J.M. Bygg Construction, Sweden

A Natural Step Network Case Study

Overview
JM Bygg AB is a Swedish-headquartered, international construction company founded in 1945 by building contractor John Mattson. The company is publicly traded on the Stockholm Stock Exchange. Its largest shareholder is Skanska, another large construction company, which owns 56 percent of JM's stock. JM is both a builder and property manager. Residential units represent 60-70 percent of company sales; commercial buildings, 30 percent. Construction revenue is $500 million per year while real estate holdings are approximately $1 billion in value. The company has 2500 employees.

Why TNS?
In the early 1990s the company board felt that environmental issues were growing as an important business issue. One issue in particular had been a well publicized case of "sickbuilding" syndrome in Sweden where a number of people had become ill from materials used to construct the buildings. It cost the companies involved millions of dollars to repair the buildings. JM didn't want the same thing to happen to it. JM decided it wanted to be the first construction company to take these issues head on and felt there was little PR or market value in being second. Managers liked the Natural Step because it wasn't so extreme and was understandable by business people. They made the decision in 1994 to begin using the Natural Step to guide their environmental efforts. The process began with the creation and formal adoption of a JM environmental policy by the Board of Directors.

Introduction of The Natural Step
Initially, information on The Natural Step was presented to 200 JM employees and 150 major customers. Next a group of JM employees was trained as Natural Step instructors. Afterwards all JM employees were then trained over a six-month period from late 1994 to early 1995. As part of this training an environmental handbook titled, "A Guide For Environmentally Adapted and Sound House Construction," was developed and was internally distributed to all JM  managers.

At the same time, JM began requesting information from its suppliers on the materials that it was using. This was done for two reasons. One was to develop a database of products that would be acceptable or not acceptable. Today its database lists over 700 items in three categories: acceptable, not acceptable, and interim (until a better substitute is found).

The second use of the information was to prepare a materials description document listing the materials used in a project's construction just like a food manufacturer lists the ingredients in its product. The materials description is provided in a notebook that is handed to the customer on moving in. The materials description relates to both the health-related and nature-cycle aspects of the project. In 1995 the training material and database were made available on the company's computer network.

Outcomes
JM has a pilot project underway in southern Stockholm, where 88 condominiums are being built according to the TNS concepts. As optional features, residents may choose among their own garden plots, compost units, or free-standing earth cellars for food storage. Water from rain and melted ice and snow is handled on the grounds of each individual dwelling. The area will be completely automobile-free.

The company uses natural materials such as wood, not plastics, and has made a strenuous effort to use material that won't cause allergies. Eighty percent of materials are ordinary. Only 20 percent are special. Buildings are built with a 100-year life in mind. Walls have five inches of concrete, then an eight-inch thickness of insulation with an outer plaster covering. Windows have three panes of glass with gas between one set.

This project was built on land that the local city provided on long-term lease. The market for these condos is middle-income people who can't or won't pay a premium. The environmental factors were added to give JM a competitive advantage in securing the land (three other developers had failed) and attracting buyers.

The building materials JM has selected have been matched against its database and scrutinized to meet the criteria of its environmental policy. For example, PVC is avoided, and customers are offered nickel-free fixtures. The company has also drawn on experience from a research project where it built an allergy-friendly, multi-family building with the financial support of the Swedish Council for Building Research.

Besides the health aspects of its buildings, an area of environmental focus has been the sorting of waste at building sites. JM requires that all surplus materials and packaging supplied to a building project be taken back, recovered, or handled in a way that is as environmentally friendly as possible. This objective is partially attained by sorting the "residual products" out at the building site. There are five on-site recycling categories: wood, gypsum, steel, plastic and mixed material.

Metrics
Environmental plans are developed for each project, identifying the environmental goals of that project. Typically there are 25 areas measured. The key ones are energy/square meter, both during the construction phase and during operation of the building, and the amount of waste that is generated on a project. Other measurements are the number of employees educated, number of subs and suppliers with an environmental policy, how much PVC is used, etc.

The company has an environmental manager and staff with someone monitoring each region and each project. It is considering going for ISO14001 certification.

Communicating Its Efforts
Marketing is done primarily through sales literature and newspaper ads. In the 1980s many buildings had the "sick-building" syndrome. It cost 500M SEK (about $60 million) for the companies involved to repair these buildings. JM's sales literature shows prospects why they won't get sick. A product specification is provided with a list of all the chemicals and other materials it uses.

Overall added costs for these environmental efforts is two to three percent above normal. Prices are always set by market conditions but often the company is able to get a small percentage more.
If a commercial customer doesn't want an environmental approach, JM will do what the customer wants but ask it to sign a waiver.

Lessons Learned
· The biggest on-going challenge is keeping everyone educated because of employee turnover and use of new subcontractors.

· Sometimes natural material is harder to take care of by the customer than synthetic. For example, wood needs to be painted. It is very important to educate the customer about these matters.

· Subcontractors are resistant to take the time to recycle properly because they are paid on a time-incentive basis.

Benefits
· Local communities often own the land that is being developed and will select a developer based on its environmental policies.

· JM has developed a positive reputation with customers because they know that JM is ecofriendly.

· Potential building delays are eliminated because of the support and trust JM has earned from environmental groups.