For the construction industry, the demand for sustainable business practices -- and the pressure to maximize the energy efficiency and sustainability of buildings and other structures -- towers higher than ever.
In recent years, cities, counties and states have altered building codes to promote the use of energy-efficient designs and sustainable materials. Green building and energy-efficiency rating standards, such as the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification program and the federal government’s Energy Star initiative, have further invigorated demand for green construction.
Construction companies also face pressure from new stakeholders, including investors and supply chain partners, to show evidence of sustainability efforts. Mainstream investors are showing increased interest in environmental issues, and the California Transparency in Supply Chains Act (which took effect earlier this year) has increased the number of major consumer-facing companies that require their suppliers, vendors and subcontractors to report their own sustainability practices.
As the appetite for sustainable construction increases across the board, sustainability has become a requirement -- not just a voluntary differentiator -- for companies that want to remain competitive. The conversation has evolved from merely talking about goals and plans to actually demonstrating proof of green building efforts.
Sustainability reporting is an invaluable tool that can help companies hold themselves accountable to consumers and business partners looking for evidence of green construction while also demonstrating that they’re meeting the requirements of their investors, supply chain partners and certification programs. As Mary Rhinehart, senior vice president and CFO of Johns Manville, a building-materials manufacturer, told CFO magazine, “Being a sustainable company is good business, and it’s also good business to help your key stakeholders understand your sustainability efforts.”
And yet, according to the Global Reporting Initiative, sustainability reporting lags in construction and real estate compared with other sectors (see PDF). For many construction companies, now may be the perfect time to start.
Best Practices for Sustainability Reporting
For construction companies looking to initiate a sustainability reporting process, here are some best practices to consider:
- Acknowledge the issues. Do your homework and determine what your consumers, stakeholders and other constituents need to glean from your sustainability reporting. Balfour Beatty, a multinational construction and infrastructure company that produces a robust annual sustainability report, is a good example of a company that exposes a wide range of specific data, from an overview of its progress toward sustainability to key performance indicators for specific issues.
- Position your organization. Offer an explanation for why your company has initiated a sustainability effort and why it’s important for the future of the company and for the construction industry as a whole. Sellen Construction, a Seattle-based builder that leverages its website to publicize its sustainability efforts rather than a formal report, has been vocal about its belief that green building can help not only the environment, but also construction companies’ top and bottom lines.
- State your policies. Rather than generalize about the sustainability measures your company is taking, be specific. Perhaps the most important element in an overall communications plan is being committed to providing information about sustainability that’s grounded in solid science. In its report, Balfour Beatty outlines 10 key sustainability “messages” the company focused on in the prior year, then relates data-driven case studies that address each message.
- Set goals and measure your performance. Re-evaluate your goals, policies and practices along the way, and make changes when necessary. In 2008, Sellen Construction set a goal for each of its projects to divert a minimum of 75 percent of construction waste away from landfills. Today, it claims, its recycling program diverts an average of 95 percent of construction waste from landfills, saving Sellen -- and its clients -- up to $600,000 a year.
- Communicate without fear. Transparency is key when it comes to sustainability reporting. Set a schedule for reporting and stick to it. After that, consider communicating about your sustainability efforts between reports on a consistent basis. For example, Balfour Beatty reports annually, emphasizing transparency and requiring its operating companies to complete six monthly self-assessments of progress against the company’s overall sustainability road map.