BERKELEY SUSTAINABILITY REPORT 2010 About This Report

BERKELEY SUSTAINABILITY REPORT 2010 About this Report

This is Berkeley’s ninth annual Sustainability Report. It provides a summary of the progress we have made in managing our key environmental, social and economic responsibilities over the twelve months, from May 2009 to April 2010. It also provides an overview of our new sustainability strategy – Vision 2020.

Berkeley and Sustainability At Berkeley, the term ‘sustainability’ describes how we manage the environmental, social and economic impacts of, and risks facing, our business in a responsible and sustainable way. This applies both to the day-to-day management of our business and the developments we build. The final content of this report was defined in consultation with our key stakeholders as described throughout the report.

Scope Unless otherwise indicated, the data in this report covers all of Berkeley’s operations. This summary report focuses on those issues that we consider most material to the running of our business. Additional information on our business and financial performance, corporate governance, regulatory issues and Directors’ remuneration is provided in our Annual Report and Accounts. Full details of our approach to sustainability including all policies, additional case studies and performance data can be found on our website: www.berkeleygroup.co.uk/environment.

Global Reporting Initiative (GRI) We are delighted this year to have benchmarked our sustainability reporting to Level B of the Global Reporting Initiative (GRI) Sustainability Reporting Framework (having reported to Level C in the last two years). The GRI Framework sets out principles and indicators for measuring and reporting on economic, environmental and social performance in a balanced and transparent manner. An index of conformance with the guidelines and an explanation of how we comply with the GRI principles is available on our website: www.berkeleygroup.co.uk/environment.

Feedback If you have any feedback on this report, or any further questions, please contact: [email protected].

Front cover image: Imperial Wharf, London Contents

■ Introduction About this Report 2 3 Berkeley – who we are 4-5 Our achievements in 2009/10 6 Rob Perrins Managing Director – The Berkeley Group 7 Berkeley – Our vision for 2020 8-9

■ The Customer Experience 11 The operating environment 2010 – 2020 12-13 Our achievements in 2009/10 14-15 Leading by example – driving the market for more sustainable homes 16-17 Focus on: The Customer Experience 18-19 Achieving our vision The Customer Experience – Our vision for 2020 21

■ Building Greener Homes 23 The operating environment 2010 – 2020 24-25 Our achievements in 2009/10 26-29 Focus on: Building Greener Homes Interview with Karl Whiteman Director in Charge of Sustainability 30-31 Leading by example – Royal Arsenal Riverside, Woolwich 32-33 Achieving our vision Building Greener Homes – Our vision for 2020 34-35

■ Delivering Sustainable Communities 37 The operating environment 2010 – 2020 38-39 Our achievements in 2009/10 40-41 Leading by example – Building for Life 42-43 Focus on: Building Sustainable Communities Richard Simmons, CABE 44-45 Achieving our vision Delivering Sustainable Communities – Our vision for 2020 47

■ Running a Sustainable Business 49 The operating environment 2010 – 2020 50-51 Our achievements in 2009/10 52-59 Achieving our vision Running a sustainable business – Our vision for 2020 60-61 Governance of our vision 63 Summary of 2009/10 Performance 64 Summary of progress against 2009/10 targets 65 Battersea Reach, London Upstream Sustainability Services – Jones Lang LaSalle 67 Berkeley – who we are

4 Birmingham In the thirty four years since it was founded, Berkeley has built a reputation for 1 Royal Clarence Marina 2 Gunwharf Quays 5 Summers Palce creating homes that surpass expectations in terms of design and the quality of construction. Operating at a natural size affords our autonomous management teams the time to focus on the detail and deliver the homes and places that our Worcestershire 8 Cambridge customers aspire to live in. These core values were instilled in the business from the very beginning and remain central to what we do today. It is these values combined Bedfordshire with financial strength and the exceptional experience, knowledge and skill of our 11 Worcester teams that make Berkeley unique and a leader in the homebuilding industry.

Berkeley has a number of core brands: Berkeley, St George, St James and Buckinghamshire Hertfordshire St Edward, our joint venture with Prudential. Each brand is underpinned by the Gloucestershire Oxfordshire 12 core values of Berkeley. The developments we create range in size from under Thame twenty homes, to complex mixed-use urban regeneration schemes with over four 10 thousand homes. Across the brands our developments encompass contemporary Essex urban apartments, refurbished historic buildings, traditional family homes and 17 London innovative mixed-use schemes. West 14 Berkshire 3 BerkshireBe During 2009/10 Berkeley sold 2,201 homes and over 45,000 sq ft of commercial Wiltshire 7 space on nineteen mixed-use developments. We have also delivered a range of new 9 4 13 Surrey Kent facilities, enhancing the communities in which we work, including public spaces, Basingstoke Canterbury new transport links, health centres, gyms and crèches. Hampshire In the last year we have seen the housing market in London and the South East 15 stabilise and a growing sense emerge that the worst is over with a return to GDP 5 Billingshurst East Sussex growth. Although the homebuilding industry still faces lasting challenges from WestWestS Sussexuss the financial downturn, it is important that there is a continued and concerted Eastbourne commitment from the private and public sector to work together to address the Gosport 1 2 6 shortage in supply of quality housing. I look forward to Berkeley being at the 16 forefront of this partnership. A vibrant housing market has so many knock-on Portsmouth N effects on the wider economy, employment and addressing social issues.

Tony Pidgley Chairman 6 All Saints 7 Holborough Lakes 9 Kingsbrook Park INTRODUCTION

London

1 Royal Arsenal Riverside 2 Caspian Wharf 3 City Quarter 5 4 Silkworks 5 Camberwell Grove 1 Royal Arsenal Riverside 2 Caspian Wharf 3 City Quarter 6 Woodberry Park 9 Imperial Wharf 6 Woodberry Park 7 Ultima at Chelsea Bridge Wharf 8 Kingsway Square 9 Imperial Wharf 10 Battersea Reach 11 St George Wharf 19 Barnet 12 Queen Mary’s Place Harrow 17 13 The Hamptons 6 14 Kingswood Chase Hackney 15 West3 London Apartments Bow 16 Napier at West3 2 17 Beaufort Park City 18 Parkwest Acton 3 18 West Drayton 15 16 19 Stanmore Place 22 20 Kidbrooke 21 Woolwich 1 Battersea 11 Vauxhall 21 Dickens Yard 7 9 8 5 Camberwell 20 22 375 Kensington High Street 23 Saffron Square Wandsworth 10 Clapham 4 Lewisham 12 Roehampton South East Chislehurst 14 1 Royal Clarence Marina 13 Worcester Park 2 Gunwharf Quays 23 3 Kennet Island 4 Skyline Plaza 5 Summers Place 6 All Saints 7 Holborough Lakes 8 Cambridge Riverside 9 Kingsbrook Park 10 The Renaissance 11 The Waterside, Royal Worcester 12 Orchard Grove 13 Edenbrook 14 Victory Pier 15 The Paddocks 16 Bersted Park 11 St George Wharf 13 The Hamptons 14 Kingswood Chase 15 West3 17 Beaufort Park 17 Butlers Court

A selection of current sites July 2010 Our achievements in 2009/10

The Customer Experience Building Greener Homes Delivering Sustainable Running a Communities Sustainable Business ■ 93% of customers would ■ Delivered our first Code Level recommend us to a friend 3 homes ■ Silver Building for Life Awards for ■ Achieved a sector leading low ■ Forward sales of £648.1 million ■ Over 17,000 units committed Imperial Wharf and City Quarter accident rate of 3.8 and our accident frequency rate (AFR) to Code Level 3 ■ 2,201 residential units sold ■ Over 5,000 jobs are likely to be of 0.18 is ‘world class’ ■ 100% of development on created on completion of our previously used (brownfield) land schemes under development ■ 13 ROSPA Gold Awards

■ 30% of sites under construction ■ Average score in the Considerate ■ Reduced operational incorporate renewable energy Constructors Scheme is 35.3 carbon emissions by 22% compared to the industry ■ First place in the 2009 ■ 91% of homes completed were average of 32.2 within 500m of a transport node NextGeneration Sustainability ■ Committed all schemes on sites Benchmark of the UK’s top ■ 64% of homes completed seeking planning to achieve the 25 homebuilders were certified to Ecohomes Building for Life Silver standard or Code standards ■ Retained listing in FTSE4Good

% of customers that would recommend us to a friend Proportion of units built to environmental standards 2009/10 3.8 2006/7 2009/10 2008/9 3.9 2007/8 2008/9 2008/9 2007/8 3.8 0%20% 40% 60% 80% 100% 2007/08 2009/10 0% 10%5%15% 20% 25% 30% 35% 40% 2006/7 7.2 % of units certified 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Average Score in the Considerate Constructors Scheme 2005/6 4.5 Ecohomes very good Code Level 3 Injury Incident Rate (RIDDOR) per 1,000 employees Ecohomes excellent No certification and sub contractors

Recent recognition of our achievements INTRODUCTION

Rob Perrins Managing Director – The Berkeley Group 7

For Berkeley, being a successful developer is about more than financial results alone. It is also about creating sustainable places that we can be Our vision for 2020 proud of – places where people aspire to live and where they can enjoy Moving into the new financial year, Berkeley will continue to focus on its working and relaxing. This is our passion and as a result, the principles customers and the homes and places we create. We have announced of sustainability are embedded in our business practices at both a an ambitious new strategy which we have called “Vision 2020”. Vision strategic and project level. We believe that this enhances our business 2020 sets objectives for the next decade across all areas of the business performance and gives Berkeley a definitive competitive advantage. for the benefit of our customers, the environment, our people and all our stakeholders. The strategy’s overarching objective is to achieve our Our strong 2009/10 sustainability achievements, when considered vision that “By 2020 our stakeholders view us as the leader in delivering alongside the strength of our 2009/10 financial results, demonstrate sustainable communities, as well as being one of the UK’s most that financial and sustainability performance can go hand in hand. I am sustainable businesses”. therefore extremely pleased that we have been able to remain steadfast in our commitment to sustainability despite the challenges posed by the In devising Vision 2020, we examined all aspects of our business and economic climate over the last two years. reviewed the external operating environment, considering factors such as how the legislative landscape may develop between now and 2020, Sustainability Achievements evolving stakeholder requirements and examples of best practice across all business sectors. Vision 2020 is ambitions but achievable. Our approach to sustainability continues to be recognised externally. It is designed to move the business and industry forward over the next We were delighted to remain in first place (for the third consecutive year) decade and we welcome any feedback you may have. in the 2009 NextGeneration sustainability benchmark of the UK’s top 25 homebuilders and our sustainability strategy was key to us being named Housebuilder of the Year at both the Building Awards and the What House? Awards. We also continued to make progress in reducing our carbon footprint by achieving a 22% reduction in CO2 emissions during 2009/10, significantly in excess of our 5% reduction target. Our transparent and increasingly robust carbon emissions reporting led to us being named as a sector leader in the 2009 Carbon Rob Perrins Disclosure Project. Managing Director

The past year saw the certification of our first homes to Level 3 of the Code for Sustainable Homes (the UK Government’s environmental certification for new homes) at Slade Park, Oxford. Since January 2008, when we became the first homebuilder to commit to Level 3 of the Code, over 17,000 homes have now been submitted for planning that will meet this level. This is a significant achievement and an industry leading position.

Our health & safety record continues to be extremely strong. Our accident incident rate for 2009/10 of 3.8 per 1,000 people working on our sites is one of the lowest in the industry. Winning a number of health & safety awards during 2009/10 is testament to our proactive approach in this area. Berkeley – Our vision for 2020

8 “ By 2020 our stakeholders will Our vision for 2020 Our vision (left) sets out where Berkeley wishes view us as the leader in delivering to be in 2020. Achieving our vision will ensure that sustainable homes and communities, we maintain our current position as an industry leader, thereby managing risk, capitalising on opportunities as well as being one of the UK’s most and maximising value for our shareholders. This vision is not a set of new aspirations for Berkeley, rather sustainable businesses.” it builds on our existing strategy and our understanding of the challenges and opportunities the business will need to address over the next ten years. These challenges and opportunities include changes in legislation, stakeholder demands, the need to adapt to a low carbon economy and climate change.

