CSR Expectations Rising in the Construction Industry: Toolkit Can Help
Published on September 13, 2019
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 as 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 corporate social responsibility (CSR) role – challenged by changing customer and government expectations to go beyond business as usual.
A big driver behind this shift in CSR 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 and getting ahead of trends like these can create CSR opportunities for firms.
There are currently several “drivers” of CSR in the construction industry:
Client demand: There is a growing demand by customers, especially local governments and other public sector organizations, for greener and more socially responsible projects.
Community and public expectations: There are 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 CSR practices to attract, retain and engage employees.
Green building: The market penetration of green buildings has been growing over the last decade and is expected to continue. New research that links office design to staff health, well-being 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 per cent of total global greenhouse gas (GHG) emissions. A United Nations Environment Program report on Greening the Building Supply Chain states: “It has been estimated that in use emissions account for over 80 per cent of the total life cycle carbon emissions of buildings, with a further 15 per cent of emissions embodied in materials and around one per cent 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 per cent 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 per cent 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 per cent of solid waste streams. Typically, about 10 to 15 per cent, and up to 45 per cent for some materials, of the total materials ordered for construction projects are either unused or end up as waste.
- Job creation and economic growth: Construction is a major global industry. In Canada over one million men and women are employed in the sector, roughly seven per cent of Canada’s workforce. Construction firms are significant contributors to the Canadian economy: six per cent of Canada’s annual gross domestic product (GDP), over $75 billion, is generated from construction.
The construction industry is increasingly in the spotlight, with rising demands from prospective employees, regulators, clients, investors and others to reduce its environmental impact and accelerate its beneficial social impact. Fortunately, there is a guide for the sector, commissioned by the Canadian Construction Association, which 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 win in the emerging marketplace.