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Defining sustainable construction

For the past fifteen years, sustainability has become a buzz word. By Iain Audus

But the current financial downturn provides an opportunity for the construction industry to ask itself some serious questions and hopefully find some honest answers.

To add definition to sustainable construction we need to decide what it isn’t:

  • An interchangeable word with environment.
  • A competitor or comparable option to Corporate Social Responsibility (CSR).
  • A nice business add-on - good for marketing when things are going well.

But what is it?

  • It’s a fundamental concept to be applied to the way businesses are operated.
  • It expands on and supports existing business practice.
  • There is no end to being a sustainable business. In the same way that businesses don’t attain a specific amount of profit and then say “well that’s it done, lets pack it all in now”.

The Strategy for Sustainable Construction, launched in June 2008, does not provide a definition for Sustainable Construction, but does make the link between the UK Government Sustainable Development Strategy and the construction industry.

Many construction companies use the triple bottom line approach to plan and report on their sustainable performance. There are many definitions for this, one of these from WRAP states ‘The triple-bottom line encompasses environmental responsibility, social awareness/responsibility and economic profitability.’

So in theory a construction company with well embedded sustainability strategy should be in a relatively stronger position in 2009, than a company that hasn’t.

Is there anything to suggest that this is the case?

There appears to be some limited evidence of sustainable performance providing improved financial returns, although overall there are few recent examples of statistical evidence.

SAM (Sustainable Asset Management) an independent asset management company published its 10th year assessment of corporate sustainability performance for the Dow Jones Sustainability Indexes in September 2008. One of its findings was ‘SAM’s in-house and external academic empirical work suggests that there is a positive and statistically significant correlation between corporate sustainability and financial performance, as measured by stock returns.’

Are construction companies recognised for sustainable management performing better than others in the current economic climate? Again there is some evidence to suggest that this is the case, but not conclusively. By reviewing publicly available information it is possible to identify potential early trends.

Two simple criteria were included for this article - recent sustainability recognition and financial performance.

Wates Group recently won a sustainable contractor of the year award and also posted its annual results up to 31 December 2008:

  • Group profit before tax up 25 per cent
  • Turnover exceeded £1bn for first time in 111 year history
  • Strong forward order book at £2bn

But one fear in the current economic climate is that items such as sustainability would appear less relevant - perhaps as a result of limited understanding of the subject.

However, it seems better than first feared. Because of the current economic difficulties the UK Government has brought forward public spending projects in a bid to stimulate the economy.

Public funded projects are key means to the delivery of the Government’s sustainable development strategy and Strategy for Sustainable Construction. To be able to win work in these projects, companies will have to be able to demonstrate sustainable performance, by meeting sustainability performance targets. According to the Strategy for Sustainable Construction:

  • New homes and schools are expected to be ‘zero carbon’ by 2016
  • By 2012 a 50 per cent reduction target for waste to landfill (based on 2008 industry performance)
  • All new homes built with English Partnerships and the Homes and Communities Agency to meet Code for Sustainable Homes Level 3 for water efficiency

Companies that have invested in their internal sustainability capabilities, from the top down should be in a position to demonstrate that they are suitable for these new projects. They will have past project performance as references, internal management mechanisms to demonstrate how targets will be delivered and external reporting of their sustainability performance over a number of years.

That is not to say that it is too late for other companies. All the requirements for sustainable management and performance expectation are readily available, especially in the public sector.

One thing is clear though and that is that there are still opportunities in construction in 2009 and delivery of these will require demonstrable sustainable performance.

Iain Audus is senior consultant for Bureau Veritas corporate responsibility services

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