Aim
To develop an understanding of the key requirements for a business case/ justification in support of the implementation of ‘sustainability' measures.
Learning Outcomes
Upon completion of the assignment the student will have:
- An understanding of the multi-disciplinary nature of many of the sustainability solutions being developed and of the emerging roles of the various built environment professions and stakeholders.
Introduction
The technical interventions required for improving the life-cycle performance of commercial buildings in relation to energy consumption and sustainability are generally well understood. The business case that accompanies these interventions however is less well developed. As often, most significant sustainability measures will attract additional capital cost, it is imperative in a commercial world that the benefits of such measures are well defined.
Increasingly the sustainability debate in the built environment is moving beyond energy savings alone, with issues such as health, wellbeing, productivity and resilience gaining interest. Several major multinational corporations have shown increased interest in such measures citing Corporate Social Responsibility (CSR) policies as the main drivers.
However, a challenge still remains in presenting a robust business case to support such measures. This is especially true where, in the commercial workplace, energy costs can be significantly outweighed by employee related costs and where other benefits (health, wellbeing, productivity, resilience) are difficult to measure.
Overview
Your client (a commercially focused developer) is currently conducting a feasibility study for the redevelopment of an empty 1970's commercial office building. The developer will occupy approximately 50% of the refurbished building as a corporate headquarters with the remainder being sublet for use as office space. The developer will give the building a face lift to improve its image, but will largely keep the current layout and fenestration pattern.
The Project Architect is encouraging your client to deliver a building that can be an exemplar of sustainable development. However, the clients key real estate advisor has raised concerns in relation to this and has advised the client that the building should only meet minimum regulatory requirements in order to maximise return on investment.
You have been commissioned to examine these proposals and to produce a reasoned business case for the way forward that offers best overall value.
Task
Based on the scenario outlined in this brief produce a business case for what you believe to be the best way forward for your client (note that this is not an either or case and a proposal somewhere in the middle may be feasible). You should consider the project in terms of the lifecycle of the building not just the point of handover. As the client will occupy a significant area of the building running costs and maintenance will be of importance. At the same time the client is commercially focused so capital cost and ‘value' are critical.
Your case should include, were relevant, simple calculations to support your proposal and details of any incentives available. You may need to refer to benchmark energy data to support your calculations (if necessary you can make an assumption about the overall size of the building).
Issues that are difficult to measure directly in monetary terms or are ‘intangible' may be included in your case. In such situations simple assumptions should be made to quantify the potential benefit (or cost). The approach used should be supported by reasoned argument and evidence from the literature.
you are not being asked to conduct a valuation but to present a reasoned argument for the way forward
you are not required to cost the measures you propose, but should consider over what period of time these measures are likely to pay for themselves (this should be supported by evidence from the literature)
you may chose to focus your study on a particular aspect of the materials covered in the course, such as productivity (with health and wellbeing), energy use or resilience to the impacts of climate change
Use Hong Kong developer Sino Group as the company in the assignment