a financial perspective;
• improved brand perception and market credibility to customers and shareholders;
• internal management mandates; and
• government reporting regulations.

The points below are indicative of the future trends at Australian and New Zealand banks in relation to sustainable facilities:

• increasing focus on ensuring systematic data collection and reporting on water usage at facilities;
• comprehensive site-by-site energy management analysis for corporate offices, retail branches, business banking and data centres;
• managing and taking a greater responsibility for indirect (Scope 3) carbon emissions (supply chain to and from facilities);
• growing focus on reducing energy consumption at data centres. Opportunities exist, such as server consolidation and virtualisation, to ensure servers are operating at the highest levels of efficiency. Data centres are easily the largest users of energy at banks, accounting for, on average, 24 percent of total building-related energy consumption;
• exploring opportunities such as on-site trigeneration, which will allow banks to generate electricity at an on-site gas-fired facility, where the heat produced can be used for heating and cooling purposes.

As research depicts, a strategy that incorporates a bank’s everyday operational activity and the needs of its workforce, together with an equal focus on sustainable practices across its entire portfolio, is key to creating the bank balance of the future.
Further information is available within White Paper “Sustainable Facilities in the Australian and New Zealand Banking Sector”, commissioned by UGL Services and produced by growth partnership company, Frost & Sullivan.

Susan Waterer has worked within the marketing communications field for a total of nine years. She is currently the marketing & communications manager for UGL Services, having been with the company for a total of five years.
She emigrated from England in 2003, having achieved a BA (Hons) degree in public relations and media studies.
UGL Services provides outsourcing services to property users worldwide. The business has an end-to-end model that includes corporate real estate advisory, integrated facilities management, project management and environmental management services. The business includes UGL Premas in Asia and UGL Equis and UGL Unicco in North America.

More information
UGL Services www.ugllimited.com

FROM AIR-CON TO TIMECLOCKS
“Westpac NZ initiated a NZ$1.3 million upgrade in air-conditioning units, timeclocks, and BMS (building management system) upgrades across the branch network which resulted in a 40 percent reduction in CO2 emissions in the first 12 months due to energy savings and an overall 28 percent CO2 emissions reduction. This also led to significant cost savings in repair and maintenance spending (R&M) for air-conditioning units. This is all part of a wider facilities and sustainability strategy within The Westpac Group.”
Jack Crutzen, national facilities manager, Westpac New Zealand.