Climate change matters. Sustainability matters. ESG matters. ESG are the 3 main pillars that help run a company which makes an impact on the planet, the staff, the people, and its governance practices. Firms should be dedicated to building a long-term ESG policy and developing a sustainable organisation: the construction industry is no exception.
ESG in the Construction Industry
Environmental, Social and Governance are essential in any operating construction company. In recent years, many construction firms have started to call for action for renewable energies such as solar, wind and geothermal to be used for the development of sustainable infrastructure. Using more energy-efficient ways will help bring buildings and communities closer to net zero.
For construction companies, sustainability is the main driver in the 3 pillars of ESG in recent years. The built environment counts for almost 40% of all the carbon emissions in the world, with operational emissions (energy used for heating, cooling and lighting in buildings) counting for 28%. With these statistics, it is undeniable that the construction industry has a big role to play in the mitigation of climate change and reducing carbon emissions. AECOM, an engineering consulting firm, has launched an all encompassing ESG strategy- with an action plan created for each pillar. In terms of the environment, AECOM aims to enhance sustainable development by reducing their carbon impact on construction projects by 50%. They plan to achieve this goal by reducing business travel by 50% and incorporate nature into their projects by including green infrastructure such as living walls and roofs. Socially, the company is aiming to increase the percentage of women in senior leadership roles and at least 35% of the entire workforce. In terms of governance, AECOM has announced they will report ESG risk factors to the board of directors regularly, and the Board’s Safety, Risk and Sustainability committee will track ESG performance targets in line with leading industry benchmarks such as SASB and TCFD conducted at the firm.
With the climate crisis at the forefront of public mind, many graduates are seeking organisations that have a foreseeable sustainable future. Jo da Silva, Global Sustainable Development Leader at ARUP said, “The greatest difference we can make is through the advice and solutions we offer our clients and communities – from helping city leaders take practical steps to meet the Paris Agreement, to working with property developers to understand how digital technology can reduce their resource consumption.” This is important as it entails that ARUP as a firm is dedicated to creating inclusive and sustainable communities are good to address the climate crises which we are facing right now. Considering that the construction industry accounts for almost half of the carbon emissions, it is obvious that if ESG frameworks were implemented, the sector will indefinitely be a game changer.
Figure 1: The Paris Agreement
UCL Student Centre
You may be wondering, what does the Student Centre have to do with ESG or sustainability?
The Student Centre is the flagship building for sustainability at UCL, where UCL students have meetings, study, chill, eat, sleep…. basically, our second home at this point. The team who worked on this project has achieved the highest possible levels of environmental performance, going beyond regulatory and planning requirements. The Student Centre in fact achieved the highest possible BREAAM (an environmental assessment) outstanding ratings, in which only a few buildings in the UK achieved the same standard.
The main features of the building includes highly efficient building fabric which helps to regulate temperature and minimize energy usage , and there is a large green rooftop terrace with many native species. The centre is naturally ventilated, and there are fittings to reduce the water consumption by 50%. It is predicted that there will be a 35% reduction in building carbon emissions, thus study spaces in the centre are all optimising daylight and indoor air quality.
Figure 2: Our humble abode
The Biggest Hurdles in following the rules
There is way more to consider than just the operational performance of built environments/ buildings. How are raw materials harvested? How are the materials used for construction embody carbon? What are their ecological implications? All of these factors are super relevant to the environmental impacts of construction. The setback of construction having an effective ESG framework? The industry is continuously being challenged to minimize the use of resources and recycling/ reusing waste for future projects, and embedding circular economy into its design solutions.
Many large organisations such as Building Performance Institute will not consider letting lease agreements for new buildings unless they meet the regulations on environmental rating schemes such as LEED and BREEAM. There is a lot of pressure on development construction companies to not only deliver a sustainable carbon footprint, a positive environmental impact but to also follow the standardized schemes. Although some companies may be trying their best to abide by the rules of ESG, they may come across significant barriers such as cost and a change of mindset. Construction and contractor firms that have a long history may be slower to adapt to the proactive approach and regulations of ESG worldwide. These challenges at the same time lead to tight safety standards and strict rating schemes.
The industry is also facing multiple challenges such as recruiting skilled labour and talent. Due to recent economic downturns of COVID-19, travel restrictions etc., it is becoming more difficult for some construction companies to reach ESG metrics.
So, is ESG the game changer for the construction industry?
The construction industry has a prominent part in shaping our towns, communities and homes. This sector creates the future of our spaces and communities, and without construction caring about sustainability, imagine what the future would be like. ESG might not even exist without the sector of sustainable construction. Therefore, this industry has a great path in leading the way in embedding ESG values into operations and business models.
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