Sustainability Initiatives

At the time of the interviews, Company A had geared up for the impending introduction of mandatory 5 star energy ratings and had employed in-house staff to conduct energy ratings of homes. Apart from this, their exposure to sustainable building at the time of the interviews was largely confined to the construction of the Cairnlea Ecohome, outlined in Chapter 2.

The main differences perceived by the interviewees between the Cairnlea Ecohome and Company A’s normal product offerings were the greywater and solar systems (typically interviewees referred to “solar” and did not distinguish between photovoltaic cells and solar hot water, although both were included in the Cairnlea Ecohome). One interviewee also noted the different [low-VOC] kitchen cupboards, benchtops and [water efficient]

tapware that were installed.

While the Cairnlea Ecohome experience was claimed to have raised the level of

awareness of sustainability amongst both technical and sales staff, it did not appear that it had yet translated into standard practice. Indeed, some frustration and disappointment about the outcomes of this project (in terms of a perceived lack of customer interest) was expressed by the various interviewees from this company.

It was suggested that the delays in constructing the Cairnlea Ecohome were partly

attributable to its construction during the peak of the housing boom, which tended to divert human resources to more profitable activities, and arguably also to some degree due to issues of coordination amongst the project partners. Coordination problems were exacerbated by some key project team members ceasing their involvement with the project throughout its duration for various reasons, including due to the death of a senior manager who was a champion for the project. In part it was probably also due to the builder’s frustrations with unfamiliar products and processes.

At the time of the interviews (2005) there had been little subsequent work building upon the experiences of the Cairnlea Ecohome. However, the company was in discussions with Melbourne Water about a potential effluent reuse project being considered for several new estates in Werribee, an outer suburb in Melbourne’s south-west, where this company was to construct homes in the display villages. This project was to involve use of treated sewage for toilet flushing and garden irrigation and dual-metering of houses, with the extra cost of metering offset by being charged at the lowest rate for water. (Although one of the interviewees described it as greywater, another described it as being partially treated effluent that had been first used in farming, rather than greywater from housing. In fact, it appears that neither was correct and it was, rather, treated sewage from the

Western Treatment Plant in Werribee, with an added environmental benefit being the production of energy from biogas from the treatment lagoons (Murphy, 2005)).

Company A had no staff with specific responsibilities for sustainability or environment as at 2005, and nobody appeared to have had any formal training in these areas. The Cairnlea Ecohome was originally coordinated largely by the research and development team (which encompassed a design function as well), with most of the sustainability expertise provided externally by project partners. Subsequently, the marketing team had played a significant role in promoting the home and developing marketing material, with information passed on to the sales team who then produced promotional material for customers.

No real vision was expressed during the interviews as to how Company A would continue to embed sustainability into their homes in the future, and it appeared that it was an issue for which the company was giving little attention. Indeed, there seemed to be the sense that a hurdle had been jumped by completing the Cairnlea Ecohome and as one

employee noted, there were no particular plans to build another “environmentally-friendly”

home in the near future.

There was generally a sentiment that certain sustainability features would be demanded increasingly in future, or the bar would otherwise be raised by customers, developers or regulators, particularly relating to energy and water efficiency. It was also felt that improvements to technology would mean it would be more widely adopted in future, in areas such as solar hot water systems, photovoltaic cells and greywater or other recycled water treatment systems. Greater awareness in customers of indoor air quality and links to health issues was also expected by one interviewee, while another noted that

sustainable materials was an area they would need to address further in the future.

However, these expectations had not translated into any identified action at that point in time.

However, around 2007, Company A did once again develop a sustainability-related offering, promoting packages of additional home sustainability features on its website through a program called ‘Shades of Green’. (As of 2013, this was still listed on their website but with no details provided). During 2012, their website stated:

“At [Company A], we’ve just introduced an important option for your

environmentally friendly home. It’s called Shades of Green and it provides you with a range of choices that can reduce your energy consumption, and, at the same time, increase the sustainability of our precious resources.”

