Aptly following the eagerly awaited COP26 Climate Event, the 2021 NextGeneration Launch Event took place on the 16th November to announce this year’s benchmark results. Andrew Baker, the new head of JLL’s UK sustainability consulting team, hosted the event virtually, guiding discussions on sustainable homebuilding and the associated rise of green finance opportunities. We welcomed a keynote speech from Jayne Black, the Homes England Strategic Procurement Programme Lead, who provided an insight into the public body’s perspective on pushing sustainability through the industry. The event concluded with a riveting panel discussion between representatives from some of the homebuilders leading the way to drive green change in the residential sector. With this theme of green finance, conversations ensued around the ever-growing importance of sustainability reporting and the experiences to date of the mounting pressure from financial institutions and stakeholders to demonstrate their sustainability performance. Alongside Jayne, the participants were:
- Richard Cook, Group Director of Development, Clarion Housing Group
- Tony Parker, Finance Director, Hill Residential
- Charlie Weatherill, Capital Markets Director, Telford Homes
- David Willock, MD & Head of ESG Finance, Lloyds Bank
2021 NextGeneration Sustainability Benchmark Results
These results represent the final of the three-year criteria cycle, before they are updated to ensure they remain stretching and pertinent. Telford Homes are the top ranked homebuilder of the NextGeneration Benchmark for the second year in a row, demonstrating their continued commitment to sustainability. Barratt Developments also exhibited a strong performance, coming a close second and winning the Crystal Award for their Phase 1 score, while Taylor Wimpey moved up to third from fourth. It is also noteworthy to mention that this year, Hill ascended from ninth to sixth place, increasing their score by 14 points. Ranking this highly as a non-listed homebuilder, with fewer mandatory reporting requirements, is particularly impressive. The benchmark was also excited to welcome Latimer as its first member from a Housing Association group, achieving a commendable ninth place in their first year.
Andrew Day, Sustainability Director at Telford Homes states “Our purpose is to design and develop high-quality, sustainable Build to Rent developments that exceed the expectations of our residents and our investment partners. Accordingly, we are pleased that our Building a Living Legacy strategy and net zero roadmap to 2030, continues to be recognised by the NextGeneration sustainability benchmark.”
Companies included in the Benchmark contribute to a total turnover of £27bn, account for 56% of homes built in the past year and directly employ 44,638 people. We continue to see a broad range of performance in the Benchmark, demonstrating how there is still a significant disparity of impact and reporting within the industry. Non-listed companies, where reporting requirements are much less stringent, continue to populate the bottom half. Meanwhile, the NextGeneration Members continue to lead the way with an average score of almost double the industry average (73 compared to 40), reflecting both the benefits of expert advice and peer learning, and the greater disclosure of sustainability information by members to the benchmark.
The Launch Event also marked the release of the 2021 NextGeneration report, now available for download from the front page of the NextGeneration website. Like with the Event, this year’s focus is on the importance of sustainability reporting and how this ties in with access to finance. The first section looks at the growing market for Green and Sustainable finance, providing the opportunity for perks such as more favourable loan rates. Next, the risk of poor sustainability reporting and performance for accessing finance of any kind is outlined, along with the projected impacts on homes and operations. Finally, there is a section outlining what steps can be taken by a homebuilder to move in the right direction, including a guide to the range of reporting options available.