ENVIRONMENTAL POLICY AND PRACTICE

Common environmental policy for the Group

Since the beginning of 2008 we have been working on a common environmental policy for the whole Group. The policy will help to unite the successful environmental work that has already been ongoing for several years in areas such as energy efficiency, recycling, chemical use, irregular emissions, material use and odor problems - and contribute to an even better integration into Veidekke's core business. The ambition is clearly formulated as "to be a leading player in our industry in reducing greenhouse gas emissions and safeguarding the environment". It does not necessarily mean that we should be best in research, but we shall always have up-to-date knowledge of available technology, be creative in how to use this technology and be the best at creating a value-increasing interaction between all participants in the construction process.

A good example of how this works is KLP Eiendom's new eco-building in Trondheim. When the building process was started, we didn't have a complete overview of which solutions should be used. But the goal of creating one of the most energy efficient buildings was clear, and during the building process all parties came up with creative solutions to achieve this goal. How wires fed through isolation or how best to mount windows to avoid cold bridges are all details in the big picture of a building process; details with significant energy savings potential. Its status on opening day in the autumn of 2009 showed a building in need of just 83 kWh/m² infused energy (for comparison, new regulatory requirements stipulate 165 kWh/m²).

Business opportunities in environmental work

Veidekke has a stated goal to lead the industry in reducing greenhouse gas emissions and safeguarding the environment. This means that we, among other things, will give customers added value through our work; we will contribute actively in environmental work outside the company's four walls, and we should involve and make clear demands on our partners for their environmental work. There is also a clear upside for Veidekke in this work. In working with environmental measures we are often forced to see familiar issues from a new angle, resulting in more efficient and cost-effective solutions. In other words, it creates a win-win situation for both the environment and Group operations.

Business opportunities can also arise in the form of new products. TellHus, our low-energy house, is a good example of exactly this. Through simple solutions, total CO₂ emissions were decreased by around 1.5 tonnes per house per year, compared to apartments in an ordinary setting, without affecting either the building process or material costs to a great extent. TellHus is now pending to be "Svanemerket" (environmentally branded), making it the first project in its category in Scandinavia to be so. In 2009, our Swedish property business took a principled decision to build all multi-familiy dwellings according to the TellHus principle. The first TellHus brand apartments have been sold with construction commencing in spring 2010.

In Denmark, Hoffmanns developed an advanced management system for ventilation and energy consumption in rooms, called Optimina, which has received considerable attention among our customers. The system can quickly result in reduced energy consumption in existing buildings. The measures include automatic light control, night setback of temperature from 23 to 16 degrees and the insulation of door latches. After mounting these in Hoffmann's own barracks, the results were quickly revealed with a reduction in electricity consumption of 26 per cent. An internal test of our office in Glostrup showed that investment of approx. NOK 9000 could be recovered in just one and a half years.

Broad approach to environmental challenges

In our industry, environmental concerns extend far beyond CO₂ emissions. We need to think broadly bout our impact on the environment including topics such as emissions affecting water and soil, use of health and environmentally hazardous substances, noise, dust, indoor air quality for end users and biodiversity. In other words, having an environmental perspective which sees both the small and the picture big is essential for a player like Veidekke. As a business, we are decentralised and local in nature, and are temporarily present at hundreds of construction sites all over Scandinavia. Regardless of location and local challenges, we will adopt the same concern for the environment. This means minimising soil, air and water emissions; use of environmentally friendly materials, products and processes in production; low energy consumption; and waste reduction and recycling resulting in the least possible landfill waste.

Although the primary objective is the same, the instruments vary by geography and business area. There is still much to learn from each other and we are working systematically with the transfer of experience across the organisation. Examples of local solutions with great potential when used elsewhere are the installation of temperature control on building barracks (Denmark), ventilation and temperature control for office buildings (Denmark), ISO-certification of building processes (Sweden), low-energy housing TellHus (Sweden), cooperation with Norway Asthma and Allergy Association to create a better living environment (Property development, Norway) as well as construction of dry crushed stone and gravel in order to save energy during asphalt production (Norway).