A customer could purchase additional sustainability features to add to their home according to three options:

 Light green – includes low VOC paints, time delay switches and light dimmers for lights, window and door seals;

 Medium green – additionally includes double-glazed windows, energy efficient downlights, ceiling fans, higher R-value insulation batts to walls and ceilings and window frame materials that reduce heat conductance; and

 Dark green – includes light and medium green options as well as a solar hot water system, grey water system and rainwater harvesting.

Each option provided a brief summary of benefits, such as potential percentage energy savings, although with limited details.

As at early 2013, there otherwise appear to be fairly limited references to sustainability on Company A’s website. A webpage entitled Community Involvement describes a range of philanthropic activities without mention of sustainability, and the Cairnlea Ecohome rates a mention as the winner of HIA Best Energy Efficient Project Home award, buried

amongst a suite of other non-sustainability related award titles, and with no supporting information provided.

In 2012, if one hovered a mouse in the appropriate location, the bottom of the Victorian homepage did provide as one of the answers to the question “Why [Company A]?” the rather vague response:

“[Company A] has been recognised for its innovative designs and commitment to sustainable homes.”

However, this link is no longer there and at the current time sustainability is not alluded to in Company A’s Vision, Mission or Values as shown on their website.

5.2 Company B

5.2.1 Background

Founded in 1989, Company B grew rapidly to become, according to its website, Victoria’s largest home builder by 1994 and Australia’s largest home builder by 1998, but according to the 2009/10 Housing 100, the fifth largest by number of starts. By 2009, it was

estimated to have built some 40,000 homes (Dunlevy, 2009), and started 1,881 houses in the 2009/10 financial year (Housing Industry Association, 2010). One interviewee from this company described how in the company’s “heyday” they had built many more homes each year than this, but had decided to focus upon a more controlled approach to what they built.

Company B’s main market is Victoria, where it is considered to have “…pioneered

affordable ‘big box’ homes now commonly known as McMansions” (Dunlevy, 2009), but it also builds homes in Queensland and South Australia. It has built homes in the past in NSW, having entered this market in the 1990s, where it:

“…ran into trouble when a skilled trades shortage created by Olympics Games construction resulted in well-publicised complaints about the quality of its homes…After its problems in Sydney, the company bounced back in 2000 to pioneer five-star energy rated homes in Victoria” (Dunlevy, 2009).

According to the same article, there had also apparently been interest in expanding into Western Australia, but this has not happened at the present time.

For many years, Company B was a private company, run by the three directors who established it. However, in 2009, a 50 per cent share was purchased by a subsidiary of a publicly listed Japanese company which builds around 10,000 homes each year in Japan (Dunlevy, 2009).

Sustainability, at least with regard to energy, was widely understood by the interviewees to be core to Company B’s business philosophy and way of designing homes.

5.2.2 Sustainability Initiatives

At the time of the interviews, Company B had no staff with dedicated responsibility specific to sustainability or environmental management, apart from a dedicated person in each State who supported the national design team by conducting house energy ratings.

Environmental compliance issues relating to site management appear to have been largely overseen by two dedicated occupational health & safety specialists within the organisation with national responsibilities.

As mentioned above, Company B’s key achievement with regard to sustainable building at the time of the interviews had been to become the first volume builder within Victoria to offer 5 star energy rated homes as standard to all homes, five years before the

regulations mandated it. They had achieved this in part by developing a working relationship with the (then) Sustainable Energy Authority of Victoria and with a former Victorian Planning Minister.

Initially, Company B had modified their existing house designs until they achieved the 5 star rating, but interviewees reported that they had found this typically added significant expense, as they were required to make costly adaptations such as installing more double-glazed windows. They had resolved this through considerable trial and error, redesigning their homes with greater consideration of passive solar design principles. This had involved modifications to block shapes and setbacks and increasing glass to the northern aspect (and reducing it elsewhere). As a result, the cost of achieving energy efficiency standards was much reduced.