We have identified four material impact areas in which we must drive performance to achieve our vision. These are illustrated in the diagram below. In each impact area we have developed a more detailed vision which responds to the specific challenges and opportunities we foresee in that area. Our detailed vision for each impact area is set out on the first page of each of the chapters in this report.

THE CUSTOMER BUILDING GREENER EXPERIENCE HOMES

ONE OF THE UK’S MOST SUSTAINABLE BUSINESSES

DELIVERING SUSTAINABLE RUNNING A SUSTAINABLE COMMUNITIES BUSINESS INTRODUCTION

9 Achieving our vision In order to achieve our vision for 2020 we have put in place a ten year strategy which builds upon the commitments that we have already made. Within this report we have set out these commitments alongside a number of ambitions for 2012. In 2012 we intend that these ambitions will form the basis of new commitments and we will then publish a new set of ambitions that will continue to move us towards the achievement of our overall vision.

OUR COMMITMENT THESE ARE OUR AMBITIONS OUR VISION INITIATIVES THESE ARE INITIATIVES WHICH WE WILL IMPLEMENT WHICH WE HAVE SETS OUT WHAT WE FROM MAY 2012. IN 2012 WE WILL PUBLISH NEW WOULD LIKE TO IN PLACE ON ALL AMBITIONS TO DRIVE US TOWARDS OUR 2020 VISION DEVELOPMENTS ACHIEVE BY 2020 FROM MAY 2010

CONTINUOUS IMPROVEMENT IN THE SUSTAINABILITY PERFORMANCE OF OUR BUSINESS AND THE HOMES AND COMMUNITIES WE BUILD

2010 2012 2014 2016 2018 2020

Why are ambitions only provided to 2012? Given the highly regulated nature of the homebuilding sector, and the fact that a number of key pieces of legislation affecting the sector are still under consultation, it was not felt appropriate to provide specific standards after 2012. We hope that by 2012 the housing sector will have more certainty on how future legislation will be implemented and we will be able to provide more detailed ambitions to take us to our vision for 2020. 10

Skyline Plaza, Basingstoke 11

THE CUSTOMER EXPERIENCE The Customer Experience Our vision for 2020

“ In 2020 customers will continue to In this section: demand well-designed, well-built homes where they can live happy, healthy and The Operating Environment environmentally-efficient lifestyles. 2010 – 2020 Residents will want homes that are part Why our customers are at the heart of our of a community and provide easy access business, and how we will work with them to work and leisure. The customer will to achieve our vision remain at the heart of our business, 12 – 13 and their needs will be reflected in the bespoke design of every one of our developments.” Our Achievements in 2009/10 What progress we have made in the past year to engage with our customers, and provide exemplary customer service

14 – 19

Achieving our Vision What commitments and ambitions we have put in place to ensure that we can achieve our vision for 2020

21 The operating environment 2010 – 2020

Maintaining our strong reputation amongst customers is critical to the success of our business, and the customer is at the heart of every decision we make at Berkeley. We will not falter in this approach between now and 2020, but it is likely that in ten years time our operating environment may be radically altered. We do not know, however, exactly how the landscape will look and what the exact needs and demands of our customers will be. Some things we can anticipate with relative confidence, but others we are less certain about – as shown below:

Changes that could occur by 2020 that will influence customer demand and choices

HIGH DEGREE Need for more homes and more New homes to be highly energy Demographic change means there OF CERTAINTY affordable homes efficient and generate their own power is a larger, older population in the UK

Domestic energy and water prices are significantly higher

Legislation and policy driving reductions Cost of travel is more expensive, Customers will be feeling the impacts in carbon emissions from the existing driving demand for well of climate change in their every day stock and changing customer awareness connected homes lives, and will be more aware of the sustainability agenda

Customers demand more sustainable Customers want homes that are part homes therefore driving higher of a community and have access to sales values community facilities and networks

New technological innovations have Legislation introduced to reduce influenced the way in which people live personal carbon emissions and work, and this has lead to significant LOW DEGREE changes in people’s expectation of OF CERTAINTY their homes Opportunities and Risks for our business As part of our extensive sustainability risk review undertaken in 2009/10, we looked in detail at the opportunities and risks that 13

the drivers opposite may present to our The Customer Experience Is the market ready business. The key findings are for zero carbon? outlined below: With the Government’s target that from 2016 all new homes will need to be zero carbon, there are Opportunities still many questions around what impact this will have on our customers. Current research generally ■ Increasing customer satisfaction as technological indicates that while customers welcome more innovation in the home increases environmentally efficient housing, the concept of ■ Engaging with customers about the energy and water zero carbon is still poorly understood. efficiency of their homes, and using efficiency as a Between now and 2016 we, along with other unique selling point of Berkeley homes industry stakeholders, will need to educate the ■ Commissioning market research to fully understand customer and bridge the gap between legislative the needs of actual and potential customers requirements and customer demands. We are working with Government and industry, through groups such as the Zero Carbon Hub, to share and Risks engage with large sections of the market. We will ■ also continue to monitor the performance of the Poor quality product could expose the Group homes we build to ensure that we can feed the to reputational damage as well as the cost of lessons we learn back into the design of our correcting issues future homes. ■ Design features imposed as a result of increased environmental regulation (water efficiency, specification choices) leading to poor customer satisfaction

Risk Management Processes ■ Detailed market assessment undertaken on each site before acquisition, as well as ongoing reviews throughout the duration of the site to ensure that supply is matched to demand ■ A detailed review of the product is undertaken throughout the build process by experienced personnel ■ Trialling technology, and carrying out post-occupancy monitoring ■ Engaging with Government and decision-making bodies to influence future policy direction ■ Ensuring that we match supply to demand in terms of product, location and price Our achievements in 2009/10

The Housing Market Delivering consistently The Customer Journey After two years of correction, the housing sector has gone high customer satisfaction Across the Group, we have over 200,000 enquires a year, through a period of relative stability over the last year. which is extremely high for the industry. The customer is at the heart of every decision we make at However, there are still residual imbalances from the financial Berkeley. Our success depends upon us continuing to meet Our Sales, Customer Relations and Customer Service downturn which will continue to affect the wider economy and our customers’ expectations and delivering on our promises. departments each play a vital role in shaping the customer sector. The past year has seen a period of trading that has This begins at the land acquisition stage and continues right experience, from initial enquiry through to the purchase of been stronger than many anticipated. The value of our sales the way through to our after sales care. We only acquire sites the property and beyond. We have in place detailed protocols reservations has been broadly consistent across the year. where we have a vision to create a place where people will want setting out what the experience of customers should be, and This demonstrates that the market in London and the to live and we keep this vision at the forefront of our minds what the roles and responsibilities of each department are, South East has stabilised following a period which, in 2007, throughout the development process. to ensure a smooth and professional service and ultimately saw the market peak and, since 2008, has seen the impact satisfied customers. The diagram opposite provides a of the global financial crisis. In this new environment, Our consistently high customer satisfaction score – 93% summary of how this journey works. sales reservations are approximately 40% lower than what over the past year – shows that we continue to meet our previously might have been considered a normal market. customers’ needs. Sales prices achieved in the year have been marginally ahead of our forecasts, and cancellation rates are at normal levels. % of customers that would recommend us to a friend This shows that, where customers have sufficient equity, 2006/7 they are seeing value and acquiring the well-located properties, 2007/8 developed to a high standard of quality and specification, 2008/9 for which Berkeley is renowned. While the UK private domestic 2009/10 market remains constrained by economic and political 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% uncertainty and the extent to which customers are able to obtain sufficient mortgage finance, demand from equity-rich investors and those from overseas who are aided by the weakness of sterling has been strong, particularly for our Central London schemes. As a result, investors continue to account for over 50% of underlying sales. Over the past year our customer satisfaction score was Berkeley has always benefited from its diversity of product and customer and this year has worked closely with the Homes & Communities Agency to secure a wide mix of affordable homes, including extra care for the elderly. In addition, demand remains strong for quality income- % generating assets, such as student accommodation which is a feature of a number of the Group’s developments. 93 The Customer Journey: Our way of ensuring that we have satisfied customers 15 The Customer Experience

PRE-RESERVATION RESERVATION EXCHANGE NOTICE TO COMPLETE LEGAL COMPLETION

FIRST IMPRESSIONS MAKING BUYING EASY Our Sales team are the first Once our customers have made point of contact with customers, the decision to purchase, it and play a key role in building is the role of the Sales team positive relationships. An to go through the reservation important part of this is dealing process and to discuss the effectively with customer documentation required prior to enquires and ensuring that they purchase. It is also the point at provide all information required which the Sales team introduce to take decision making forward. the customer to the Customer Relations Manager. The demonstration of the homes and the development, forms one ENSURING A SMOOTH JOURNEY of the key areas in the purchaser Our Customer Relations team takes full responsibility for the experience and all our sales and customer from exchange of contracts up to legal completion. marketing teams are trained to They ensure that the customer understands what they can expect ensure that they have an in-depth during the process. Our Customer Relations team communicates understanding of the product. directly with the customer to provide support and guidance at all times. It is their role to ensure that customers’ expectations are delivered in accordance with the sales literature.

SETTLING CUSTOMERS INTO THEIR NEW HOME Customer Services manage the customer relationship once the home has been completed. They are responsible for providing a demonstration of the home, handing over the keys and ensuring that the customer is happy with their home. They are also responsible for following up with the customer once they have moved in, as well as dealing with any issues that may arise post occupancy. Leading by example – driving the market for more 16 sustainable homes

Helping our customers lead more sustainable lives Sustainability is becoming an increasingly important issue for our customers. We actively promote the sustainability attributes of our homes and developments to them. We work closely with customers to help highlight these features, and ensure that once they have moved into their home they know how to use them effectively. In order to do this, we undertake sustainability training with our Sales and Customer Relations

There are many features We ensure that a thorough We have undertaken that we install in homes that handover process takes place post-occupancy monitoring help residents to lead more with every sale. It is important to ensure that we understand sustainable lifestyles that are that customers understand and how our customers use their not necessarily obvious, such know how to use all the features homes and what the actual as low energy light fittings, in their home, to maximise the environmental impacts are. energy- efficient appliances benefits from them. This is We use this information to and low-flow taps. especially pertinent when we influence the design of install new technologies. future schemes. Communicating with customers about sustainability 17 The Customer Experience

Sales and marketing suites provide information to the customer on the sustainability features of the development.

Our website has an interactive house which provides tips to customers on how they can live more sustainably in their home.

Handover packs are given to all residents, which feature information on sustainability, including tips on features in the home, green transport, and community facilities in the area.

At our larger developments we provide tailored communications to residents. For example, at Beaufort Park we provide residents with information on amenities and facilities in their local area.

Queen Mary’s Place, Roehampton Focus on: The Customer Experience Greg Hall has been living in 18 Royal Arsenal Riverside since March 2010

Greg Hall Resident at What attracted you to Royal Arsenal? How did you feel you were treated by Royal Arsenal Riverside Royal Arsenal Riverside is the perfect home for me. Berkeley during the sales process? I had a change of roles at work at Canary Wharf which meant I felt very well taken care of by Berkeley throughout the that my financial situation had improved, and I was in the purchase of my home. As a first-time buyer this was especially Q&Asposition to buy my first home. I chose Royal Arsenal Riverside important to me. The Berkeley team were able to answer any because I was looking for a high-quality apartment in East questions that I had. What made the biggest difference for me London that enables me to get to and from my work at Canary was that even after the sale they are still as helpful and friendly Wharf quickly. to me which is fantastic.

What do you like about the apartment? I would definitely recommend Berkeley and Royal Arsenal It is brand new and has been designed to a high specification Riverside to any of my family and friends who are seeking and with great attention to detail which is what you would a new home. Berkeley is undoubtedly the leading housing expect of an apartment of this calibre. The full-length windows developer as it provides excellent quality homes and service. are a great feature because they allow a lot of natural light into the apartment. The open plan kitchen and lounge are well laid out. There is a lot of room to move around in and to entertain my friends and family.

