Fit for business: Improving health and wellbeing in commercial real estate
Paul Sutcliffe considers how building owners and operators can improve the wellbeing of building users, and gives an overview of three major third-party building certification schemes
I have been practising as a sustainability consultant since 1998, and have witnessed rapid and significant growth in our industry during this period. Sustainability as an agenda item has changed from having a primarily reactive and compliance-based focus to one that supports proactive review and improvement of business activities to drive positive environmental and social outcomes.
In my view, one key reason for the increased attention on sustainability is the growing awareness of, and emphasis placed on, collective and individual health and wellbeing (H&W).
We should distinguish between 'health and wellbeing' and 'health and safety' (although the two are related). Health and safety is about protection and prevention. It aims to keep people free from harm. H&W is more about enhancement, focusing on positive improvement of people's lives.
H&W must be considered a fully-fledged sustainability agenda item. Think about the often-repeated sustainability definition: 'development that meets the needs of the current generation, without impacting on the ability of future generations to meet their own needs'. People are central to this. If buildings do not support the H&W of their occupants, visitors, customers or local communities, how can they be considered sustainable?The breadth and complexity of H&W can result in commercial building owners and operators struggling with where to focus their efforts. Do they have to adopt a formal set of standards or certification scheme in order to make progress? In this article, I pose some practical questions to help building owners and operators consider how they can take H&W forward, as well as exploring some existing standards and certification schemes.
What's driving this trend?
For many professionals working in the built environment, H&W feels like a relatively new buzzword. In some ways this is surprising, given that the subject has been around for many years; the term 'sick building syndrome' was coined by the World Health Organisation (WHO) in 1986.
In recent years, the subject area has received a massive upswing in interest. Drivers of this trend are numerous and complex; in short, I attribute it to:
- Societal and individual-level leaps forward in awareness of H&W
- Big data and democratisation of data
- Exponential growth in related policy and legislation.
As a result, the understanding of the consequences of good or bad H&W is increasing. The impact of poor employee H&W on 'the bottom line' performance is accepted and recognised. Often quoted is the proportion of business overheads that relate to staff costs: something like 95% for the professional services sector.
Happy, comfortable and healthy staff are key to securing productive, quality output, with lower sickness and absentee rates. Additionally, unhappy staff communicate – they will highlight perceived organisational failings to the world.
Lastly, in real terms, these are people we are talking about, with families and friends, hopes and dreams. Business (including building owners and operators) has a moral duty to consider this.
Where do we start?
A structured approach is helpful. Below I present a simple and high-level five-step plan for building owners and operators to follow when seeking to deliver buildings that better support the health and wellbeing of their tenants or visitors.
- Map (identify boundaries)
a. Define key bits of terminology – ask yourself, does my approach need to pick up on health and safety, access, inclusivity and community engagement, or are these aspects already operating at best practice levels? b. Consider scope – do you operate across the whole property lifecycle, and therefore will you need to consider H&W for both new developments and standing investments, as well as acquisitions and disposals? What is your level of influence at each of these property lifecycle stages?
- Materiality – What specific issues are relevant and material to your buildings and tenants? Start by drawing up a 'longlist' covering all potentially relevant issues, such as access to daylight, access to healthy food, indoor air quality, and so on. The list should be drawn from various sources, including legislation, risks, and opportunities associated with stakeholder needs and best practice guidance (including third-party building certification schemes – more on this below).
Still struggling to work out what is important? Ask people. Tenants and visitors know what works and what doesn't. Carefully structured questionnaires can inform. Air quality and sound nuisance may, for example, be considered more important than other issues.
- Manage (implement controls and improvement) – Follow a 'plan, do, check, act' approach. Plans don't need to be complicated. Remember, H&W initiatives need to be communicated. The more complex they are, the harder they are to explain – and the less likely it is they will be understood and accepted.
- Measure, monitor and review – Measuring impact, monitoring outcomes and reviewing progress (the checking and acting part) is vital. It can inform future programmes and next steps, and be rolled out to other buildings and property types.
A simple but well-structured systems-based approach will help manage risk and drive improvement at individual buildings and across a portfolio.
Third-party certification schemes
In commercial real estate, third-party performance validation and certification schemes play a vital role in the evolution of buildings. This has also become true for H&W.
The benefits of third-party certification boil down to three areas. While there are more, I believe these points are recognised as being the most important.
- Tenant attraction/retention – Tenants are increasingly interested in the H&W credentials of the buildings they occupy, particularly in the corporate occupier and office sectors. Certification to a standard provides a transparent, clear and robust means of communicating credentials to existing and prospective tenants.
- Asset benchmarking and improvement – a. Certification will enable benchmarking of individual buildings against others, and identify areas for improvement that, if acted upon, will result in an improved building and healthier, happier tenants.
b. Good H&W credentials may support enhancement of building valuation – 'wellness' gets a direct reference in the Royal Institute of Chartered Surveyors' most recent guidance on property valuation.
- Investor interest and reporting –
a. Disclosing the extent to which the buildings within a portfolio are certified to a sustainability and/or H&W standard is a requirement of many investor reporting initiatives.
There are three certification schemes that I see as the preeminent H&W standards in the current market. I have created a simple rating mechanism to provide an overview of relative strengths and weaknesses. My system considers five parameters for each scheme – Value for Money, Speed (of assessment), Ease, Kudos (recognition) and Overall Strength. I hasten to add that these are my own views – you may well disagree.
Fitwel
Fitwel originated in the US. It can be applied to offices and multi-family residential buildings and it is a holistic standard, incorporating a broad array of health and wellness-related criteria – including healthy food, proximity to local amenities, accessibility of stairwells, indoor air quality monitoring procedures and more. Its scoring is out of three stars, three being the highest.
Fit for business: Improving health and wellbeing in commercial real estate
Paul Sutcliffe considers how building owners and operators can improve the wellbeing of building users, and gives an overview of three major third-party building certification schemes
Verdict – A relatively quick and cost-efficient third-party verified stamp of approval for new or existing buildings.
WELL Building Standard
Like Fitwel, The WELL Building Standard (or 'WELL') originated in the US. It can theoretically be applied to 'any' building type and, again, is a holistic standard, incorporating an even broader array of health and wellness related criteria – crudely everything in Fitwel, plus many other things. Additional examples include: a detailed lighting plan, demonstrating how lighting is tailored to support the specific activities of building users; a thermal comfort strategy; and sound mapping and noise management infrastructure.
WELL has mandatory criteria or 'prerequisites' and therefore is less flexible to apply. Scoring is based on a 'silver', 'gold' and 'platinum' scale.
Verdict – Likely to be more expensive than Fitwel to apply, but also more comprehensive and therefore warranting higher recognition.
RESET Air
This standard originated in China, though it now has US and EU representation. It can be applied to many building types, but unlike Fitwel and WELL it is entirely focused on indoor air quality. RESET Air is a performance-based standard, relying on data gathered over three months from calibrated real-time monitoring. Projects must meet defined indoor air quality performance levels for a range of indicators such as particulates, carbon dioxide and volatile organic compounds (VOCs). Scoring is either pass or fail.
Verdict – Robust, albeit with a specific air quality focus, for now.
H&W in commercial real estate is an issue of numerous dichotomies: new and old, risks and opportunities, simple and complex, cheap and expensive. Don't let perfection be the enemy of the good: hesitate no longer, make a plan, and let it evolve and improve over time.
Paul Sutcliffe is a founder director at real estate sustainability consultancy EVORA Global.
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