Ethical Performance
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house builders make headway

October 2005

UK-listed house builders have significantly improved their social and environmental performance over the past year.

The second annual assessment of the 12 UK house builders in the FTSE All Share index shows they all ‘substantially’ upped their performance, scoring 68 out of 100 on average compared with 47 in 2004. The companies, which built 41 per cent of all UK homes completed in 2004, were assessed on 18 criteria relating to health and safety, affordable housing, use of local labour, stakeholder engagement, sustainable design and other issues.

Rachel Crossley, investor responsibility director at Insight Investment, which carried out the study with WWF, said she was ‘extremely encouraged’ by the findings. She claimed they were partly the result of two years of ‘ongoing dialogue’ between Insight, WWF and the companies.

However, she added that companies had also responded to increasing pressure from the UK government and clients, and had begun to see the business benefits that follow better social and environmental performance, such as gaining planning permission more easily and winning more contracts with clients or partners that demand high sustainability standards.

Three companies, Berkeley Group, Crest Nicholson and George Wimpey, emerged as clear leaders, scoring more than 80. WWF and Insight say these companies have now integrated sustainability into their strategies and ‘have set clear objectives and measurable targets for the business as a whole’.

The study found that house builders overall are now ‘markedly better’ at managing health and safety, but they could provide homebuyers with much more information on sustainable lifestyles. ‘The majority of developers are missing a valuable opportunity by not providing customers with information on environmental characteristics of their homes,’ it says.

Like the previous survey, the study found companies often did themselves a disservice when reporting on their sustainability performance by omitting to mention good practice.

WWF warned that, despite the progress, house builders have no room for complacency, and it favours tougher regulations to require them to produce more sustainable homes.

British Land, which has a £12.5billion ($23bn) property portfolio, has produced a 76-page sustainability brief for its new development projects. The brief, for its design and construction teams, contains dozens of action points on areas such as biodiversity, choice of materials and how to take account of interested parties’ views. It says, among other things, that teams should consider sourcing suppliers and materials locally.

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