There is always a constant temperature in the apartment which means the heating is rarely switched on. I have only lived here for a short while but I am sure that this will help with saving costs on my energy bills. 19 The Customer Experience

“ I would definitely recommend Berkeley and Royal Arsenal Riverside to any of my family and friends who are seeking a new home.”

The Thames Clipper arriving at Royal Arsenal Riverside 20

The Hamptons, Worcester Park Achieving our vision The Customer Experience – Our vision for 2020 21

“ In 2020 customers will continue to demand well-designed, well-built The Customer Experience homes where they can live happy, healthy and environmentally-efficient lifestyles. Residents will want homes that are part of a community and provide easy access to work and leisure. The customer will remain at the heart of our business, and their needs will be reflected in the bespoke design of every one of our developments.”

Our commitment – From May 2010 Our ambitions – From May 2012

Customer satisfaction ■ Survey every customer to measure satisfaction ■ Survey every customer to measure satisfaction and and continue to target that over 90% would target that over 95% would recommend us to a friend recommend us to a friend ■ Carry out detailed post-occupancy monitoring at 25% of sites in order to measure the success of our designs and to influence the design of future schemes

Selling the benefits ■ Communicate Vision 2020 to all customers ■ Launch ‘Pledge for a better tomorrow’ – a partnership between Berkeley and our customers to make it easier ■ Highlight the sustainability benefits of our for residents to have a more sustainable lifestyle developments in all sales and marketing materials/handover packs ■ Install Smart Meters in at least 75% of new homes to help our customers understand their energy use ■ Train all sales and marketing staff in sustainability so that they are able to sell the benefits to customers ■ Provide tenant fit-out guidelines to commercial customers enabling them to optimise the ■ Ensure that all commercial space achieves BREEAM environmental performance of the premises Very Good or is capable of achieving BREEAM Very they purchase Good if the fit-out is to be undertaken by the tenant

Driving the market ■ Undertake market research on at least 25% of ■ Provide 25% of customers with a ‘sustainability for sustainable homes purchasers to understand how sustainability influences options’ package which enables them to select their home buying preferences additional sustainability features for their homes 22

Kingswood Chase, Chislehurst 23 BUILDING GREENER HOMES Our vision for 2020

“ We will have completed our first zero In this section: carbon community and all of our new developments will be low or zero carbon. The Operating Environment Our proven track record of delivering 2010 – 2020 Building Greener Homes high quality, well-designed homes with What are the current and future challenges low environmental impacts will make and opportunities we face in the delivery of them desired by customers and will have green homes expanded our market base. Homes built 24 – 25 by The Berkeley Group will be recognised throughout the industry as innovative and best practice.” Our Achievements in 2009/10 What progress we have made in the past year to build greener homes

26 – 33

Achieving our Vision What commitments and ambitions we have put in place to ensure that we can achieve our vision for 2020

34 – 35 The operating environment 2010 – 2020

The homes we build are our legacy. Through their everyday use, homes can create significant environmental impacts. We recognise that as a developer we can play a key role in creating well-designed, environmentally-efficient homes that are desired by our customers. The homes we build today will need to last and be able to adapt to changes in a range of areas including technological innovation, changing demographic and socio-economic needs, as well as climate change.

The timeline below sets out some of the key changes that will occur or are expected to occur over the next ten years. All of these issues will have an impact on our operating environment and the delivery and demand for greener homes. Our sustainability strategy and vision enables us to prepare our business for these changes and capitalise on the opportunities. 2010 2012 2013 2014 2015 2016 2011

Energy efficiency improvements Homes and Communities Energy efficiency improvements All new homes required to driven through amendments to Agency (HCA) will require all driven through amendments be ‘zero carbon’ implemented Part L of the Building Regulations homes they fund to achieve Code to Part L of the Building through the Building Regulations requiring a 25% improvement For Sustainable Homes Level 4 Regulations requiring a over 2006 standards 25% improvement over 2010 standards

Introduction of the Flood and Proposed introduction of Water Management Act which the Renewable Heat Incentive will have implications for water rewarding customers that management on developments use sustainable heat

Introduction of Feed In Tariffs which will reward homes that generate energy through renewable sources on page 30. Sustainability for Berkeley setsoutourviews onthezero carbonpolicy Karl Whiteman, Director of ■ ■ ■ carbon home: zero carbon.Itisexpected thatthefollowing willneedtobeimplementedachieve azero of a goal toachieve ZeroCarbonnew homesfrom2016.The isstillawaitingafinaldefinition industry In 2007,theGovernment published apolicy statement ‘BuildingaGreener Future’ which setout and thehousebuilding sector? Zero Carbonhomes–what doesthis mean for Berkeley

ito ‘allowable solutions’,which are yet tobefinalised a listof thenew homesbyTackling choosing measures from the remaining carbonemissionsof renewable energy onsite Aminimum 70%carbonreduction onthesite, achieved throughtheprovision of new homes(39-46kWh/m2/yr) efficiencyin thefabric energy of Agreatly increased level of 2017

2018 FINANCIAL INCENTIVES LEGISLATION/POLICY CHANGES

compared to1990levels in carbonemissionsby 2020 UK toachieve a34%reduction 2019

2020 The key findingsare outlinedbelow: that thedrivers oppositemay present toourbusiness. andrisks in 2009/10,welooked indetailattheopportunities ourextensive sustainability riskreview undertaken of As part for ourbusiness andRisks Opportunities ■ ■ ■ ■ ■ ■ ■ ■ Risk Management Processes ■ ■ ■ ■ Risks ■ ■ ■ ■ Opportunities

Post-occupancy monitoring up earlyandcanbe addressed inschemes Sharing knowledgewithintheindustry toensure thatissuesare picked Ensuring thatschemedesignconsiders climatechangerisk Being prepared forlegislationbefore implementation of theirservicesand/orproducts Engagement withsupplierstoimprove theenvironmental performance Knowledge sharingtoensure thatcosteffective solutionsare shared across theGroup Engagement withpolicymakerstoinformdecisions Continual fl ood riskassessment of sitesinthelandbank negative consequencesforcustomer’s comfortorbuildingsnotperformingasdesigned Implementing buildingstandards toimprove environmental effi ciency leadstounintended Code forSustainableHomes) Increasing costofmeetinglegislativeconditions(eg.planningconditions, diffi cult toplanforthefuture Defi nition ofzero carbonundefi ned, leadingtouncertaintyaround deliveryandmakingit loss inlandvalues) Environment Agencyreclassifying fl ood riskofthelandheld inthelandbank(leadingto due toincreased costofcarownershipandchangingworkingrequirements Customers demandinghomeswithgoodtransportlinksandhomeworkingfacilities oversupplies,leadingtoincreasedas concern demandfor‘green’ homes Increase inthecostofdomesticenergy(gasandelectricity)water, aswell our UrbanHouseissuitedtohighdensityconditionsanddeliversgreen space) Developing adifferentiated product whichsuitsthechangingenvironment (eg. to shapethesustainabilitydebateandinfl uence future policydirection Demonstrating sectorleadershipenablesustoengagewithGovernment

Building Greener Homes Greener Building 25 Our achievements in 2009/10

Achieving environmental Achieving environmental Adapting to climate change performance standards performance standards: Slade We take a dual approach to addressing climate change – combining both mitigation (ensuring that the homes we build In 2008, we were the first housebuilder to commit to building Park, Oxford do not contribute to further climate change) and adaptation all new homes to Level 3 of the Code for Sustainable Homes. Slade Park is located on the edge of Oxford in a (ensuring that the homes we build can withstand future By using the Code for Sustainable Homes to assess the residential suburb. The site is being redeveloped to climatic conditions). We recognise that the developments sustainability performance of homes we build, we can provide provide a mixture of residential housing and dedicated we build today are likely to be impacted by the affects of independent assurance of our commitment to both customers student housing. The entire site was developed with climate change at some point in their future. and stakeholders. sustainability in mind and the residential buildings are In order to ensure that we consider future climate change the first in the Group to achieve Code for Sustainable Since implementing our targets, we have committed over risks, we examine flood risk as part of our due diligence Homes Level 3. 17,000 units to Code Level 3 (99% of all units taken to approach to buying land, and work with local planning planning). Due to both economic viability and constraints Different strategies were employed in the houses and authorities to agree suitable flood protection measures at all on some sites we will not achieve Code Level 3 on 293 units. flats but features incorporated across the scheme to developments. 68% of our developments include sustainable More details on this can be found on our website. achieve the Code Level 3 rating include: urban drainage systems (SUDs) to reduce the risk of flooding to the development and local area. In 2009 we were delighted to complete our first Code Level 3 ■ Highly energy efficient building fabric homes at our Slade Park development (see case study right). ■ Solar photovoltaic roof tiles – an innovative form In 2009, we also mapped the predicted changes in climate We continue to proactively engage with Government to develop of solar panel which provided the renewable energy in the areas in which we build (see below), and found that the Code and ensure its deliverability for the industry and sit required for the scheme and replaced conventional temperatures could increase by up to 1.5°C by 2020. on a number of industry working groups. roof tiles We therefore need to ensure that customers do not become ■ Recycling bins uncomfortably hot in their homes, and we are exploring Proportion of units built to environmental standards ■ Designed to Lifetime Homes Standards design solutions to accommodate this. ■ Low water use taps, showers, baths and appliances specified to achieve a total potable water use of 105 0% 20% 40% 60% 80% litres per person per day % of units certified 100% ■ Ecohomes very good ■ Code Level 3 ■ Ecohomes excellent ■ No certification

Since May 2009, we have committed to build over 17,000 new homes to Code Level 3 27

Improving energy efficiency Improving water efficiency Increasing the energy efficiency of homes, and reducing the Water shortages are predicted to become increasingly amount of energy our customers need to run their home is common across many parts of the UK, especially in of paramount importance to us. Not only does this result the South East, as summers become hotter and drier, in a lower environmental impact, but also saves residents and demand for water rises. money through lower electricity and heating bills. All new homes are designed to ensure that water use does not In 2009/10: exceed 105 litres per person per day. This is achieved through careful design, and installing technologies such as aerated ■ 30% of sites under construction incorporated renewable taps and dual flush toilets. energy solutions, and 23% incorporated low carbon Building Greener Homes community heating 36% of our developments also incorporate rainwater or greywater harvesting and recycling. Drinkable water is not ■ Our average SAP rating was 80 compared to an average wasted through functions where non-drinkable water would rating of 48.5 for the existing housing stock work equally well, such as flushing the toilet or for watering ■ Our commitment to achieving Code Level 3 means that we plants. For example, Silkworks will incorporate a 20,000 litre will reduce carbon emissions by 25% compared to the 2006 storage tank under the development which will collect water Building Regulations requirements. A number of schemes that can be used for the landscaped areas. have gone beyond this benchmark as demonstrated in the In 2009, we were delighted to win the Water Solve Award graph below: in the Environment Agency’s Water Efficiency Awards for our Code for Sustainable Homes Water Test Unit at West 3 (pictured above left). We used the test unit to determine the Percentage CO2 reduction compared to a 2006 Building Regulations compliant home Code’s impact on water usage with a view to informing our

Benchmark future specifications. for a 2006 Building Regulations Code Level 3 compliant home compliant home

Ropetackle Royal Arsenal Riverside Trinity Place Edenbrook Griffon Studios Caspian Wharf

of sites under construction have % renewable energy 30 systems in place Our achievements in 2009/10 (continued)

Berkeley brownfield development 2005/6 to 2009/10 New build housing on brownfield Govt. brownfield development target 0%10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % % of development on brownfield land 73 Enhancing ecology and of homes completed in 2009/10 maximising land use were provided with recycling facilities We take pride in enhancing the flora and fauna at our developments, both for the benefit of the environment and for the enjoyment of local communities. Reducing waste All our sites employ an ecologist to identify how we can The average person in the UK generates around 500kg of enhance the flora and fauna at developments. Many sites waste a year. The majority of this waste is currently sent therefore incorporate parkland and features which support to landfill, which has a number of negative environmental wildlife. For example, a long-term bat roosting site has been impacts including contributing to climate change through provided at Edenbrook, Fleet to support the brown long-eared gasses released by decomposing waste. Space in landfill is bat found in the area. The creation of the new Edenbrook also finite, so viable alternatives must be found. country park is also underway. When complete the country park will include 84 acres of distinctive greenery, meadowland, Currently only 27% of household waste in the UK is recycled wetland and woodland areas. Examples of other developments or composted. There are targets to increase this to at least where we have formed new park areas include Imperial Wharf, 45% by 2015 and 50% by 2020. We can help local authorities Beaufort Park and Royal Arsenal, and over 25% of our to meet these targets by installing bins that allow residents schemes incorporate green or brown roofs. to segregate their waste as it is created. We aim to reuse land, and have a target that over 95% of our 73% of our homes completed in 2009/10 were completed developments are on brownfield land. For the last provided with recycling facilities (either within the five years we have exceeded this, achieving 100%. unit or communally on the development). Four of our developments also include composting facilities. Proof of delivery – creating a new station for London at Imperial Wharf

On 30 September 2009 we were delighted to open The station is already being well used. On 1 October 29 Imperial Wharf Station, which is adjacent to our Imperial 2009 a survey by Transport for London showed that 954 Providing green Wharf development. The area had previously been poorly people used it. Six months later we commissioned a travel served by public transport and the opening of this station consultant to undertake a further survey, which showed transport options allows local residents easier access to the Underground its use had increased to 2,461 people per day. Homes and buildings do not exist in isolation and their long- at West Brompton as well as a wide range of local and term sustainability is strongly linked to the wider infrastructure national rail services from Clapham Junction. in place to serve them. An internally commissioned carbon footprinting study found that transport choices can contribute as much to a household’s carbon footprint as the energy used in the home. Vehicle fumes have also been linked with respiratory problems. In addition, obesity and poor health are increasing as people exercise less and use their cars more. Building Greener Homes

In 2009/10, 91% of our developments were located within 500m of public transport services, and across our current schemes we have contributed significant sums of money to making transport improvements. Solutions to promote green travel range from the micro-scale to the macro, and an example is provided to the right. Other examples include having a dedicated travel coordinator at Parkwest, electric charging points at Beaufort Park, and the provision of a shuttle service to the local station at Kennet Island.

This year we also commissioned research to update the CGI of proposed station Photograph of completed station 21st Century London Living Travel Research Survey, which was first undertaken in 2003. This research has found that there has been a significant shift on our developments to more sustainable forms of transport, and that average We have car clubs All projects have 91% of schemes car ownership levels are lower. The survey makes a major in place at 30% cycle storage are within 500m contribution to aiding the understanding of travel habits and will be distributed to local authorities and other key of our schemes facilities of a transport node stakeholders to help understanding of transport use at future developments. Focus on: Building Greener Homes Interview with Karl Whiteman 30 Director in Charge of Sustainability Karl Whiteman Director in Charge of Sustainability

The Group has always seemed to be committed to reducing What do you believe are the main barriers that must be You have been progressive in your approach to installing the environmental impacts of developments, why is this? addressed to ensure the delivery of zero carbon homes? low and zero carbon community infrastructure on your Yes, we have always recognised the benefits this brings to our There are a number of issues that must be addressed in order developments. What have you found the main challenges business and were the first homebuilder to introduce a Climate for the industry to build homes that are sustainable in the to be, and how are you responding to them? Change Policy in 2007. Developing sustainable homes and long-term, and that our customers will want to buy and live in. The main challenges have been: Q&Asplaces has allowed us to build a strong reputation in the sector, which in turn enables us to achieve planning permissions, buy First, the timetable must be achievable, and allow for ■ High costs sufficient time and resources to be invested in research high-quality land and, most importantly, satisfy our customers. ■ Low heat demand and development, to ensure that design solutions work You were also the first private homebuilder to commit to as intended and do not become obsolete. ■ Lack of skills and previous experience within the sector certifying all your homes against the Code for Sustainable Homes, weren’t you? Secondly, the cost of increasing energy efficiency or installing ■ Solutions must be flexible enough to allow for future Yes, we have been committed to certifying all our new homes renewable energy solutions may make marginal schemes changes in low carbon energy provision (excluding refurbishments) against Code Level 3. We are unviable, particularly in the current market. Linked to this, ■ Solutions must be designed to accommodate delighted that this year our first units built to this standard industry and Government will need to work with customers to future phases of a development were completed at our Slade Park development. ensure that the market is ready for more sustainable homes. To overcome this, we have been: Why make the commitment to Code Level 3? Finally, there are several technical issues to overcome, such as: We believe committing all new units to Code Level 3 represents ■ Engaging with Government to help shape future policy ■ district heating systems tend to be viable only on larger, a huge step forward in terms of building sustainable homes, ■ Sitting on various industry groups, including the Zero high-density schemes and sometimes not at all if high but we feel that the market, supply chain and design solutions Carbon Hub work streams and the Energy Efficiency standards of energy efficiency have been achieved need to be fully established and tested before we can advance Partnership for Homes New Build Group even further. It is our ambition that by 2012, we will increase ■ some house designs may not have the required roof space ■ Testing technologies at several high profile developments, this commitment to Code Level 4 once we have had more to support the amount of solar energy resources required, and sharing results across the industry experience of delivering to Code Level 3 across all others may need to accommodate smaller windows or our projects. thicker walls, thus reducing the overall size of the home ■ Investing in staff training and development

What is the Group’s position on zero carbon? ■ there is a limited understanding of the health implications ■ Forming partnerships with the energy supply industry We agree that the hierarchical approach to zero carbon set related to living in homes with low air permeability to explore joint approaches out by the Government is sensible, but the full definition of allowable solutions must be finalised at the earliest All of these issues must be addressed in order for the industry We believe that through active engagement in this debate and opportunity to reduce uncertainty and to enable us to plan to deliver zero carbon homes on a large scale. by demonstrating our own commitment, we can ensure that solutions for sites. the challenges can be overcome and the industry can deliver commercially-feasible and market acceptable low and zero While we agree that it is our responsibility as developers to carbon solutions. install renewable or low carbon technology where possible, we believe that the large-scale generation of zero carbon energy would be best achieved by the experts – the energy industry. 31 Building Greener Homes

“ It is our ambition that by 2012, we will increase this commitment to Code Level 4, once we have had more experience of delivering to Code Level 3 across all our projects.”

Ropetackle, Shoreham 32

Leading by example – Royal Arsenal Riverside, Woolwich

Royal Arsenal Riverside, in Woolwich, South East London is an exemplary mixed-use urban regeneration project. Once complete, Berkeley, in partnership with the London Borough of Greenwich and the London Development Agency, will have created 4,960 new homes and over 26,000 sq m of office, restaurant, hotel, retail and community space. The site also contains a heritage zone, which includes Firepower, the Museum of the Royal Artillery, and the Greenwich Heritage Centre.

The completed scheme will contain a new Construction began on site in 2001 and to date, Berkeley has The approach taken at Royal Arsenal Riverside has been 1.75 ha park, helping to promote biodiversity delivered 1,702 new homes through a combination of new recognised through the following awards: whilst giving the public a new green space build apartments and refurbished historical buildings. Work ■ Sustain Magazine Awards – The Award for Biodiversity to enjoy. is currently underway on a new Young’s Pub which will join a (2010) Couture Food Hall and residents’ gym as the development’s Berkeley has already created over 5,268 sq m completed non-residential elements. Construction of the ■ London Planning Awards – Best Historic Building of brownroof and 849 sq m of greenroof on remaining phases is due to continue for approximately Management (2009/10) The Armouries alone, providing habitat for 20 years. insects, invertebrates and foraging for the rare ■ BURA Award for Best Practice in Regeneration (2008) black redstart. Further areas of brownroof Royal Arsenal Riverside has been designed to link Woolwich will be provided on later phases. town centre to the river front through a network of open space ■ HCA Academy Low Carbon Buildings Category which, it is hoped, will encourage the town centre’s wider Finalist (2008) regeneration. The site also falls within the Thames Gateway, a ■ What House? Awards – Gold, Best Brownfield designated National and Regional Regeneration Area. Ultimately, Development (2009) Royal Arsenal Riverside will be home to a vibrant, thriving and sustainable community in a historic riverside setting. ■ Building for Life Award (2008) Royal Arsenal is already extremely well connected to London and beyond, with designated walking routes, cycle paths, a multitude of bus routes, and nearby overland train and DLR 33 stations. Royal Arsenal also has its own pier which is served by the Thames Clipper river boats. Building Greener Homes

A new energy centre at Royal Arsenal houses a gas fired combined heat and power (CHP) plant linked to a district heating network. This network provides heating and hot water to current residents of The Armouries and will be extended to supply those within The Warehouse No.1 Street, the latest phase under construction. This efficient method of energy supply is owned and operated by Scottish and Southern Energy who are the contracted ESCo. 300 homes to date have received post construction certification to Level 3 of the Code for Sustainable Homes and all remaining new homes (3,258 in number) will also achieve Level 3 at a minimum.

The average home in The Armouries improves on the requirements of Building Regulations Part L 2006 by 63%. Achieving our vision Building Greener Homes – Our vision for 2020 34

“ We will have completed our first zero carbon community and all of our new developments will be low or zero carbon. Our proven track record of delivering high quality, well-designed homes with low environmental impacts will make them desired by customers and will have expanded our market base. Homes built by The Berkeley Group are recognised throughout the industry as innovative and best practice.”

Our commitment – From May 2010 Our ambitions – From May 2012

Achieving environmental ■ All new homes to gain certification to Code Level 3 ■ All new homes to gain certification to Code Level 4 performance standards ■ Develop (or adopt) a standard equivalent to Code Level 4 to be applied to refurbishment schemes

Improving energy efficiency ■ Achieve at least a 25% improvement in energy ■ Achieve at least a 25% improvement in energy performance compared to 2006 Building Regulations performance compared to 2010 Building Regulations ■ At least 75% of completed units are supplied with energy from renewable or low carbon technologies

Adapting to climate change ■ Future climate change risks considered as part of ■ Adaptation measures in place on all developments development design and construction to address future climate change risks

Improving water efficiency ■ All new homes to achieve water use of 105l/p/d ■ Implement rainwater harvesting (a 30% reduction compared to average home water use) on all high-density schemes

Providing Green transport options ■ All sites situated within 1km of a public transport node ■ Predict annual transport-related carbon dioxide ■ Provide cycle storage on all sites emissions from our developments once they are completed and set reduction targets ■ Provide home office working facilities to all units

Reducing waste ■ Recycling facilities are provided for every home ■ Provide composting facilities on every scheme

Enhancing ecology and ■ Over 95% of development is on brownfield land ■ Install living roofs on all high-density schemes maximising land use ■ All sites employ an ecologist to provide advice and guidance on protecting ecology 35 Building Greener Homes

Summers Place, Billingshurst 36

Computer generated image of the proposed Central Square at Kidbrooke Village DELIVERING 37 SUSTAINABLE COMMUNITIES Our vision for 2020

“ We will continue to have a strong track In this section: record in creating developments which people choose as a place to live, work The Operating Environment and spend their leisure time. Our ability 2010 – 2020 to transform sites into thriving sustainable What are the current and future challenges communities will remain considered as and opportunities we face in the delivery of sector-leading. Through our ability both sustainable communities to engage and to deliver, we will continue 38 – 39 to be the developer of choice for local authorities and existing communities.” Our Achievements in 2009/10 What progress we have made in the past Communities Delivering Sustainable year to build sustainable communities

40 – 45

Achieving our Vision What commitments and ambitions we have put in place to ensure that we can achieve our vision for 2020

