Building environmental, social and corporate governance (ESG) values in the construction industry

Environment, social and corporate governance values, also known as ESG values, are increasingly important to the UK Construction industry. As we heard at the recent London Build online event, the relatively new consideration around topics like carbon reduction, social value and ethical employment practices is bringing both challenges and rewards to the industry.

At London Build, Achilles hosted a panel discussion on “Building modern day values into procurement and supply chain management”.  On the panel were representatives from McGee, Multiplex, AECOM, ISG and VolkerWessels UK, who came together to understand and discuss these key points:

  • how the industry is succeeding in making ESG values common practice
  • overcoming the barriers to progression posed by the competitive landscape

Making ESG values common practice

A science-based targets initiative approach is currently the gold and industry standard. With large businesses being asked to report on their carbon emissions, the panel provided examples of actions being taken to drive and lower carbon emission within the UK construction industry.

The key here is to design for sustainability by using a fully embedded circular economy approach. This minimises waste and make the most of resources. VolkerWessels UK outlined their focus on their own impact with a 10-year strategy to filter down their supply chain. This programme will be looking at initiatives such as moving away from diesel vehicles where possible, and repurposing lower value materials via a newly created app ‘Volker Switch’. This app allows a site manager to upload details and specifications of leftover material from a project outlining; what is, where it is located. The app then alerts all site managers signed up to the network so they can then make contact with the relevant individual should it be something they are interested in.

The approach that Multiplex have adopted is through science-based targets initiative that is aligned with limiting global temperature rise to 1.5C by 2050. Multiplex see supplier relationships as absolutely critical to achieving their ESG goals, and they are working in close partnership with their critical suppliers to that end. By targeting their top 20 subcontractors that have the most impact (scope 3 – such as structural and steel specialists), Multiplex are aiming to meet their overall target to reduce long term and direct carbon emissions of 55% by 2030.

Overcoming the barriers to progressing your ESG programme

Cost is a huge factor and getting clients and/or contractors to understand more of the long-term benefits is challenging. The key to success here is education and building relationships. Education around sustainability is going to be crucial. As the procurement teams work closer with their training and awareness colleagues and initiatives, the sector will see some real movement towards ESG goals.

Understanding all the variables when it comes to modern slavery, social value and particularly carbon will be vital moving forward to help upskill businesses and for principal contractors, make their life a little easier in getting the industry going in the right direction. Watch the recording of our panel discussion here and, if you would like to understand more about our ESG programme, please contact a member of our team.

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