5 March 2013 – According to Dan Labbad, appointed global chief operating officer for Lend Lease in July last year, generational change could re-write the entire sustainability agenda for the property industry.
With young people entering the fray he says, “The entire structure of the industry and government will be completely different.”
Labbad gives it 10 years.
We think it’s already underway. And Labbad himself could be the vanguard.
Take a look at his profile.
As group COO he sits atop one of the world’s most powerful and influential property brands.
He became deeply immersed in sustainability in his 20s. He was the company’s first sustainability head in Australia and created its first sustainability report. In the UK, as chief executive of Lend Lease Europe, he cofounded the Green Building Council and forged strong connections between industry and government to create a Green Construction Board.
And he’s barely nudged 40.
In an interview ahead of his appearance on the “CEO’s Circle” at Green Cities 2013 on Wednesday this week, Labbad reveals some compelling views on sustainability.
They reinforce the notion that here is an industry leader, with passion, logic and cool business sense, who just may be capable of re-igniting the flame for sustainability at the leadership end of property, where it began.
First, he’s optimistic.
An advantage Labbad has is that, newly returned to Australia, he has been spared the day-to-day Aussie Punch and Judy show of climate denial and anti-green rollback that’s characterised the less noble politicking in this country.
“I was very lucky because I stumbled across sustainability when I was in my 20s and got to learn about it and get involved,” he says. “It happened organically.
“In the UK a lot of CEOs talk about the green agenda in an open and direct way because they see it as important for their business.
“What’s really important is that we are immersing young people in this agenda. I think they want to be involved and it’s important to provide them avenues to do so.
“That’s why the GBCA is such an important networking opportunity for young people to learn how they can be greener in whatever it is they do, so that in 10 years the entire structure of the industry and government will be completely different.”
While the politicians are busy talking nonsense and cutting programs and green policies, leader companies keep pushing the agenda because … well because they like being ahead of the game.
Labbad’s fellow panellist on the CEO’s Circle, Grocon’s Daniel Grollo, agrees.
Grollo, another member of the generational change that looks to be already underway, says sustainability is a long-term global agenda and the longer sustainability is delayed or suppressed, the harder we will have to work to catch up.
Besides, the Australian industry has led the world. Its poster children include 30 The Bond and CH2 in Melbourne, and it won’t stay quiet for long.
And besides, Labbad says, “sustainability is a proxy for innovation”.
Barangaroo to Elephant & Castle
For instance, from the huge Barangaroo project on the north-western fringe of the Sydney CBD, Lend Lease will export its district energy system – with details still under wraps – to its Elephant & Castle project in central London for 3000 apartments.
And at the London Olympics site, the company built its residential apartments in 2011 to 2013/14 standards, “because that’s when they would go to market,” Labbad says.
However innovative, though, sustainability doesn’t mean consumers will pay more for it.
“Maybe one day,” Labbad says.
The challenge, he says, is to integrate sustainability, the innovation, and offer it at the same price.
You can’t just put a 10 per cent surcharge on a product because it is sustainable, he says.
Does it annoy him that developers never question that it costs “extra” for high-speed lifts, or a renovated foyer, but always ask for payback periods on sustainability improvements?
Maybe, he hints. But what upsets him more is the view from cynics that something will fail because it has to be at a cost.
Technology and skills can quickly absorb those costs, he says. Green Star tools, for instance, quickly drove improvement so that, “like on like”, the cost of buildings is no more than it was a decade ago.
Still, the construction industry could go way further on innovation.
Projects are still produced on a “bespoke, site-by-site basis”, he says.
“There is more than ample opportunity for standardisation, Why don’t we standardise everything we can’t see?
“So it’s coming back to where sustainability is proxy for innovation,” he says.
Politics and the business of influence
In London, Labbad racked up some serious experience in how to start movements and influence governments.
He helped found the UKGBC along with Peter Rogers, architect Richard Rogers’ brother, and he helped found a coalition of three government ministers and departments and industry CEOS in the Green Construction Board.
And despite the UK suffering far worse under the GFC than Australia, and some rollback on programs, the green agenda is still strong over there. How so?
First was the commitment from the UK Government to push sustainability as a growth agenda, Labbad says.
“Sustainability is seen as a driver of the British economy. And it needs all the growth it can get.”
Even during the downturn, the UK property and construction market continued to commit to wanting to be progressive, and doing everything they could to be green, he says.
“It was not just from the big end of town, it was a real cross section of industry. Small architectural firms, engineering consultancies, right through to the REITs.”
This commitment, he says, became “effectively a sustainability roadmap – government and business coming together to build a roadmap.”
The conversation between government and business was important because the agenda continues to evolve. “You have to have a conversation about the real things that business can do.”
According to Labbad, the biggest risk to business is political uncertainty. It hampers investment in research and development, not knowing how the political and regulatory landscape will change year to year.
Even if the regulations are tough, business can acclimatise, especially if the rules deliver an even playing field.
In the UK for instance, the new Code for Sustainable Homes (for new homes) was tough, but the industry could see the timeline and they adjusted their plans to fit.
Despite the great start, there have been many challenges. The promises from the Coalition Government in the UK to be “the greenest government ever” haven’t quite panned out.
This is where UKGBC played a key role by creating a green score card on the government performance, which is published in national media. The opposition has also taken the current government to task on not meeting green objectives, ensuring they become a platform for the next election, Labbad says.
Green building councils and the exchange of information
Labbad says green building councils around the world are important for “progressing the green agenda” and for keeping the conversation open for all.
“It’s an evolving conversation,” he says. “You can’t buy a green magazine every month and say you’re up to speed with what’s happening.
“You have to be part of the movement, you have to be part of the conversation because no-one has a monopoly on being green.
“By doing that, you give away what you know, but you take what others know and you get the opportunity to take that into your organisation and make something off it.”
A key issue Labbad wants to see back in the conversation is the humanitarian challenge.
“What drives me with this agenda is that it is a humanitarian challenge before it’s a market opportunity … I think we’ve lost sight of this priority in some quarters.”
There is a bigger cities question at play as well.
Behind the race to improve the efficiency of building stock new and old there is also the question of where we want cities to be in 30 years.
“We need to start to frame the question form the other end and ask ourselves, are we making the right decision today in order to get to where we want to get to?” Labbad says.
This involves understanding that there is a correlation between green and economic value, and how places attract talent.
“Smart people and diverse people want to live in cities that are effectively sustainable on a relative basis.
“This is about economic survival, but with that economic survival there is a fundamental green piece: unless you’re green and resilient, you won’t be viable.”
London, he says, is “constantly asking itself what does it want to be, to remain to be globally competitive”.
But then, “they’ve been to the edge of the cliff”.
And yes, despite this, maybe because of it, green consciousness remains “very much” part of that thinking.
The brand, the brand
Companies need to think ahead too.
“Lend Lease, as place maker, forces our organisation globally to think how our brand will be received, not now, but in 10, 15 years time,” Labbad says.
“Ultimately, our brand legacy is where our value will come from.”
So how does this behemoth of a company deal with internal tensions and stay focused on long-term sustainability in the face of the push-back pressures coming from the GFC and politics?
Labbad is adamant that the board and senior management at Lend Lease “absolutely believe” in it.
And it’s critical that this is true he says: “I wouldn’t work here otherwise, I would not waste my time. And a lot of the senior people in the organisation feel the same way.”
The need to demonstrate sustainable results and technological advances is mandatory, he says, and embedded.
But it’s not always smooth sailing.
“We have our champions, and we have our cynics. But effectively we say that’s not negotiable – this is what you are expected to deliver.”
Especially if Dan Labbad has anything to do with it.