Social Sustainability and why it is integral to every part of the construction supply chain.

ESG stands for ‘Environmental, Social and Corporate governance.’ Having successfully compartmentalized ‘sustainability,’ ESG is everywhere in today’s world, proclaiming the top spot on many organizations’ agendas. Several governments have reinforced its importance, implementing ESG into legislation and procurement practices. Notwithstanding the UK Government, whose latest Public Procurement Notice dictated that ESG objectives are to have a minimum weighting of 10% in all government tenders. Furthermore, any company misrepresenting its ESG credentials runs the risk of facing penalties (Mayer Brown, 2020).

Recent work carried out by Nutral Ethical Workforce Services highlighted that 75% of a project’s tier 2 subcontract supply chain had social sustainability strategies but a massive 58% did not measure or record the activities and the impact that they had. 100% of companies had EDI policies but only 33% were measuring diversity within their business.

This is a great example of where refinements to supply chain practices could provide tangible evidence to show that social sustainability is driven through the tiers of the supply chain delivering the project. Tangible evidence is critical as the market’s eyes focus increasingly on Social Sustainability as a criteria for winning work. This is supported by the recent Construction Enquirer article detailing housing association Peabody to now be weighting Social Value at 20% in their evaluations (Grant Prior, 2023)

The tier 2 subcontractors in this example are mostly made up of SMEs (82%) and 75% of them are measuring their carbon footprint, demonstrating how even the smallest supply chain members can develop to meet the requirements of today’s world. The supply chain’s development in Environmental Sustainability over Social Sustainability correlates in fashion with the amount of research done on both areas and the tools available to the industry. Environmental sustainability is far more researched with measurement tools and criteria available through the likes of BREAM or LEED (Adebayo et al, 2019).

As the world’s view on Environmental Social Governance matures, there is an increasing focus on social sustainability. So, if improving the community and people’s lives is not enough of an incentive to propel social sustainability, winning new contracts and securing construction projects’ approval should do it!

Nutral is committed to driving social sustainability through the tiers of the value chain to create a better construction industry. The starting place for all companies is to start asking the right questions and measuring responses so they can build a foundation for improvement.

Developers and Principal Contractors require evidence and data of strong social sustainability practices to satisfy stakeholders, not only from an investment and local authority viewpoint, but also now from a consumer perspective.

The supply chain is the key source of data and evidence that helps to secure both funding and local authority approval for construction projects which drive business. For this commercial reason, all tiers of a value chain need to develop and execute policies which drive social sustainability.

Industries are now proactively investing in social sustainability practices. However, as with any change, there are sceptics who are hesitant to move with the times. ‘Greenwashing’ or “Social Washing” is now a recognised term exposing those organizations for whom ‘sustainability’ is mere empty rhetoric. For this reason, sustainability should and will apply to all businesses, including the UK construction industry. The analogy of paddling legs beneath a swan is reminiscent when describing some supply chains sitting beneath major construction contractors and developers. As scrutiny over social sustainability increases, it is supply chain practices which will prove the value of sustainability commitments. This is where nutral comes in, as your ethically committed workforce supply chain management. Creating transparency across the entire supply chain, we instil confidence that all people supporting the delivery of operations are treated fairly, ethically, and without discrimination.

References

Fathi, M., & Bakis, N. (2020). Environmental and Social Sustainability in UK Construction Industry: a Systematic Literature Review. Sustainability, 12(8), 3416. doi: 10.3390/su12083416.

Construction Enquirer. (2023, April 20). Peabody to apply 20% social weighting to contract bids. Retrieved from https://www.constructionenquirer.com/2023/04/20/peabody-to-apply-20-social-weighting-to-contract-bids/

Mayer Brown. (2020, October). ESG in UK Public Procurement: Taking Social Value Seriously. Retrieved from https://www.mayerbrown.com/en/perspectives-events/publications/2020/10/esg-in-uk-public-procurement-taking-social-value-seriously