46 – 47 The operating environment 2010 – 2020

The success of new homes and developments is ultimately judged on whether they meet the needs, and improve the lives, of the people they affect. At every scheme we seek to create vibrant, balanced sustainable communities. Our role is to work with local communities to design and deliver a positive lasting legacy. Over the following two pages we explain some of the challenges that we foresee in delivering sustainable communities during the next ten years. Delivering the range of homes Addressing the needs What makes a people need of an ageing population community sustainable? By 2020 it is predicted that there will be a 12% increase in the By 2020 it is predicted that there will be more people aged 60 There are many things that can contribute to making number of households in England. There will also be a growth and over, changing the types of housing that people require as a community sustainable, often it is about balancing in the number of one-person households. By ensuring we well as changing their mobility needs. a range of factors to ensure that it meets local needs. provide a range of homes in terms of location, size and price, Sustainable communities should offer: we can help to address these changing needs. ■ High quality, well designed homes and 110 neighbourhoods that meet local needs ■ Safe and secure places to live and visit 100 30,000 ■ Access to a range of services and amenities, as 90 well as opportunities for employment and business 25,000 ■ Spaces that enable interaction between people 80 20,000 ■ Good environmental quality and efficiency 70 ■ Opportunities to access facilities to enhance 15,000 health and well-being 60 10,000 ■ A sense of identity 50 5,000 MALE FEMALE

Number of households (thousands) 40 0 30

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 400 200AGE 200 400 Number of people (thousands) ■ Married couple ■ Cohabiting couple 20 ■ Other multi-person ■ One person ■ 2010 average ages ■ 2020 average ages ■ Lone parent 10

Source: OCLG, 2009 Source: Office of National Statistics, 2010 0 Opportunities and Risks for our business As part of our extensive sustainability risk review undertaken in 2009/10, we 39 looked in detail at the opportunities and risks that the drivers opposite may present to our business. The key findings are outlined below:

Opportunities ■ Positive impact on local economy resulting in the Creating vibrant communities Working with communities to regeneration of the area ■ Enhancing the public realm to make the area more in previously deprived areas deliver neighbourhoods they want desirable to customers and local communities By 2020, a number of our large regeneration projects will still to live in ■ Providing superior product, with higher sales values be under construction. At projects such as Woodberry Down We already undertake extensive community consultation and ■ Development of mixed house type schemes to meet and Kidbrooke, we will need to transform these deprived areas engagement at our projects (as described on the following the needs of a wider consumer base into vibrant communities. pages). This is an issue which will remain important to ■ Winning awards to demonstrate leading performance ensure that we can understand local needs and deliver and superior quality the communities that people want to live in. Risks ■ Poor relationships with community organisations during the development process, leading to negative Communities Delivering Sustainable publicity ■ Increasing design standards to meet changing societal need, making some developments unviable ■ High proportion of affordable housing on a mixed- tenure development which makes the development less attractive to potential private purchasers

Risk Management Processes ■ Engaging with communities prior to development and throughout construction to build relationships and enhance reputation with planning authorities ■ Smart design solutions to meet customer demands and maximise value ■ Making sure that development design, management structures and marketing materials can manage any customer qualms Woodberry Down, Hackney Our achievements in 2009/10

Well-designed homes Engaging local communities Creating safe, healthy and communities We believe that our approach to sustainability, and our and inclusive communities commitment to stakeholder engagement enables faster Berkeley celebrates urban living and champions striking design There are a number of ways in which we can create safe, planning permissions and better designed schemes that meet and high quality construction that commits to sustainability. healthy and inclusive communities. In 2009/10 43% of the aspirations of the local community. We have Community Attention to detail and bespoke solutions remain at the heart the homes we built were designed to the principles of Engagement Guidelines which are used on all new projects and of our values and we pride ourselves on the high standard of Lifetime Homes – design standards that make a house more exceed statutory requirements. These allow us to enter into a design and construction at each of our developments. accessible and adaptable and allow it to be used throughout genuine dialogue with those who can affect or may be affected an occupant’s life. Many of our schemes were also built to the In the past year we have received numerous awards for our by our developments. We use a range of techniques including principles of Secured by Design. At a number of schemes we schemes, including Housebuilder of the Year at both the What newsletters, websites, telephone helplines, regular meetings have created new parks and open spaces including Beaufort House? Awards and the Building Awards. As the judges for the and community planning weekends. Park, The Hamptons, Imperial Wharf and Royal Arsenal. Building Awards commented: “business as usual for Berkeley We have many examples of where pro-active dialogue has At Woodberry Down we will be replacing a five-a-side football means a variety of things: developing exciting modern helped to deliver schemes which have supported local pitch that was due to be removed as part of the masterplan, architecture, such as the glass-fronted apartments at Imperial communities. For example, at our planned development at as it has been recognised that this is a key local amenity Wharf near Chelsea; carrying out complex conversions, West Kent Cold Store, we have attended monthly West Kent for young people and is well used by members of the local such as the 19th-century, Grade II-listed Sugar House on the Cold Store Community Forum meetings involving all key youth club. eastern edge of the City; and undertaking a prominent role local stakeholders, as well as holding numerous one-to-one in some of the most important urban regeneration schemes In the interests of social cohesion, our sites incorporate a meetings with neighbours, residents’ associations, ward and in the UK, such as the £1bn Kidbrooke redevelopment in range of housing choice and affordability. We are an industry parish councillors. A year-long exercise exercise resulted in a South-East London.” leader in providing affordable housing, and we offer varieties better local understanding of the scheme and allowed us to of tenure to suit all sections of the community including identify and address the key issues that the local community students, key workers and the elderly. For example, we had. Trust was established and we were able to turn long launched our discount market sale units at Imperial Wharf term objectors to supporters. The overwhelming community this year and despite the recession, local people queued support for the improved scheme was key in obtaining to purchase them. planning consent. 41

Employment opportunities Considerate Construction and job creation We seek to minimise disruption to local communities during Championing bespoke construction, and we sign all sites up to the voluntary Access to employment and job opportunities, as well as architecture and design: Considerate Constructors Scheme (CCS) which independently being part of a vibrant and successful local economy, is an audits site performance. Our CCS site audit scores have Grosvenor Waterside, London important part of ensuring the sustainability of a community. consistently exceeded the benchmark for all projects On our current schemes under construction, over 5,000 jobs Grosvenor Waterside, London, is a high quality urban registered with the scheme. Our average score in the are likely to be created on completion. mixed-use development that surrounds the Inner and Considerate Constructors Scheme is 35.3 compared Outer basins of the historic Grosvenor Dock on the edge On a number of schemes, we have actively worked with local to the industry average of 32.2. of the River Thames. businesses and communities to promote job opportunities. In 2009/10, we achieved a Gold Considerate Constructors For example, this year we held our third annual Jobs and Architectural style and quality has been at the heart Scheme Award for Imperial Wharf, London. The judges Careers Fair at Imperial Wharf to highlight the range of of the development design. A number of different made the following comment: “Good neighbourliness and employment and training opportunities available throughout architectural practices have been drawn upon to bring environmental care were keenly observed at this busy site. Hammersmith and Fulham. Nearly 200 people attended the creative individuality to the seven buildings within the Backed by regular newsletters and personal communications, Job Fair, which resulted in 119 positive outcomes (for example, development. Although architecturally distinct, the the site team supported the community with a free jazz interviews, work placements and job roles). buildings remain linked with some pairs of buildings festival, the staging of an art exhibition, and the raising being designed by the same practice to create a ‘brother At Woodberry Down we are working in conjunction with the local of £12,000 for the Goggles for Guide Dogs charity. and sister’ relationship. A sense of cohesiveness has Community Trust to promote employment opportunities on our These initiatives were complemented by a range of been further created by architectural references and development sites and we currently have four residents from the energy-saving measures, an excellent standard of staff narratives between the buildings, and through ensuring estate employed on the first construction phase. It is expected that that the surrounding area and its Grade II Listed welfare facilities, and a high score for safety observation. Communities Delivering Sustainable this number will grow as construction activity increases. The prominent position of this London site meant buildings have informed the character of the The Community Trust has also started a training scheme for that its high overall standards provided an excellent new buildings. local residents which we helped to set up through advice and impression of the modern construction industry.” guidance in the early stages to the provision of a hoarded site Five schemes were also awarded Silver Awards: with access to materials to allow the scheme to be of real Battersea Reach, Chelsea Bridge Wharf, benefit to local apprentices. Mayday House, Parkwest and Queen Mary’s Place. Leading by example – Building for Life The 20 Building for Life Standards 42

1 Provision of community facilities We have used examples from 1 IMPERIAL WHARF 2 STANMORE PLACE 2 Accommodation mix that reflects across all our developmentsts the needs of the local community to demonstrate how they 3 Tenure mix that reflects the needs meet each of the 20 of the local community Building for Life Standardss 4 Development easy to access by public transport – the most recognised 5 Reduced environmental impacts scheme for assessing Delivering great places to live: 6 Design specific to the scheme 20 questions you need to answer sustainable communities 7 Reflects existing buildings and in the UK. landscapes 8 Has a distinct character

9 Navigation around the development 8 HOLBOROUGH LAKES 9 GROSVENOR WATERSIDE is easily understood 10 Clear layout of streets and buildings 11 Roads do not dominate 12 Car parking well integrated so it does not dominate 13 Streets are pedestrian-cycle- and vehicle-friendly 14 Scheme integrates with existing paths and roads 15 Public realm is overlooked to give a sense of security 16 Well designed public space 15 PARK WEST 16 BEAUFORT PARK 17 Architectural quality 18 Well designed internal layouts 19 High quality, innovative construction 20 Buildings outperform minimum standards 43

3 KIDBROOKE VILLAGE 4 ST GEORGE WHARF 5 GROSVENOR WATERSIDE 6 KINGSWAY SQUARE 7 SUMMERS PLACE

10 QUEEN MARY’S PLACE 11 WORCESTER PARK 12 ROYAL ARSENAL 13 KNOWLE VILLAGE 14 ROYAL CLARENCE MARINA Communities Delivering Sustainable

17 TABARD SQUARE 18 GUNWHARF QUAYS 19 WEST 3 20 CASPIAN WHARF Berkeley is proud to currently hold the most Building for Life Standards in the sector Focus on: Building Sustainable Communities Richard Simmons, CABE 44

CABE is the Commission for Architecture and the Built Environment. It provides expert independent advice to improve the quality of what gets built in England. CABE also has a wider role to champion and lead the public and professional debate about how Q&Asto create great places. CABE, in partnership with the Home Builders Federation, runs Building for Life.

Can you explain a little more about Do you believe that good design can Berkeley is the first large housebuilder to commit to what Building for Life is? create sustainable communities? achieving Building for Life Silver on all developments – Building for Life started in 2001 and has become the national Not on its own. It’s the people that make a place sustainable. how significant is this commitment? standard for well-designed homes and neighbourhoods. But good design creates an essential context in which that can This is very significant and shrewd move by the Berkeley Building for Life promotes design excellence and celebrates happen. Creating sustainable residential areas is about much Group. Over the years Berkeley has delivered many exemplary best practice in the housebuilding industry. The standard more than just homes. It’s about creating public space where schemes from Gunwharf Quays and Royal Arsenal to City is based around 20 criteria set out in full on page 42 of this people can meet, a neighbourhood with jobs and services, and Quarter and Imperial Wharf. But what this new commitment report which embody a vision of functional, attractive and somewhere with room for sport and cultural activities. What demonstrates is that it is possible to deliver commercially sustainable housing. I like about Building for Life is the way it creates a consistent viable developments that are also well designed on all framework for developers and planners to talk about how you schemes, not just the exemplary ones. New housing developments are scored against the criteria to deliver these things through good design. assess the quality of their design. Building for Life standards are given to all entries to the Building for Life Awards that score more than 14/20. Schemes that score 14/20 or 15/20 receive the Silver Standard while schemes scoring 16/20 or more receive the Gold Standard.

Building for Life Awards are then given on an annual basis to exceptional projects 45 Communities Delivering Sustainable

Royal Clarence Marina, Portsmouth Harbour 46

Queen Mary’s Place, Roehampton Achieving our vision Delivering Sustainable Communities – Our vision for 2020 47 “ We will continue to have a strong track record in creating developments which people choose as a place to live, work and spend their leisure time. Our ability to transform sites into thriving sustainable communities will remain considered as sector-leading. Through our ability both to engage and to deliver, we will continue to be the developer of choice for local authorities and existing communities.”

