The purpose of this Guidance Note is to provide asset managers, property managers and facilities managers with guidance for incorporating sustainability into the procurement, implementation and on-going management of mechanical and electrical (M&E) services.
Incorporating sustainability within M&E contracts involves the identification of environmental and social issues relating to M&E activities and ensuring that they are adequately considered during the procurement of human resources and materials at all stages of the M&E life cycle.
Environmental issues could involve, for example, the selection and disposal of chemicals which may be hazardous to the environment or training to ensure the potential impact of services on energy performance is understood.
Social issues could involve, for example, ensuring that M&E contractors have taken relevant precautions beyond merely checking Right to Work documents to ensure modern slavery risk is effectively managed.
The procurement of M&E services without adequate due diligence, or with poor management of the M&E contractor or service provider, has the potential to:
As M&E services are subject to a range of regulations, alongside potentially damaging the reputational of both the property managers and the asset manager, non-compliance also introduces operational and financial risk through exposure to penalties and fines.
Relevant environmental legislation relating to the incorporation of sustainability within M&E contracts includes:
Relevant social legislation to consider in in relation to the incorporation of sustainability within M&E contracts includes:
The table below summarises the key activities associated with embedding sustainability within M&E contracts, and highlights where asset managers, property managers and facilities managers are likely to have a responsibility or specific interest.
1. Procurement practice
2. Scope of services
4. M&E and environmental performance
5. Ongoing monitoring
6. Supply chain management
Property managers play a key role in embedding sustainability requirements within mechanical and electrical (M&E) services, and, alongside facilities managers, checking that contractors are operating as intended. Asset managers have an ongoing interest in ensuring that M&E services comply with regulations alongside any additional requirements they may specify.
The way in which sustainability is incorporated within M&E contracts must be stringent, fair and comprehensive to enable the intended interpreted by M&E contractors and service providers. However, there must also be flexibility for a property manager to take into account any additional requirements guidance or best practice specified by asset managers.
Embedding sustainability requirements within M&E services involves the consideration of the following elements:
The procurement stage provides the primary opportunity to influence the sustainability impacts of M&E contracts.
When agreeing the lease, sustainability issues should have been documented between the asset manager and its occupiers. Relevant sustainability requirements can then cascade within M&E contracts to define and confirm acceptance of responsibilities.
Due diligence and pre-screening questionnaires should include consideration of the requirements of the Modern Slavery Act. As this Act acknowledges M&E as a high-risk service in relation to modern slavery, it is important that full checks have been undertaken in contractor selection processes prior to instruction.
Pre-screening should include a check whether M&E sub-contractors have been convicted or had a notice served upon them for infringement of environmental legislation, with further investigation into the circumstances, with subsequent action, where necessary.
Ideally, M&E sub-contractors should be required to operate a certified Environmental Management System, or at least have a documented process for identifying and managing significant environmental and/or social sustainability aspects and impacts.
It is important that property managers consider the development of specific clauses relating to sustainability for inclusion within M&E contracts. The information set out within this guidance note may be helpful in guiding the development of these clauses.
While there are currently no set, standard sustainability clauses relating to M&E contracts, property managers should consult a range of sources to develop relevant clauses that will drive continual improvement, and that are likely to be consistent with requirements set for M&E contractors across the real estate sector. These sectors may include:
It is important that M&E contractors are able to demonstrate competency in a broad range of services that have the potential to influence the sustainability performance of a property. Key focus areas may include, for example:
An M&E contractor has the potential to influence a property’s sustainability performance, in particular in relation to energy and water consumption.
It is important that early and ongoing engagement with M&E contractors is undertaken to raise awareness sustainability objectives and targets, and to confirm that confirmation that employees receive appropriate training.
Key aspects of awareness raising and training for M&E teams relate to:
If there is any equipment containing F-gas onsite, it is best practice to ensure competency records for managing F-gas equipment (such as ACRIB cards) are held onsite for all M&E contractors who visit to conduct F-gas maintenance.
Training and sustainability performance targets should be reviewed periodically to support maintenance of high standards. Property and facilities managers should consider providing training material in languages other than English, to align with the demographics of the M&E contractors’ personnel.
The activities of M&E contractors can have a significant impact on a building’s sustainability performance.
In many properties, M&E staff directly control the running times of plant, programme settings and the strategy around electricity and gas and, consequently, associated greenhouse gas emissions.
A Property Manager should liaise with both the asset manager and occupiers to agree how M&E schedules can be aligned to energy strategies, and, particularly, to Net Zero aspirations.
M&E contractors should be fully engaged in carbon reduction programmes, including the design of planned, preventative maintenance programmes and the identification of energy saving opportunities.
Whilst it is important that heating, ventilation and cooling (HVAC) systems in a building operate at hours that match the times when they are required, these need constant review as occupier requirements change and seasonal temperatures vary.
In response to this, it is important that M&E contracts include the need for contractors to demonstrate active engagement with an adaptable approach to HVAC services.
For example, it may not be necessary to heat or ventilate a whole building if it is not fully occupied. In many properties, lighting and heating often remain on much longer than necessary and M&E teams should be empowered, and receive training and access to technology and data, to vary the provision of M&E services accordingly.
In order to ensure that high sustainability performance standards are achieved and maintained, it is important to review both the services provided and products used on a regular basis. This review should be against a clear set of output-based KPIs and undertaken as part of annual contract reviews.
For M&E, this could include, for example, records of F-gas usage or trends in energy consumption compared across equivalent degree days.
Where standards are found to be lacking, property managers should work collaboratively with the service provider to establish the reason for under-performance. This may relate to, for example, insufficient resourcing, training or communication. Following the review, an improvement plan should be mutually agreed.
Facilities Management should ensure there is a formal process in place to review changes in legislation and to ensure any applicable changes in legislations are included in contract renewals.
As M&E falls into a high risk service category in respect of employment processes, checks should be undertaken routinely on the service provider.
This should include checking that directly employed staff and, as far as possible, any other staff in the supply chain are offered a safe place to work where there is no bullying, harassment, discrimination or unreasonable working conditions of any kind (e.g. unpaid work excessive working hours). The Property Manager has responsibility for ensuring that there are demonstrable policies and processes in place to ensure this.
The following Guidance Notes contain related information: