Organizational Governance

Sustainability Expectations Rising in the Construction Industry:
Toolkit Can Help

With rising demands from multiple stakeholders to reduce construction’s environmental impact and accelerate its social benefits, a guide for the sector provides a handy checklist for construction companies to keep up with the times.

By Coro Strandberg | Published 5 years ago | About a 5 minute read

Image: David Mark/Pixabay

Headlines grab our attention as they are meant to do, but they often obscure the information that really matters. Stories of SNC Lavalin controversies mask the social good of the construction industry and divert focus from the industry’s other pressing social and environmental opportunities and risks.

First, we should recognize that the construction sector has a proud tradition of being one of humanity’s oldest businesses; its work stands as testament to human progress and arguably enhances our quality of life. Today, as society’s needs evolve, the industry is transitioning to further improve its social, economic and environmental impacts. Globally, the sector is grappling with its role, not only in corporate social responsibility (CSR), but in sustainability — challenged by changing customer and government expectations to go beyond business as usual.

A big driver behind this shift in sustainability demand is population growth and urbanization around the world, which is in turn creating demand for construction and infrastructure. That demand is expected to create pressure on strategic resources essential for the building process — such as energy, raw materials and water; not to mention pressure on human resources, as construction projects use one of the world’s largest workforces. Increasing demand for building materials can drive up costs and force businesses to innovate and look for alternatives.

Construction — a very visible activity — is under the spotlight locally, nationally and, in the age of social media, globally. Increasingly, it will be pressured to align its impacts with society’s expectations. “Next generation” workers will evaluate companies recruiting them at least in part on those organizations’ social performance. Anticipating trends like these can create sustainability opportunities for firms.

There are several drivers of sustainability in the construction industry:

Client demand: Growing demand by customers, especially local governments and other public sector organizations, for more sustainable and socially responsible projects.

Community and public expectations: Rising expectations from communities and the general public that business contribute community and social benefits. As construction is very visible to the public, these rising expectations are especially significant.

Changing workforce: Labour shortages and millennial employees will create pressure for improved social and environmental practices to attract, retain and engage employees.

“Green” building: The market penetration of more sustainable buildings has been growing over the last decade and is expected to continue. New research that links office design to staff health, wellbeing and productivity is likely to drive interest in healthy buildings in future.

Climate change: Climate change and the transition to a low-carbon economy is likely to increase physical, regulatory and brand impacts.

Legislation and regulation: Changes to building codes and bylaws over the next decade are expected to raise environmental and safety standards in order to improve the social and environmental impacts of construction.

There is no getting around it. The construction industry is a big driver of social change, and a big contributor to society’s environmental footprint. Here are the stats:

Greenhouse gas emissions: The building sector is the single largest contributor to climate change, with occupied buildings responsible for 30–40 percent of total global greenhouse gas (GHG) emissions. A UNEP report on Greening the Building Supply Chain states: “It has been estimated that in use, emissions account for over 80 percent of the total life cycle carbon emissions of buildings, with a further 15 percent of emissions embodied in materials and around one percent resulting from the construction process itself.” As more energy-efficient buildings are constructed, these ratios will change and more focus will be on construction materials and the construction process.
Energy use: The manufacture of building materials consumes 10 percent of the global energy supply.
Materials use: The construction industry is the largest global consumer of resources and raw materials, with half of all resources used in the manufacturing of building products and components.
Water use: While buildings during use are responsible for over 10 percent of water used globally, indirectly the production of building materials and construction accounts for a significant proportion of total water demand.
Waste generation: Building construction and demolition waste — including asphalt, concrete, gravel, bricks, ceramics, plumbing, insulation, wood, glass, metal and electrical fixtures — contributes about 40 percent of solid waste streams. Typically, about 10 to 15 percent, and up to 45 percent for some materials, of the total materials ordered for construction projects are either unused or end up as waste.
Job creation and economic growth: In Canada, over one million men and women are employed in the sector, roughly seven percent of Canada’s workforce. Construction firms are significant contributors to the Canadian economy: six percent of Canada’s annual GDP, over $75 billion, is generated from construction.

With rising demands from prospective employees, regulators, clients, investors and others to reduce construction’s environmental impact and accelerate its social benefits, a guide for the sector — commissioned by the Canadian Construction Association — provides a handy checklist of options construction companies can use to enhance social and environmental impacts. Doing so will help companies:
win new business
build and maintain a positive image
attract, retain and motivate employees
improve risk management
build community goodwill
reduce operating costs
discover new ways of doing business
reduce regulatory delays
improve the value of the company to future owners
increase access to financing

Check out the guide to learn more about the risks and opportunities faced by the global construction industry and about strategies companies can employ to address those issues and to win in the emerging marketplace.