Our commitment – From May 2010 Our ambitions – From May 2012

Well-designed homes ■ Achieve at least the Building for Life Silver Standard ■ Apply minimum design standards on all Berkeley and communities on all new developments homes which will include standards for sound insulation, space storage and ventilation ■ Use bespoke design on all developments to create high quality homes and places

Creating safe, healthy ■ C onsult with a Crime Prevention Design Advisor (CPDA) ■ Ensure all homes meet the Lifetime Homes Standards or Police Architectural Liaison Officer (ALO) and inclusive communities ■ All developments will be within a minimum distance from on all developments facilities that promote healthy lifestyles and well-being ■ Apply the Lifetime Homes principles on all new homes Communities Delivering Sustainable

Engaging local communities ■ Apply our best practice community consultation ■ Develop community engagement strategies on all guidelines on all planning applications over 500 units projects that will be under construction for over five years

Employment opportunities ■ All developments of 1,000 units or more will create ■ All developments will create an Employment Plan which and job creation an Employment Plan which includes targets for the includes targets for the proportion of local labour used, proportion of local labour used, plans for long-term job plans for long-term job creation and measurement of creation and measurement of the success of the plan the success of the plan implementation implementation

Considerate Construction ■ All sites register with the Considerable Constructors ■ Sites to achieve an average of 34 points in the Scheme and continue to achieve a minimum Considerate Constructors Scheme of 32 points 48

A new divisional office at Chelsea Bridge Wharf 49 RUNNING A SUSTAINABLE BUSINESS Our vision for 2020

“ Sustainability will remain fully integrated In this section: into our business strategy and operations. Our stakeholders will continue to view The Operating Environment us as the leader within the new homes 2010 – 2020 sector, as well as being one of the UK’s What are the key drivers, risks and most sustainable businesses. We will be opportunities facing us as we strive able to clearly demonstrate the value of to become one of the leading our sustainability strategy and will have sustainable businesses 50 – 51 continued to generate strong returns to our shareholders.” Our Achievements in 2009/10 What progress we have made in the past year to further embed sustainability in our business

52 – 59

Achieving our Vision What commitments and ambitions we

have put in place to ensure that we can Business Running a Sustainable achieve our vision for 2020

60 – 61 The operating environment 2010 – 2020

We believe that our success and Our business case achievements should be measured for Sustainability by the contribution we make The diagram below shows why we place sustainability at The The Business Business to both society and the environment, Case for Case for the heart of our operations and why it will continue to be Sustainability Sustainability as well as our financial performance. important for us to do so in order to achieve our 2020 vision. As a leading developer with a focus on urban regeneration, sustainability forms a natural part of our business operations

and a key contributor to the success of Our approach to Improving efficiency is a our business and the projects we deliver. sustainability helps us to key way to reduce costs. This chapter outlines why we believe that improve our reputation with This also aligns strongly stakeholders, making them with sustainability sustainability adds value to our business want to work with us and principles. We have already operations, and what we are doing for us. We can prove the seen the benefits of driving to be one of the UK’s most The strength of our commitment environmental efficiencies sustainable businesses. Business to stakeholders through throughout the business, Case for external awards and and we expect that the Sustainability certification, and we will pressure to drive such continue to do this to savings will only increase demonstrate our sector by 2020. leadership position. For example, the costs Ultimately, it benefits of disposing of waste to business performance by: landfill have been rising ■ Ensuring that we can steadily. If we were sending continue to attract the same amount of waste investment directly to landfill in 2013 as we did in 2009/10, this ■ Enabling us to secure would incur an estimated planning permissions and cost increase of 70%. local community support Therefore it is in our interest for our schemes to find alternatives to landfill ■ Helping us to recruit disposal, as well as maintain and retain talented and a focus on reducing the committed employees amount of waste produced.

■ Driving customer demand for our homes Opportunities and Risks for our business As part of our extensive sustainability risk review undertaken in 2009/10, we looked in detail at the opportunities and risks that 51 the drivers opposite may present to our business. The key findings are outlined below:

Opportunities The The The Business Business Business Case for Case for Case for Sustainability Sustainability Sustainability ■ Reduced long-term costs due to efficiency in utility use and waste management ■ Attracting a highly skilled workforce based upon reputation as an employer that values health & safety ■ Enhanced reputation due to demonstration of sustainable operations ■ Differentiate the organisation based on a sustainable approach to business ■ Work with suppliers to create bespoke products to meet sustainability In each section of this We believe that our The past five years have design requirements report we have provided sustainability strategy seen an unprecedented detailed information on plays a role in our amount of legislation the key sustainability consistently strong financial impacting the homebuilding Risks opportunities and risks performance, enabling us to sector. We believe that faced by our business, respond to current market our sustainability strategy ■ Participation in the CRC Energy Efficiency Scheme has impacts on cash flow, administrative burden and regulatory risk including those provided expectations, and helping helps us respond to existing to the right of this page us to adapt and prepare for legislation in the most ■ Increased utility and waste costs increases operational costs future changes. effective way and prepare ■ Skills shortages within the industry to deliver sustainable homes We have also provided for future legislation. ■ Poor health & safety on site leads to a site worker accident information on the risk Our strategy and management processes we commitment to creating the An example of legislation have in place to manage sustainable communities that is already impacting Risk Management Processes these risks. A full list of the our customers demand, Berkeley is the CRC Energy principal operating risks has given us a significant Efficiency Scheme (“CRC”). ■ Pre-planning for participation in the CRC Energy Efficiency Scheme enabling an understanding of costs; robust data collection systems faced by our business is also competitive advantage The CRC is a mandatory in place to enable compliance provided within our Annual over our peers, even during emissions trading scheme Report and Accounts. the economic downturn. that began in the UK in April ■ Measure utility use and waste production; communicate measures that can be taken to reduce use; invest in technologies that improve performance We believe that this will 2010. We will qualify for We believe that our forward continue to be the case over inclusion in the first round ■ Training of site operatives on sustainability; working with supply chain to deliver looking, sector-leading the coming years. of the CRC Energy Efficiency standards required approach to sustainability ■ Extensive health & safety management systems, training for all site employees

Scheme, which will run Business Running a Sustainable helps us to manage until 2013. and sub-contractors, measurement of performance risks and capitalise on opportunities. Our achievements in 2009/10

52 Financial performance Berkeley’s results for the year ended 30 April 2010 reflect a period of trading which has been stronger than industry observers anticipated this time last year. Transaction levels stabilised over the year and are broadly 40% below what was the historic average. This is a level commensurate with the re-sizing of the business undertaken over the course of the previous 12 months. Pricing has been resilient for a well-located product that is right for the local market and built to a high quality, and cancellation rates are back at normal levels. Demand from equity-rich investors and those from overseas who are aided by the weakness of sterling has been strong, while the UK domestic market continues to be constrained by a combination of uncertainty (economic and political) and the more prudent lending criteria of banks and building societies.

Maintaining our operating margin above 17% is a result of Berkeley’s strategy where land buying is highly selective – driven by opportunity not volume – and where Berkeley has the time and expertise to add value to its land holdings. In this period we have agreed to acquire some 2,200 plots across 20 sites, all in excellent locations in our operating area of London and the South East where underlying demand is strong, including Belgravia, Battersea, Putney, Ascot and Wimbledon. We have also secured new or revised planning consents on 38 of our sites. This further strengthens the quality of our owned land bank and underpins supply for the next three years.

With its strong balance sheet, Berkeley is in a great position to react quickly to the opportunities in the market as visibility improves once the impact of the change in Government is assessed by companies and individuals. Essentially, Berkeley has three investment choices. These are: acquiring new land; investing in work in progress; and returning cash to shareholders through dividends or share buy-backs. In this financially constrained environment, we are confident that we will find the right balance to maximise shareholder returns over the long-term.

For more detail on our financial performance and also our corporate governance arrangements please refer to our Annual Report and Accounts.

Rob Perrins, Managing Director presenting to Analysts in the City Communicating our performance to investors 53 Management Today awards NextGeneration corporate benchmark We were ranked 1st in the Home Construction sector in Britain’s We were delighted in 2009 to be named as the leader of the NextGeneration benchmark Most Admired Companies 2009, the UK’s longest running and most for the third year running. NextGeneration is a ranking of the top 25 homebuilders based respected business award scheme organised by Management Today, on their sustainability performance. in Association with Birmingham City Business School. Our strong The 2009 benchmark ranked companies for their corporate approach, and our win performance saw us ranked 11 points ahead of our nearest recognises our leading efforts to integrate the principles of sustainability into our sector peer. core business. Companies were assessed against a set of criteria including strategy, The Berkeley Group was also the only company from governance and risk management and any track record and future targets in relation the housebuilding and development industry to rank to environmental and social impacts. in the top 100 places, 21st place overall. For more information about our success in NextGeneration, and how we performed in relation to our peers in the 2009 Corporate FTSE4GOOD Benchmark, please visit our website or the NextGeneration website: We are delighted to have maintained our listing in the FTSE4Good www.nextgeneration-initiative.co.uk index, which we have been listed in since 2002.

FTSE4Good measures the performance of companies that meet NextGeneration benchmark 2009 globally recognised corporate responsibility standards, and facilitates investment in those companies. Inclusion criteria covering THE BERKELEY GROUP a range of issues including environmental management, climate CREST NICHOLSON MILLER change and human and labour rights are reviewed on a regular basis INSPACE to ensure that companies can meet increasing investor expectations BARRATT DEVELOPMENTS on sustainability practices. For more information see: www.ftse.com CROSBY LEND LEASE GALLIFORD TRY COUNTRYSIDE PROPERTIES Carbon Disclosure Project (CDP) REDROW KEEPMOAT LIMITED We received the fourth highest score of the FTSE350 companies McCARTHY & STONE in the consumer discretionary sector of the CDP, and considerably PERSIMMON BELLWAY outperformed all other UK homebuilders. This stands us apart as BOVIS one of the most transparent global reporters. KIER RESIDENTIAL CALA GROUP The Carbon Disclosure Project is a programme of voluntary GLADEDALE HOLDINGS disclosure whereby organisations can publicly report greenhouse

GLEESON HOMES Business Running a Sustainable LOVELL gas emissions. For more information about the Carbon Disclosure BLOOR HOLDINGS Project, including access to our submission, please see: MORRIS HOMES www.cdproject.net ANTLER HOMES FAIRVIEW McCARTHY & STONE STEWART MILNE Quality of reporting & evidence of practice Overall score 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Our achievements in 2009/10 (continued)

54 Our employees Our workforce Training and development As a residential developer, our business is run from a number At 30 April 2010 we had 838 direct employees. Of these, 515 All staff have access to a range of training courses, which of regional offices as well as our construction sites. Each and are based in our nine offices in London and the South East of includes health & safety, sales and marketing. New staff are every one of our staff and site workers is key to the success England and the remaining staff work on our 61 construction provided with a detailed induction programme, which includes of our business and we are grateful to all our employees and sites. Of our directly employed workforce, 32% are female. information on our sustainability strategy. A further 4,050 site workers are also employed indirectly sub-contractors for their commitment and continued passion We also provide a range of sustainability training programmes through contractors and sub-contractors. More details on how during this past year. targeted at specific roles. This includes waste management we work with our sub-contractors can be found on page 58. We are fully committed to championing sustainability training for site managers and customer focused sustainability throughout our operations, both at an office level and training for sales and marketing staff. on our sites. The following pages illustrate some of In 2009/10, 774 days of training were provided to our Directly employed the ways in which we are doing this. employees. We were also delighted to open a new training centre in our Berkeley office at Chelsea Bridge Wharf, at Indirectly employed which we expect many staff and subcontractors to receive training in 2010/11.

