Savills IM considers ESG issues in monitoring and management of property investments by encouraging property managers to collect and report to our sustainability consultant on consumption, waste and water data where possible, and where we have control of energy consumption, allowing us to create improvement targets for our assets and funds.
In the context of development and refurbishments, Savills IM ensures developments are sustainable and typically delegates the implementation for doing so (via compliance with market standards and best practice) to our development partners via Development Management Agreements. In addition, specialist professional consultants are appointed to provide advice and management of the delivery of the requirements for any environmental performance compliance. In this way, all reasonable endeavours are taken to procure that any investments comply, or indeed exceed, the relevant environmental standards and the responsibility for delivering the results lies with the parties most qualified to do so. Construction works are then procured via the most appropriate route with the professional team and contractors then responsible, via building contracts, to deliver the desired completed product.
Where development and refurbishment activities takes place in Savills IM funds, sustainability and environmental issues of new residential or commercial developments are managed in line with Savills IM's ESG Policy. However, the drivers for the environmental requirements and sustainable strategies within building projects may have more physical influences such as end user requirements, economic viability and central and local government strategy.
In the case of Savills IM's Prime London Residential Development Fund I (PLRDF I), it is typical that a certain level of sustainability consideration would be a condition of any planning consent separate to the UK Building Regulation requirements (defined by statute and therefore the minimum standard for building performance). Such consent would usually include a number of specific sustainability requirements set via a requirement to achieve, say, Code 3 or Code 4 for Sustainable Homes in a residential context. The satisfaction of this condition and achieving the required standards is then monitored by an independent specialist who signs off on the performance of the completed buildings and systems. Whilst the process is similar for commercial developments, the targets and technologies involved do vary. In a commercial context, it should also be noted that institutions as tenants and ultimate landlords have considerable influence on the take up of sustainability measures as ultimately developers are unlikely to bear the full burden of cost for the inclusion of such measures, over and above those required for compliance, where no open market appetite exists.