“If you can keep your head when all about you are losing theirs. . . Yours is the earth and everything that’s in it…” …Rudyard Kipling

While markets across all industries are in a state of stress and chaos at the moment, it is now that the true industry leaders will prove themselves as they keep sight of the business fundamentals that underpin long term profitability.   Cost management is the key focus and due diligence in all business aspects is required, not just to survive but to consolidate for the future when conditions improve.  The skill is to trim the sails and stay in the race.

There are restrictions on capital funds and a degree of talk about delaying projects and cutting back on capital works programs. Environmental sustainability for some businesses has taken a back seat as recovery is worked out and debt and financing options are reviewed.

To maximise return we must continue to focus on sustainability and the opportunities to advance in this area to meet future tenant and regulatory demands.  The danger of short term cost cutting is that the long term positioning of the building can be compromised as the demand for sustainable, energy efficient and star rated buildings increases.

• The Federal Government has stated that they will be moving the minimum NABERS energy rating from the existing 4.5 to a 5 star base building rating (previously ABGR rating) for buildings they tenant. 
• The Queensland Government has stated that from 2010 they will require all new buildings to meet a 4 star minimum design standard. 
• In NSW the Government has a minimum 4 star rating and is currently moving to 4.5 stars, while making a longer term commitment to have carbon neutral operations.
• Large corporate companies are following with minimum rating requirements but at times struggle through with the low vacancy rates and limited options currently available for their space requirements.
• While most super funds currently require portfolio managers to have a sustainability platform and a policy on sustainability in place, how would the market change if the supply side moved the way the government has and required minimum performance before providing funding and investment in the property allocation of their portfolio?

Sustainability can be a key factor in Corporate Social Responsibility delivery, but strategically applied environmental sustainable initiatives can also support your fiscal and market returns with implementations such as;

• new technology E1lighting upgrades at $50psm achieving 6 watts psm comparing favourably with traditional costs of $200psm and 9 watts psm
• new technologies for data rooms including nitrogen cooled racks that remove the requirement for air cooling

The Cost, Risk and Return of sustainability is building specific. When completing due diligence for purchases or undertaking an existing portfolio review it is critical that all options available to improve the building efficiency and operating performance of your property are fully assessed to realise the true potential of your investment.

Responsible Sustainability is financial responsibility.