Organisation of environmental work in Veidekke

Veidekke's environmental work and environmental policy is rooted in top management, while implementation is a line responsibility. The various environmental measures are integrated into business areas and some strategy documents. To coordinate efforts across the organisation Veidekke has in addition, a broad-based environmental group. The group prepares training programmes, reporting systems and prepares sustainability and climate reports in support of the organisation. The company's communications department is actively working to disseminate information about good projects and results to all employees through internal magazines and websites. Reporting on various environmental parameters is done according to the guidelines of the Global Reporting Initiative (www.globalreporting.org) and greenhouse gas emissions are calculated based on the Greenhouse Gas Protocol (www.ghgprotocol.org).

Customer Influence

Efforts to influence customers to build new low-energy buildings, is one of the most important environmental works we can do as a contractor. Provided, however, there is close involvement of the builder in the work processes at the construction site, so that it is continuously possible to assess costs and benefits of various options. A good example of such value-added interaction, is the choice of super insulating glass in KLP Eiendom's eco-building in Trondheim. Builder investment amounted to around NOK 600 000, but calculations showed quickly this much would be saved on lower energy costs in just five years. On the basis of this specific, KLP decided to invest in this type of glass. Close cooperation between the builder and contractor is therefore a prerequisite in order to create environmentally friendly solutions.
A new challenge facing us now today, however, is getting potential tenants to see the value in the same calculations. There is an established norm in the rental market for commercial property that focuses heavily on the rent per square meter, and here environmental buildings generally don't fair as well. If you look at the total tenant cost over several years, the bigger picture is however quite different. We believe the rental price in future should be changed from a unilateral rent per square meter to the estimated total costs of a tenant over time. Here, we believe real estate agents have a clear responsibility, and we are trying to influence the industry to change the current pricing norm.

In addition to finding optimal environmental solutions for new buildings, we are also working to find optimal solutions in the rehabilitation of existing buildings so that energy consumption falls to a sustainable level. This is especially important, since only 1 per cent of buildings are upgraded or built every year.

Projects in Norway:

Assuming that the average energy consumption for a building's total mass is 250 kWh/m² / year and that the potential for energy savings is an average of 150 kWh, society can save 30 TWh / year or 25 per cent of total electricity consumption in Norway by modernising buildings.

Working with government

As part of Veidekke's commitment to the environment it is natural that we have clear opinions about the government's environmental standards for construction. In Sweden, we are a part of "Bygg-bo" dialogue - a unique collaboration between private industry, municipalities, authorities and government. The aim is for participants in the business sector to voluntarily become more climate-smart than current legislation proposes. The goal is that before 2025 we should have established a sustainable building and construction industry in the three areas of health and indoor environment, efficient energy, and efficient use of resources. Norway has been active in hearings regarding the new Planning and Building Act, which took effect 1 July 2009. We have also contributed through a committee which has prepared a new standard for passive-and low-energy housing in Norway, and being a member of the "Green Building Alliance" has helped to initiate a Norwegian environmental classification for buildings.

In 2008, Veidekke Bostad signed the "Stockholm klimatpakt", a challenge to the city's business community to work actively on climate issues. All companies that sign this agreement undertake to work towards a 10 per cent reduction in greenhouse gas emissions in the 2007-2010 period, and must annually report the status of this work to Stockholm city. In Sweden, we are contributing even now via the "national guidelines for environmental adaptation of buildings" as the building and construction industry is proposing tougher environmental standards than what regulations require. Here, a minimum level of environmental adaptation is defined and serves as guidelines for industry players, and as national guidelines for municipalities that will set environmental standards for their construction projects.

External environmental

Veidekke actively participates on climate, energy and environmental committee under the auspices of the Construction Association. Veidekke's role on the committee is to adhere to the committee's mandate and to actively participate with our knowledge and experience in the meetings. On behalf of the association, we follow the environmental work in FIEC (Fédération de l'Industrie Européenne de la Construction), which is the European trade association for the building and construction industry. Themes here are climate challenges, environmental labeling schemes, legislation and standardisation within the European Union.