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Number of people employed

■ Full time directly employed ■ Part time directly employed ■ Contractors and sub-contractors Creating opportunities for graduates Promoting sustainability Our graduate scheme recruited 17 young people into our land, in our offices commercial, technical and construction business functions. In all our offices, employees have been provided with The graduate scheme offers an excellent opportunity for new information on initiatives being undertaken and how to recruits to progress quickly towards management positions use facilities provided in their offices. All our offices have within the company. sustainability champions in place to coordinate and promote activities and to answer questions. We have had great successes with our graduate scheme to date, with three of our Directors having started as graduates. In 2009/10 we launched a quarterly newsletter for staff highlighting key sustainability initiatives being undertaken within the Group, as well as information on steps everyone can take to enhance their own sustainability activities. We also regularly provide more detailed briefing to staff on key pieces of legislation and initiatives so that we can ensure that all staff are aware of their role in the delivery of our strategy. Focus on: Running a sustainable business – a view from our staff 55 Joanne Hope St George

Joanne Hope is a PA to one of the Managing Directors of St George. She has been working for Berkeley for ten years. Q&AsWhat is an average day for you? What do you think has been your biggest success Fortunately my job is so varied that I don’t really have as a “Green Office Champion”? an average day, but generally it will include assisting the One of the first initiatives I got involved in when I was Managing Director, managing office maintenance, resolving nominated as the Green Office Champion was to apply, on office issues as well as dealing with the many ad hoc and behalf of St George West London, for the Local Authority unusual requests and queries that arise during a working day. Go Green Merit Award, which we went on to win. Further involvement with this scheme resulted in an energy survey What do you most enjoy about working for Berkeley? being conducted in the office which highlighted some quick The working environment is fantastic; I am lucky to work win actions we could take. Following this advice, we initially in such a well-appointed and pleasant office, in lovely Clipper Challenge 2009 reduced our electricity consumption by 10% over two surroundings. The flexibility to work autonomously is wonderful consecutive months for the office as a whole. That success and encourages me to think ‘outside of the box’, particularly has been the springboard for further initiatives which I have in respect of Office Management and Sustainability issues. Community investment successfully introduced into the office. These have all been and charitable giving You are a “Green Office Champion” – how did you get embraced positively by my colleagues, which has always As some of our projects take many years to complete, involved in this and what does that role entail? been my ultimate goal. Their participation and interest we become involved at grassroots level in numerous Initially I was approached because of my involvement with during Green Office Week at the end of April, for which I community initiatives. recycling in the office, and this grew into a larger role as a was a National Ambassador, was an illustration of how enthusiastically the Green message has been adopted For example, Ian Dobie, Managing Director, St Green Office Champion. The role entails raising awareness of George is the Chair of Trustees of the Brentford green issues and inspiring enthusiasm for this by all staff, as within the office. well as ensuring that the Green Office Management Policy is FC Community Sports Trust which was formed in I am also very excited about a trial we are starting in August 2009. St George has been involved with the Football being implemented. In the last year I have also been invited to 2010 of a hot water and cold water worktop system in our Community Scheme since 2001 and has been integral join the Environmental Governance team which has broadened kitchens, which should reduce our energy consumption, to the growth of the project. The Trust is now offering my knowledge of sustainability issues, particularly within the

improve the quality of our beverages and most importantly Business Running a Sustainable professional coaching opportunities for 27 different Group as a whole. sports to over 27,000 children. save several hundred hours spent each year making teas and coffees for meetings and colleagues. Watch this space! In many other areas our staff are on the board of Governors at schools near our developments, and we also support many other local charitable and community initiatives. In 2009/10 Berkeley made charitable donations of £239,000. Our achievements in 2009/10 (continued)

56 Creating safe and healthy places to work We are committed to making our sites the safest in the industry, and are delighted that our accident rate remains one of the lowest in the sector.

Achieving the highest How we create safe work places: standards of health & safety Good Order and Good Work Campaigns In the past year, we recorded the lowest number of We have implemented two campaigns to help drive RIDDOR injury incidents that has ever been recorded high health & safety standards on our sites. ‘Good across the Group at 14, one less than 2008/09. Our Order’ and ‘Good Work’ tackle the two key causes of accident incident rate (AIR) of 3.83 is equal to the best on accidents which are the working environment and the record and our accident frequency rate (AFR) of 0.18 is behaviour of workers. ‘Good Order’ was introduced in deemed to be ‘world class’. 2008/09, and ‘Good Work’ has been introduced over the past year. This year we have held eight ‘Good Work’ External recognition for our strong health & safety workshops involving 120 of Berkeley’s key staff. The performance includes 13 ROSPA Gold Awards our detailed strategy for training all other relevant Berkeley strongest ever performance in these awards. In the recently staff is now agreed and training has been taking place announced NHBC National Health & Safety awards, during 2010/11. The sessions for our Contractors will Berkeley was the most successful homebuilder winning be taking place after the summer holiday period in two of the six national awards along with two Highly September/October 2010. Commended and two Commended sites. The two national awards were the National Award for Leadership for Karl Whiteman; Director responsible for Health & Safety, and the In order to monitor compliance with these campaigns, National Best Large Site Award for Slade Park in Oxford. and to ensure their effective implementation our Health & Safety team audits our sites against ‘Good Order’ In addition to our Good Order and Good Work campaigns, Good Work intends to take us GOOD WORK INT and ‘Good Work’ criteria. In 2009/10 our overall RODUCTIO N CA beyond the safety plateau byy RD formal Group level ‘Peer Review’ visits were introduced average scores were 94, compared to our target of 80. influencing the choices and in 2009/10 and over the period 37 Peer Review days We believe that these campaigns have played a key role behaviour of individuals. were undertaken. These visits are considered key in in reducing accidents across our sites. demonstrating the Group’s health & safety governance of its operations. The Goal – 100% safety 100% 2009/10 3.8 The safety plateau 2008/9 3.9 Improved systems, procedures 2007/8 3.8 and safety standards 2006/7 7.2 2005/6 4.5

Injury Incident Rate (RIDDOR) per 1,000 employees Safety Performance and sub contractors Time Focus on: Running a sustainable business – a view from our staff 57

Darren Smith is a Senior Site Manager at our Slade Park Development in Oxford, where he has worked for Q&AsBerkeley for just under a year. He has worked in the construction industry for 26 years, 15 spent as a site manager.

You recently received an NHBC Health & Safety award for Best National Site – what do you think won you the award? I think we won the award on the basis of a number of things that we have put in place on the site to ensure the health & safety of all site workers. We have a ‘Good Order’ campaign in place on the site which is driven from a Group level. It is supported by lots of posters and notices on the site to ensure that everyone knows to “see it, sort it or report it”. As well as this, on our site, we score each of our contractors on a weekly basis against the criteria and display this on a Good Order board outside the site welfare facilities. This promotes good site practices and a little healthy competition between subcontractors as well!

We are also using modular construction techniques to erect the development, and we have in place very robust scaffolding structures to reduce falls from height and other accidents (including staircases instead of ladders on the outside). Finally, I think that they were impressed by how proactive we are in ensuring a clean and safe site.

How do you think Berkeley’s performance compares to other housebuilders? Berkeley is in a league of its own! I have worked for three other housebuilders, but none have been as good as Berkeley at ensuring high standards on their sites, both in terms of health & safety but also on environmental issues. Business Running a Sustainable Our achievements in 2009/10 (continued)

58 Driving environmental efficiencies

Effective waste management Driving sustainability through Managing water use During 2009/10, we recycled 300,000 tonnes of construction our supply chain In 2009/10 our water use in sites and offices increased by waste. We achieved our target of reducing waste sent direct to 10%. We believe that the primary reason for this is increased The Group works with over 4,000 suppliers and contractors. landfill by 50% against our 2007/08 baseline, a reduction of data provision from our sites and increased metering, both of The value of our supply chain is in excess of £450 million. 1,286 tonnes. We also reduced the total amount of waste sent which mean that our data is more accurate than in previous Our supply chain therefore plays a crucial role in our ability to landfill (directly and indirectly) by 19% compared to our years. The increase is also a reflection of the more water- to deliver our sustainability objectives. 2007/08 baseline. intensive processes that have been taking place on our sites in In the past year, we have undertaken a number of initiatives the past year – we have started work on a number of projects We have driven these reductions through a range of measures to drive sustainability through our supply chain. For example, and require more water during demolition and groundworks including site waste management plans, training, better site at our scheme in Holborough, Kent, we have been trialing than during construction. The photo below shows how we use signage and trialing new management methods such as the the use of Material Logistics Planning to reduce construction water to suppress dust and reduce air pollution during the material logistics plans described right. waste. Measures that proved particularly effective were: demolition of a building. ■ Agreeing a waste forecast with plasterboard suppliers, Despite overall water consumption increasing, we are proud and providing incentives if performance was better of some of the achievements made. For example, since ■ Ensuring that a stack of reusable pallets were on site November 2008 we have been progressively refurbishing 2009/10 the kitchens and bathrooms at our head office in Cobham. ■ Reusing brick and block waste in preparing the ground 2008/9 Several measures have been implemented to reduce water in future phases 2007/8 use from these parts of the office including the installation of ■ Controlling deliveries to reduce the amount of stock 0 1,000 2,000 3,000 5,000 dual flush toilets and low water use urinals. These have been held on site Tonnes of waste generated very successful and water use has dropped by nearly half in This resulted in a reduction in waste being generated 2009/10 compared to 2008/09. Going forward we will report ■ Recycled (following on-site segregation) compared to the Building Research Establishment’s progress separately for sites and offices to enable a better ■ Material Recovery Facility (then sent to be recycled) industry benchmark. comparison of performance over time. ■ Landfill (Non-hazardous) For more detailed information on how we are working with ■ Material Recovery Facility (then sent to landfill) our supply chain and to view our Sustainable Procurement ■ Hazardous waste treatment facility and Timber Policies, please see our website. Our achievements in 2009/10 (continued)

59 Reducing the carbon footprint of all our operations We are delighted that over the past year we have reduced the carbon emissions of our operations by 22%. This reduction was achieved for a number of reasons:

■ Significant reduction in CO2 emissions associated with our car fleet ■ Reduction in energy intensive activities on sites ■ More effective management of performance at a site and office level, assisted by improved data collection ■ Continued implementation of awareness-raising with staff ■ Increased efficiency through a range of initiatives in our offices A number of specific ways in which we have reduced our Driving efficiency on our sites Reducing energy use in our offices carbon emissions across our sites and our offices are set We have been undertaking a number of measures to reduce In the past year we have reduced energy use in our 9 offices out under the following two headings. energy use at our sites. For example, at our site in North by 7% (85 tonnes of CO2). For example at St George’s head Bersted we are trialing the use of Eco-Cabins which feature office we have reduced carbon emissions by 10% through a 2009/10 energy and water saving technologies, such as PIR lighting and range of simple measures, and the move of Berkeley Homes urinals, heating timers and high thermal efficiency. (Urban Renaissance) from a temporary cabin to a permanent 2008/9 office in our Chelsea Bridge Wharf development has seen 2007/8 These Eco-Cabins cost approximately 10% more to hire energy bills fall by nearly 40%. The refurbishment of our head than a traditional cabin, but efficiency savings over the life 2006/7 office in Cobham has also included a number of energy saving of the project are anticipated to far outweigh the initial 0 2,000 4,000 6,000 8,000 10,000 12,000 measures including PIR sensors. additional costs. Tonnes of carbon dioxide(CO2)

■ Electricity usage (sites and offices) Business Running a Sustainable ■ Gas usage (sites and offices) ■ Diesel usage (sites and offices and business travel) ■ Petrol usage (sites and offices and business travel) ■ Fuel usage (air travel) Achieving our vision Running a sustainable business 60 – Our vision for 2020

“ Sustainability will remain fully integrated into our business strategy and operations. Our stakeholders will continue to view us as the leader within the new homes sector, as well as being one of the UK’s most sustainable businesses. We will be able to clearly demonstrate the value of our sustainability strategy and will have continued to generate strong returns to our shareholders.”

