Facilities management (FM) is seen by many clients as a good area in which to cut costs. As such, the sector is at risk of being disrupted by tech firms that can provide basic services more cheaply. Unless FM can pivot and add strategic value for clients, this risk will persist.
The Sustainable Facilities Management Index (SFMI) wants the sector to become a sustainability leader, providing strategic value for customers by aligning services with their goals. However, there are a number of barriers for many FM providers.
The sector lacks a reputation in sustainability leadership, and therefore isn't the first choice when it comes to providing services that contribute to achieving zero carbon.
FM services are typically restricted by contracts and revenue in trying to be more ambitious than their clients' requirements.
Providers often take the easy route by measuring as few emissions as possible, and therefore do not train staff in carbon literacy such as those emissions associated with purchased goods and services. This does not help foster a reputation as sustainability leaders.
With zero carbon being a key ambition for the private and public sectors alike, FM is in a pivotal position to influence workplace emissions. If the sector can build its reputation in sustainability, train its employees and embed an understanding of zero carbon into the services it provides, it can add value that potential cost-cutting rivals cannot. However, to move forward as a sector and build its reputation, all FM providers must measure emissions in the same way.
Together with FM provider BAM FM, the SFMI argues that the sector should be taking more responsibility for measuring and reducing emissions. Although many FM providers will set a net-zero target based on their immediate, direct emissions – referred to as scopes 1 and 2 under the internationally accepted Greenhouse Gas Protocol – these cover nowhere near the full extent of those that it can influence.
The SFMI and BAM FM have therefore teamed up with a group of businesses, including RICS, to develop a standardised approach, so FM can calculate an expanded scope of carbon emissions from its services and engage customers in reducing them.
Two frameworks are provided, for different but related purposes.
Outsourced FM providers can measure their own corporate greenhouse emissions in a way that allows comparison across the sector. This means zero-carbon targets are aligned, maintaining the reputation of FM.
FM providers and in-house FM teams can use the second framework at an operational level to identify emissions that they have contractual scope to influence and manage. This also offers potential to highlight activities that are currently outside their scope of work but where emissions could be reduced if there is flexibility in the contract.
These methods are detailed in the report originally published in November. This represents the first stage of a wider effort to position FM as vital to achieving zero carbon in the built environment.
The second stage begins in September, and aims to create a platform for FM scope 3 data. This is designed to help understand the sector's impact in building operations, developing service-level emission factors based on real-life data. FM will then be able to report more accurately about its impact on emissions, and plan its decarbonisation pathway.
'An FM provider's carbon impact is larger than many businesses will report, because they do not want the burden of emissions reductions. This is exacerbated by the explosion of net-zero targets announced by providers. Many FM providers are therefore removing emissions from the scope of their inventories to make it easier to hit an arbitrary net-zero target. By doing this, FM is not positioning itself to address the problem of reducing commercial greenhouse gas emissions.'
Sunil Shah, advisory director, Acclaro, and founder, SFMI
By creating a standardised approach that FM providers can follow to account for their emissions, the SFMI wants them to take responsibility for more emissions-intensive services.
Net-zero carbon has become a business requirement in response to new regulations and desire for action from customers and employees, which together reflect concern about global warming. So far, though, only a minority in FM have seen net zero as an opportunity to increase value for clients.
Many regard it as a marketing tool. But to truly contribute to reaching net zero, FM professionals must understand all the opportunities to cut carbon, quantify these, and then engage with the clients to ask how the contract can encourage such reductions.
The typical FM contract is one of the main barriers to making reductions because clients pressure the provider to lower the cost, stripping service levels to their bare bones. The SFMI and BAM FM thus aim to help the sector create more emissions-focused arrangements, aligned to the strategic zero-carbon targets of the organisations that purchase their services.
Most FM providers currently see their impacts in terms of only their direct emissions, scopes 1 and 2, which includes the fuel from transport and their building operations. Some go a little further and measure their indirect emissions from business travel and waste, part of scope 3.
As a whole, however, this represents less than 20% of the providers' full scope 1, 2 and 3 impacts. It means that most of FM's carbon emissions are going unmanaged and unreported, even though some providers will be claiming their operations are net zero in coming years.
'Net-zero carbon has become a business requirement in response to new regulations and desire for action from customers and employees'
Working under the Greenhouse Gas Protocol, the SFMI and BAM FM will publish rules for what an FM provider should measure as part of its corporate inventory. The intention is to encourage inclusion of a greater range of relevant scope 3 emissions, such as purchased goods and services and capital goods that FM uses in providing services.
The rules even push FM providers to identify emissions from waste and energy consumption associated with their operations on customer sites. For example, on-site catering services generate food waste and are energy-intensive, yet are not recorded by the FM provider to help achieve zero carbon.
Alongside this, the partnership will launch a tool that can work at a contractual rather than the corporate level to help FM engage with clients. This can be used to identify emissions associated with high-value contracts, which the facilities manager can use to measure these impacts. In turn, they will be able to set targets to reduce carbon for that client.
The approach will work both for in-house FM teams and outsourced providers, improving their carbon literacy. It will also demonstrate to the wider business what role FM can play and the resources it requires.
The project is about positioning FM as a service that can make businesses more sustainable by promoting the following.
FM needs to start conversations about the emissions reductions it can achieve, which will increase the value of its services.
When specific services in contracts and the associated carbon emissions are measured, we can innovate and encourage decarbonisation.
Relationships along the supply chain will improve as FM aligns with customer zero-carbon values, which are now becoming business imperatives.
The selection process for FM services can be improved by integrating into contracts the ability to invest in carbon reduction measures, initiatives and targets.
The FM provider can position itself as a strategic partner to the client in achieving net zero.
To continue its commitment to sustainability, BAM has embedded its Net Positive Future strategy into its core business values. This commitment, alongside its wide range of services and large client base, make BAM an effective partner for the SFMI in this project.
'We know we need to be more efficient and get our own operations to net zero. We can also make an even bigger impact by helping clients remove carbon from their operations and from the materials used to build and maintain their existing estates and future buildings.'
James Wimpenny, CEO BAM UK
The partnership between BAM and the SFMI has already resulted in one report on this topic. The updated version of this report is now published and presents the business case for FM providers taking a wider role in reducing emissions, as well as giving them the tools to do so.
Stage two of the project beginning in September will take six to eight FM providers that are keen to test the approaches and inform development of a data platform that the sector can use to increase its understanding of the influence it can have.
As part of the project, the SFMI has convened a critical review panel that combines professional groups such as RICS, in-house FM teams and outsourced FM providers to ensure that the approach will be accepted by the sector.
This project will give FM, as a customer-focused business, the tools to measure and communicate what it can contribute to sustainability in the built environment, and how it can reduce its impact by adapting its services and accounting for the resulting emissions.
Prof. Sara Wilkinson FRICS, Dr Gill Armstrong, Dr Kusal Nanayakkara, Mark Willers FRICS, Prof. Jua Cilliers and Dr Robert Fleck 08 December 2023