As green issues become more and more topical for retailers, 6 April 2008 sees the introduction of two new pieces of legislation with direct impact upon the sector; the Energy Performance of Buildings Regulations 2007, and the Site Waste Management Plans Regulations 2008. Both pieces of legislation touch on areas at the heart of sustainability and, with their potential impact on costs and the opportunity to bolster green credentials, all retailers should take note.
Energy Performance of Buildings
New requirements for ascertaining and displaying the energy requirements of commercial buildings (including retail units) in England and Wales will start to take effect from 6 April 2008.
When buildings or units are sold, constructed or rented out "Energy Performance Certificates ("EPCs), together with recommendations for improvement of the energy performance of the building or unit, must be produced.
EPCs will show the rating of a building on a scale of A to G (A being good and G poor). An EPC, which must be produced by an accredited assessor, will be valid for 10 years, or (if earlier) the date upon which a more recent one is obtained. They will be lodged in a national register and will be accessible online.
From 6 April 2008, EPCs will be needed on the sale and letting of property with a floor area of over 10,000 sq m, and the construction of all property regardless of size. From 1 July 2008, this will apply on the sale and letting of property with a floor area exceeding 2,500 sq m, and all remaining properties from 1 October 2008.
In addition, air-conditioning systems will have to be inspected at regular intervals not exceeding five years. The first inspection must have occurred by 4 January 2009 for any system with an output of more than 250kw; for systems of more than 12kw, the date is 4 January 2011.
Time is running out before these measures are implemented, so retailers should consider now the extent of their obligations. Individual units within Shopping Centres raise questions as to when exactly an EPC is needed, whether the landlord or the tenant is obliged to obtain it, and whether a landlord is entitled to recoup the cost from the tenant under the service charge. Common parts (or central space in the case of Shopping Centres) require special consideration, and one of the challenges with this legislation is interpreting the available guidance in a practical manner.
Site Waste Management Plans
Construction waste also comes under the spotlight next month as, with effect from 6 April 2008, a compulsory site waste management plan ("SWMP") will be required for any construction or fit-out project exceeding £300,000 in value.
The idea is for businesses, through better waste minimisation and management, to reduce the volume of construction waste sent to landfill and to increase the amount of recycled materials used. Bearing in mind the rising cost of waste disposal, this makes commercial sense, as well as forming an essential part of a sustainable business model for the future.
A SWMP must be prepared before construction work begins, then maintained through the lifetime of the project. The basic rule (although there are more onerous requirements for projects exceeding £500,000 in value) is that it must record steps taken during the design and specification stage to reduce waste arising, include estimates of the types and volumes of waste to be produced in the course of the project, confirm the actual types and volumes produced and record how it has been dealt with. This should be a key tool to enable businesses to minimise and manage construction waste more effectively, and the challenge will be to "design out" waste at the earliest possible stage in the project.
SWMPs will be enforced by local authorities and the Environment Agency which will have powers to impose penalties. For example, anyone who fails to prepare, maintain and update, make available and keep a SWMP and/or who gives false or misleading statements or obstructs a regulator will be guilty of an offence and liable to a fine or prosecution up to a maximum of £50,000 (unlimited on indictment).
We are working with a number of clients to review their construction contracts to ensure understanding and accountability, at all stages from design to project completion.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