Company B staff were the most likely of all interviewees to stress the importance of the home actually being constructed to perform in an energy efficient manner, rather than simply achieving a rating for a design.

With regard to the construction process, Company B claimed that it had largely integrated the implementation of sustainability within their existing quality program. One interviewee noted that this was necessary to avoid things going wrong, such as installing the double-glazed windows in the wrong location if there were other, non-double-double-glazed, windows the same size. The quality system adopted was developed in-house and was reportedly not aligned or certified to a recognised standard such as ISO 9001. It largely entailed several inspections of a home by independent inspectors at four stages, checking against the requirements of the Building Act and internal requirements (which were more onerous than legislative requirements), and checking specific factors such as the quality of drafting, building fabric, finishes and the like, as well as that the energy efficiency requirements had been met. There was reportedly also a final check of the home by Archicentre, an independent building design and inspection organisation which is an offshoot of the Australian Institute of Architects. Some of the interviewees from this

company noted, however, that these quality processes were not widely publicised by their organisation.

Changes to their earlier construction processes to incorporate sustainability had included a greater emphasis on preventing air leakage, through measures such as taping joins in sisalation (reflective foil), which had reportedly required “educating” Company B’s bricklayers. They had also worked with their plasterboard installers on ensuring that insulation batts were installed before the walls were sheeted. While the emphasis was on improving the building envelope, the energy efficiency of appliances, lighting and the like was rarely mentioned. However, one interviewee reported that all display homes featured photovoltaic cells, which were offered as an option, but were rarely purchased due to their high cost.

Training of sales staff, through the provision of information that allowed them to clearly explain the benefits to customers, had reportedly also been part of Company B’s strategy.

While energy efficiency was certainly the focal point of sustainability initiatives, and the point that interviewees from this company talked most easily about, water, waste and materials selection were also mentioned reasonably frequently. Flow control valves to reduce water consumption had apparently been installed as standard in all homes for a number of years. Rainwater tanks were offered with homes and while they were not, at the time of the interviews offered as a standard feature, they had apparently been so during the water restrictions imposed during the earlier major drought in the eastern States of Australia.

Company B was using a waste disposal contractor who they had selected because they had proposed a recycling system, but it wasn’t clear if such a system was yet in operation.

There was no mention of them have started to seriously tackle issues such as minimising unnecessary packaging.

At the time of the interviews, there appeared to be general uncertainty as to what the next sustainability challenge might be now that energy was largely thought to have been addressed by some interviewees (although a couple of interviewees speculated about aiming for higher energy ratings). There was interest expressed by one interviewee as to how energy use related to the subsequent use of the home could be reduced, such as by

‘zoning’ the usage of areas.

Water was not widely raised as an issue requiring additional efforts, although one interviewee noted that it remained an issue. However, some scepticism was expressed about the actual sustainability benefits of continuing to supply rainwater tanks, such as:

“I’d like to see some research on whether we’re actually significantly saving water by supplying homes…with water tanks…Our experience is, most of…they’re empty before you know it. So therefore the idea that you’re going to have a water tank out there for the long hot summer is just ludicrous.”

Taking the wider definition of sustainability to incorporate the social sphere, Company B was also involved in various philanthropic pursuits, with a dedicated separate website which outlines their commitment to philanthropic activities, noting amongst other things that they have raised over $18 million for philanthropic projects, growing at over $1.5 million annually. Specific examples include their donation of 33 homes to provide funds for hospitals. They also heavily promote their involvement in supporting a children’s orphanage in Africa (Housing Industry Association, various years) where they also acquired land to grow food. There are also various staff projects where Company B matches dollar for dollar any funds raised by its staff.

Part of the lack of a broader, clear plan for future sustainability initiatives appeared to have stemmed from not having a clear enough understanding of the issues entailed, a point that was raised by more than one interviewee.

