Partnership benefits

A prime mover in bringing energy efficiency to poorer households, eaga sees its unusual partnership structure as an indispensable aid to achieving its goal, says John Clough, eaga's CEO

Eaga's entry to the stock market in June this year and its subsequent FTSE-250 status as a leading ‘green' support-services business has enhanced its ability to make a difference. It operates in the space where environmental, energy and social justice concerns meet and homes across the UK are made more energy-efficient and sustainable. In an organisation that takes much of its values and traditions from its origins as an employee-owned partnership, we regard CSR as not just part of the business or on the periphery of our operations but an intrinsic part of our culture.

Since its inception in 1990, eaga has improved living conditions and lowered fuel bills in five million homes by installing energy-efficiency measures.

It brings improvements to more than 1,000 UK homes every working day and fits or improves a heating system every minute of each working day. These improvements have been at the heart of the Government's drive to eradicate fuel poverty, where a household cannot afford to maintain an adequate standard of warmth in the home. Eaga's path to the stock market was different from that of most of its rivals. Established in Newcastle in 1990 with just three employees, it was a non-profit-distributing organisation for 10 years, leading government-funded efforts to improve living conditions for vulnerable families. It became a staff-owned partnership in 2000, and since 2004 has grown, organically and through acquisition, and strengthened its focus on improving the environment, increasing energy efficiency and delivering social and environmental justice.

The Government is striving to implement a policy framework to deliver its climate-change goals. Realising the synergies available, as social and environmental policies converge, is eaga's expertise. Providing affordable warmth for cold homes while safeguarding the future of the planet - that's what engages its partners.

As a founder member of the Employee Ownership Association, we know that staff share-ownership is fundamental to effective employee relations. It fosters the high standards of accountability and CSR that are integral to eaga's position. As shareholders, its employee co-owners impose exacting levels of corporate transparency and integrity in everything eaga does.

Partnership brings tangible business benefits. Eaga's experience and research show that firms with this structure often demonstrate higher productivity, greater innovation and enhanced talent recruitment and retention, as well as enjoying greater customer loyalty. But the approach needs to be underpinned by a strong culture and values. Eaga's employee-partners know that it places a huge emphasis on the selection and induction of people who share its ethos and values.

All new employees attend an induction programme to ensure that eaga's values are enshrined in their working practices. Being a plc has brought opportunities for growth from which all eaga partners will benefit. Of course, life as a plc also brings challenges - for example, new rules and regulations and increased scrutiny from the media. But partnership is, in eaga's view, the best way to meet these challenges. It will allow us to maintain our standards, retain engaged, passionate people and to raise our game. It's a tried and tested model that partners understand, trust and benefit from. Since flotation, they continued to hold more than 51% of company share capital through a combination of personal ownership and the eaga partnership trust.

The company's board resolved in June that its operations throughout 2007-2008 would be carbon-neutral, and it would move progressively to a carbon-negative status. As well as reducing our own impact on the environment, we are seeking to help stakeholders achieve carbon savings. Eaga has the business model, the ownership structure, the culture and the people to deliver a strategy that is about doing well by doing good

Never-ending cycle

Source: Michael Creamer, Cushman & Wakefield
Reviewed: 12-Dec-07

A CSR approach to managing the real estate of the workplace can make big improvements to a company's performance, says Michael Creamer, head of client solutions, EMEA, at Cushman & Wakefield

Buildings are the biggest polluter out there. Energy use in real estate accounts for more than 40% of Europe's CO2 emissions. But now that many companies have a CSR or sustainability policy defining their response to climate change and setting out what they are doing to minimise their negative impacts, the corporate real estate (CRE) team is given an irrevocable licence to go out there and do something. The real-estate sector thus has a chance to lead the field. Yet many CRE teams are nowhere near ready.

The CSR approach does not have to be more expensive but needs to be thought through. More efficient use of space, a careful choice of office equipment and new policies can have a real impact on the carbon footprint of the workplace. With an increased awareness of the issues and the prospect of shareholder backlash, it will soon become unacceptable to many corporates to occupy buildings that, from a CSR standpoint, fail to offer for the life of their lease certain features. Our guidelines - the three Es of good environmental behaviour - should help you to maintain a sustainability policy at all points in the life of a lease.

1 Entering into a new lease
The first stage of an acquisition, the market survey, should incorporate questions about the environmental impact of the buildings. The CRE team should check that the workplace in question has a BREEAM or LEED certificate. Both certifications score the building's impact on the environment.

The second task is to request information from landlords. Here, more detailed questions can be asked about their buildings and their approach to sustainability. Such questions would cover: water use, waste recycling, energy use, building systems and environmental policies, material usage and procurement routes.

Once the lease is signed on an environmentally friendly building (with clauses to ensure this continues for the length of the occupancy), demolition of the existing fit-out and new space design and construction must be give careful consideration. When arranging demolition before occupancy, choose a contractor who will recycle materials and office equipment. The new office fit-out follows the same approach: use recycled materials and fixtures and fittings to ensure that the building systems are run to maximum effect. As part of the design and fit-out, allow space for recycling bins.

2 Existing space
The company now has an environmentally friendly and energy-efficient building. An internal recycling awareness campaign will ensure that everyone participates. The facilities management team collect data on energy use, recycling and so on, and this is communicated to staff to encourage continuing good practice. These figures demonstrate, too, a programme of improvements that will have direct impact on shareholder value. Senior management will see an improvement not only in carbon-footprint reduction but also in the cost line in every P&L across the company.

It is the firm's and CRE team's responsibility - as much as the landlord's - to spend time developing ways to improve building systems so that space can be run in an efficient way. This new way of working will be the best means of unlocking the potential that both parties seek.

3 Exiting space
A lease may come to an end but the cycle continues. Any removal of fixtures and fittings by a tenant needs to be done with recycling in mind, and choosing contractors who will do this is a must. The landlord needs to make good and take the opportunity to ensure that the space is brought back to a condition that allows the next tenant to meet its CSR goals.

This is not the way things have traditionally been done and is not the norm in 2007. But applying CSR precepts to the world of property is helping to drive down that 40% contribution to CO2 emissions. Seriously reducing real estate's carbon footprint could also change business by breaking landlord/tenant barriers