The Paddocks, West Sussex Our commitment – From May 2010 Our ambitions – From May 2012

Improving operational ■ Reduce annual carbon dioxide emissions ■ Put in place new sector leading operational energy, by 5% until April 2012 water and waste reduction or stabilisation targets environmental efficiency ■ Reduce annual water consumption by 5% until April 2012 ■ Measure carbon emissions associated with ■ Reuse or recycle over 80% of construction, excavation commercial transport movements to and from sites and demolition waste 61

Managing and preventing pollution ■ Undertake internal environmental audits on all ■ Gain IS014001 certification for all construction construction sites operations Valuing our employees ■ All employees receive sustainability training ■ Undertake employee engagement surveys and develop ■ Measure staff retention rates and benchmark action plans to address any issues raised performance ■ Have personal development plans in place for all staff

Working with charities ■ Capture and quantify our work with charities and local ■ Achieve the Business in the Community Mark communities and benchmark performance ■ Match charitable fundraising by employees and local communities ■ Implement a Give as You Earn Scheme

Driving sustainability ■ Communicate our sustainability aspirations and ■ Carry out audits of at least 25% of our suppliers to ensure requirements to suppliers through our Sustainable compliance with our Sustainable Procurement Policy through our supply chain Procurement Policy ■ Only use certiﬁ ed timber and timber based products ■ Sustainability requirements integrated into supplier contracts and management rules

Being a sector leader ■ Share our experiences with Government and the rest of ■ Measure the costs and benefits of sustainability the industry through representation at steering groups initiatives so that we can demonstrate the value and events of our approach to stakeholders Reducing workplace accidents ■ Continue to achieve a RIDDOR reportable Accident ■ Achieve a RIDDOR reportable Accident Incident Rate Incident Rate (AIR) of less than 4 incidents per 1,000 (AIR) of less than 3.5 incidents per 1,000 employees employees and sub-contractors and sub-contractors ■ Continue to achieve a RIDDOR reportable ■ Achieve a RIDDOR reportable Accident Frequency Rate Accident Frequency Rate (AFR) of less than 0.20 (AFR) of less than 0.175

Health & safety training ■ All direct employees receive Health & Safety training ■ All direct employees to be the subject of an individual Health & Safety training assessment and training to be provided based in their individual need

Health and wellbeing ■ Undertake an internal review of our policy and ■ Make available a health & wellbeing programme arrangements regarding employees health & wellbeing to all employees with a view to establishing a programme Measuring performance ■ Undertake work to identify an external benchmarking ■ Participate in an external benchmarking programme and programme (e.g. CHASPI) to positively measure the report at least annually Group’s Health & Safety performance ■ Gain OHSAS 18001 certification for 20% of construction Business Running a Sustainable ■ Undertake internal Health & Safety audits on all operations (trial before Group wide roll out) construction sites

Behavioural safety ■ Further enhance the Group’s ‘Good Work’ programme ■ Set a performance target for our projects and through active engagement with Contractor’s contractors in respect to the ‘Good Work’ programme management and operatives 62

Holborough Lakes, Kent Governance of our vision

We have had robust management structures in place to implement our strategy Setting out our vision, ambitions and commitments is only the first step on our journey – the most challenging step – to for many years and these will continue to guide the execution of our vision over achieve what we have set out to do relies on the commitment the coming years. We are also delighted at the establishment of the Board level of the whole business. We believe that leadership in Sustainability/Health & Safety Committee – which replaces our Sustainability sustainability must be driven not only by the highest levels of management, but embedded in the day-to-day work of Governance Committee and Health & Safety Governance Committee. our staff and site operatives.

Sustainability/Health Sustainability Sustainability Working Groups & Safety Committee Working Group in our Divisions In order to ensure the Sustainability Working All the Divisions have their own effective governance and Group (SWG) meetings are sustainability working groups, which implementation of the held once a quarter and meet at least quarterly. These working Vision 2020, a Board level Guidance comprise Directors and Guidance groups enable the Group’s vision to be Sustainability/Health & and senior managers and disseminated within the Divisions, and Safety Committee has leadership from across the Group. leadership ensure that they are implementing the on the on the been established, which is vision The SWG will be used to vision Group’s strategy at an operational level. chaired by John Armitt, our review progress towards These all report to the Group SWG. Non-executive Director. The the vision, as well as a Committee meets twice a forum to discuss how year, and its primary role sustainability is being is to agree the direction of Update implemented across the Update on progress on progress the Health & Safety and towards vision business. The SWG is towards vision Sustainability strategy for at every supported by external at every Board Board the Group. Meeting consultants, and third Meeting party experts are invited where deemed necessary.

Karl Whiteman Sustainability/Health & Safety Committee member and John Armitt Chair of the Sustainability Chair of Sustainability/ Working Group and Chair of the Health & Safety Committee Health & Safety Working Group Summary of 2009/10 Performance

The table below provides a summary against a number of Key Performance Indicators for each of our key areas. Full details of our performance, including a summary of performance against the Global Reporting Initiative (GRI) Guidelines can be found on our website.

KEY PERFORMANCE INDICATORS 2006 2007 2008 2009 2010

THE CUSTOMER EXPERIENCE Average customer satisfaction 90 90 89 91 93

BUILDING GREENER HOMES Percentage of completed homes certified using an environmental performance methodology 38% 43% 48% 37% 64% Percentage of completed homes on brownfield land 100% 100% 100% 100% 100% Percentage of sites where 80% of the development is located within 500m of a transport node – 92% 94% 95% 91%

DELIVERING SUSTAINABLE COMMUNITIES Percentage of sites registered under the Considerate Constructors Scheme (CCS) 95% 98% 100% 100% 99% Average score in the Considerate Constructors Scheme – – 34.1 34.5 35.3

RUNNING A SUSTAINABLE BUSINESS Average number of employees during 2009/10 766 865 996 836 748 Percentage of direct employees that are female 32% 36% 36% 34% 32% RIDDOR Rate per 1,000 employees (Client and principal contractor sites) 4.5 7.2 3.8 3.9 3.8

Total CO2 emissions by weight (tonnes CO2/yr)* – 10,870 8,927 8,165 6,328 Number of health & safety and environmental prosecutions 0 0 0 0 0

* This covers all greenhouse gas emmissions in line with the Greenhouse Gas Protocol Summary of progress against 2009/10 targets

A summary of our progress towards our 2009/10 targets as set in our 2008/09 Sustainability Report is provided below. Full details of performance can be found on our website. FULLY ACHIEVE D ACHIEVE FULLY ACHIEVED PARTLY ACHIEVED NOT D ACHIEVE FULLY ACHIEVED PARTLY ACHIEVED NOT

Maintain listing in FTSE4Good • Implement the actions identified in the recently published Sustainable • Supply Chain Action Plan across the Group Maintain a leading position in the NextGeneration benchmarking initiative • Trial Material Logistics Plans on one site and share lessons learnt across the Group Ensure that all sites seeking planning permission continue to commit to • • certifying all new homes to Code Level 3 (excluding refurbishments) Undertake a six month programme of post occupancy monitoring of • energy on one site Ensure that all sites seeking planning permission continue to commit to certifying • all commercial space to BREEAM Very Good, specifically seeking a 25% improvement Undertake work to identify the key risks and opportunities posed to The above Building Regulations for energy performance (excluding refurbishments) Berkeley Group by climate change and other sustainability impacts, including • Achieve a 5% year-on-year reduction in CO emissions until 2012 (associated with their likelihood and their potential financial and non-financial significance 2 • our offices and sites) from May 2008 baseline Use The Berkeley Group’s leadership position in its approach to sustainability to work with national and regional Government to help influence the direction Reduce our direct water consumption (associated with our offices and sites) • • of future policy within the sector by 5% annually until 2012, from May 2008 baseline Develop a more accurate and consistent methodology to capture the number Ensure that 95% of completed development is on brownfield land • of training days per employee with a view to developing a benchmark and Reduce by 50% construction waste sent directly to landfill by 2010 based • • setting a performance target for next year on a 2007/08 baseline Maintain average score in the Considerate Constructors Scheme above Produce a quarterly sustainability newsletter, to provide all staff with updates • • 32 for all participating sites on internal and external sustainability issues Maintain reportable accident rate at or below the All Builder Average • Undertake a detailed review of the sustainability section of the website to understand • how this can be updated to reflect good and best practice Roll out the enhanced ‘Good Order’ initiative and new ‘Good Work’ campaign • Maintain an average site ‘Good Work’ score at 80 or above Continue to work with our managing agents to raise their awareness of sustainability issues, • • and to understand how our own approach may facilitate sustainable estate management Maintain an average site ‘Good Order’ score at 80 or above • Undertake an assessment of the local and regional socio-economic benefits of one • Maintain an average site overall score (‘Good Order’, ‘Good Work’ and • project, with a view to developing a methodology which could be applied to other General Items) at 80 or above projects in the future Ensure 90% of Site Managers have completed the SMSTS within 3 months • 66

The Armouries at Royal Arsenal Riverside Upstream Sustainability Services – Jones Lang LaSalle 67

For Berkeley’s 2010 Sustainability Report, Upstream Sustainability Services, Jones Lang LaSalle has been involved Performance in 2009/10 Advisor’s Review in the following ways – providing assistance on achieving The Group has remained committed to its sector-leading The launch of Vision 2020 represents a significant and forward Global Reporting Initiative Level B; analysing data for the sustainability strategy, and this is evidenced in numerous case looking approach by the Group, and the set of commitments performance indicators; and providing advice on the content studies and performance data in the report. Highlights that and ambitions outlined within the report will help Berkeley of the Vision 2020. merit a specific mention include: move towards its ambition of being one of the UK’s most Jones Lang LaSalle has been working with Berkeley as its sustainable businesses. Most significantly, the vision considers ■ Commitment of over 17,000 homes to Code Level 3, and strategic sustainability advisors since 2002, and provides a the delivery of the first completed units to this standard. not only the management of environmental impacts which range of consultancy advice to help Berkeley both set and This represents a significant investment by the Group, have dominated the sustainability agenda over the past few achieve its sustainability objectives. This statement does not and continues to be an industry leading commitment years, but wider socio-economic impacts. In this regard, the therefore represent a fully independent viewpoint and does not commitment to achieving the Building for Life Silver Standard provide independent verification of the report contents. The ■ The achievement of a world class health & safety record. on all developments is an important step by the Group, following statement may instead be understood as an external Only 14 RIDDOR injury incidents occurred during the and recognises the role good design plays in the delivery objective opinion on The Berkeley Group’s progress in terms year, the lowest number ever recorded for the Group, of sustainable communities. of sustainability and its management and performance in demonstrating the value of Berkeley’s strong leadership Against the backdrop of continued success and the launch relation to its key impacts over the past year. During the past and investment in health & safety of an ambitious new sustainability strategy, a number of year we undertook an audit on behalf of Berkeley to verify ■ Achievement of a range of industry awards demonstrating challenges remain that Berkeley must address if it is to performance against a selection of the targets and KPIs. external validation and verification of the Group’s approach ensure that it can capitalise on the opportunities its proactive This audit showed that Berkeley has good processes and to sustainability approach represents: procedures in place, as well as good awareness from site ■ and office staff about their roles in the delivery of the The establishment of a Board level Sustainability/Health & ■ Quantification of the value of sustainability to the business. Safety Committee chaired by a Non-executive Director which sustainability strategy. The Group is now in a position to better understand the will continue to ensure that the sustainability strategy is costs and benefits of its sustainability commitments, integrated within, and adds value to, the business and should seek to quantify these so that it can drive efficiencies, target resources correctly, and ensure that its approach is adding value to the business ■ Ensuring that Berkeley understands the implications of changing legislation and continues to remain engaged in industry working groups to inform policy making. This cooperation is essential in order to guide future policy, insofar as possible, in a direction that ensures it is realistic for the industry, whilst fully addressing sustainability, affordability and issues of supply A range of varied and stretching commitments set the context for the delivery of the Group’s Vision over the next two years, and we are confident that an equally impressive period of performance lies ahead.

Nina Jackson, Associate Director Upstream Sustainability Services, Jones Lang LaSalle The Berkeley Group Holdings plc Berkeley House 19 Portsmouth Road Cobham Surrey KT11 1JG UK

Telephone +44 (0)1932 868555 Facsimile +44(0)1932 868 667 Website www.berkeleygroup.co.uk

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