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By Allen Blewitt, Chief Executive, ACCA

The built environment, which includes the construction and property industries, is a vibrant part of the global economy and one which the accountancy profession can support to become more sustainable, accountable and transparent.

Buildings are one of the world’s main carbon emission culprits - along with transport and energy . The built environment now accounts for 44% of the UK's carbon emissions. Domestic housing is the worst offender, emitting 26.5% of UK carbon, compared with 13.3% from commercial buildings.

And the majority - 75% - of existing buildings fail to comply with the most basic sustainability standards because they were built before a buildings regulation called ‘Part L Building Regulations’ was introduced.

Government needs to support this sector through green financial and tax incentives. But the most urgent aspect of dealing with carbon emissions – and not just within the built environment– is for cohesive and consistent policy making. The Government must take a War Cabinet approach to tackling climate change. Indeed, earlier this year, Prince Charles told 1000 business leaders that they need to think of the Second World War when confronting this issue.

We know the enemy – carbon emissions – and we know what must be done – lower them. We even have a target because Government has already stated that carbon emissions will be reduced by 20% by 2010.

ACCA wants sustainability targets to be measurable and achievable. The Government needs to work with all stakeholders to set ambitious and realistic targets, but most importantly targets need to be quantifiable so they can be managed.

At a recent conference hosted by Quintain, the property developers, called Building for A Low Carbon World, 90% of the attendees from business, finance and politics pledged that their own organisations would measure and reduce their own carbon footprint over the next 12 months.

To publicise the conference a few days before the event, Quintain’s CEO Adrian Wyatt was profiled in The Guardian newspaper. They said Wyatt “has come to believe that the way we build and manage our urban communities is the key to saving the planet.”  But building and managing the urban environment takes money – and lots of it.

The former US President Bill Clinton’s global Climate Initiative, is offering some $5 billion to renovate municipal buildings in cities worldwide. ABN Amro, Citi, Deutsche Bank, JP Morgan Chase and UBS have all committed to offer $1 billion in funding to help with the programme. Ken Livingstone, the Mayor of London, signed up to the Clinton Climate Initiative, saying “the alliance will make it financially feasible for cities to radically cut emissions from buildings.”

For feasible change, strong financial and tax incentives must be provided for the built environment to both build and upgrade existing buildings to be ‘greener’.

The cost differences between new builds and re-furbishing buildings is huge, so there should be different rates of incentives depending on whether the building is a new build or a re-furbishment. Also, the introduction of special business rates for those investors whose buildings are compliant with particular levels of the green code would be an encouraging move.

Imaginative work is being done; Gordon Brown recently announced the building of five “Brown Towns” in the UK. Zero carbon building standards will be used and importantly they will be exempt from stamp duty. This removal or reduction of stamp duty for greener homes is a strong statement of Government commitment – but more can be done.

And following the Stern Report’s publication, the government established a new commission to propose ways for Britain to lead the way in a low carbon economy. But the most direct way to encourage businesses to take this issue seriously is not necessarily though commissions, but through the introduction of the strong fiscal incentives mentioned earlier.

But the big question ACCA is being asked is “when will sustainability in the built environment be achieved?” The simple answer - as soon as sustainability reporting is seen as a key business issue, and not just greenwash.

The UK Companies Act of November 2006 should encourage integrated reporting, especially because the resulting Business Review must contain forward-looking statements, along with a description of what drives the companies’ performance. For the first time, disclosures must be made on the organisations’ carbon footprint and emissions.

Reporting in this transparent way - without spin or green gimmicks - is excellent for potential investors to discover whether a company is responsible. It can encourage investors, especially for the building industry, to take an interest and potentially invest.

The accountancy profession can see through gimmickry. As the years progress, accountants will play a vital role in fighting climate change, and specifcally for integrating sustainability into the investment process.

For more on green accounting and other news and analysis go visit the Accountancy Age website (see link under 'see also')

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