A greater emphasis on building materials seemed to be a potential future area of focus, as it was raised by almost all interviewees from Company B, with one expressing a wish to be able to communicate the relative environmental benefits of various alternatives (such as in terms of natural resource consumption, chemicals released into the environment, longevity and the like). One interviewee also raised the health issues associated with the “chemicals” used in products such as chipboard as a social element of sustainability (the only person in this company to specifically discuss the social dimension with regard to future plans). Related to materials, a better understanding of embodied energy was also raised by one interviewee as an issue requiring future attention, with particular reference made to the embodied energy of energy efficiency features such as double-glazed windows and potential trade-offs.

Reducing wastage was also specifically raised as an area requiring future focus by one interviewee. It was thought that this would occur automatically to some extent, as the trend towards greater use of electronic estimating continued. Another interviewee suggested there was a role to play with more aggressive supply chain management to drive sustainability initiatives.

One person did not specify any particular vision for sustainability, but felt that it would be important to work with the broader industry, including educators, institutions and

government to understand the wider vision and ensure they were involved early.

Not many years later, this company did go on to find itself a new and ambitious

sustainability challenge, joining the Australian Zero Emission House (AusZEH) research consortium and building Australia’s first zero emission house in Laurimar, described earlier in Chapter 2.

As at 2013, sustainability is still a core marketing message on the Company B website, which positively promotes its involvement in the AusZEH research project. ‘Sustainability’

is one of the seven drop-down options to select under the ‘About [Company B]’ tab, with the dedicated webpage stating:

“[Company B] continues to lead the way in pioneering sustainable and

environmental initiatives in new homes. Our focus has always been about building tomorrow's homes, today. [Company B’s] strategic focus is to lead the way and set the benchmark for the industry. [Company B] was the first builder to introduce 5 star energy rated homes five years before the government made it mandatory, and

more recently, the first builder to deliver Australia's first zero emission home designed for the everyday family.

Our environmental commitment is steadfast and continues to evolve every day in our ongoing research and development initiatives, design and construction approach and partnerships with major land developers, government and leading industry bodies.

Into the future, [Company B] will continue to be the leaders in new home design, innovation and sustainability, whilst still providing affordable, quality homes to Australia and the rest of the world. The best in sustainable living practices are available now. All [Company B] homes are 6-star energy rated. Discover simple ways to save money whilst protecting the environment.

The sustainability webpage (as at March 2013) also provides some very limited detail about the 8-star energy rated home built and on display at Clyde North (outer south-eastern Melbourne), but surprisingly, no references to the Laurimar Zero Emission House could be found anywhere else on their website.

Company B also claimed on its website in 2012 to have produced a sustainable living brochure which was available from each of their display centres.

5.3 Company C

5.3.1 Background

Company C is the residential division of a wider Australian publicly-listed property company, with a majority share-holding by a Singapore-based corporation. It was first listed on the Australian and Singapore Stock Exchanges in 1997. It has been involved in property development for over 80 years and at the time of the interviews, had

development assets of $1.7 billion, owning 49 income-producing properties with a total value around $1.3 billion (based on its 2005 Annual Report). The Annual Report also stated that, as of 2005, it employed approximately 640 people and operated in Sydney, Melbourne, south-east Queensland and Perth, with a sales office in Hong Kong.

Apart from the listed nature of the organisation, other factors significantly differentiated Company C from both Company A and Company B at the time of the interviews.

Company C is a more widely diversified property group, having Commercial & Industrial, and Investment Property divisions, as well as Residential. It could be speculated that their exposure to green building associated with the commercial sector, and particularly the fact that at the time of the interviews, their Chief Executive Officer was also the Chair of

Company C is a more widely diversified property group, having Commercial & Industrial, and Investment Property divisions, as well as Residential. It could be speculated that their exposure to green building associated with the commercial sector, and particularly the fact that at the time of the interviews, their Chief Executive Officer was also the Chair of