This article is part of a blog series on the supply chain in the construction industry, exploring how it can be improved to overcome today's pitfalls.

Role of supply chains in sustainability

The construction supply chain (CSC) involves many stakeholders such as the owner or client, the architect, and various types of engineers bringing goods, materials, trades services to the construction site to ensure a building and construction project is successful. All stakeholders play an important role in sustainability. Every project requires money and a comparative analysis of the Value for Money (VfM) framework should be conducted to achieve sustainability in the delivery of your projects.

The sustainable development goals (SDGs) were adopted by the United Nations member states in 2015. The aims are to:

• end poverty
• protect the planet
• ensure that all people enjoy peace and prosperity by 2030.

The SDGs 17 goals are interdependent to make sure that, when you take an action somewhere, you do not negatively affect another area.

Any construction project should balance social, economic, and environmental factors.

What is sustainability in supply chains?

Sustainability means:

• you accept that you have a duty, both moral and legal, to act ethically and responsibly
• you engage in reducing the negative social and environmental impacts of your operations on the climate
• you protect your reputation and your profitability.

Importance of Sustainability in Construction Supply Chains

All stakeholders, customers, clients, investors, employees, and communities, expect construction companies to:

• implement sustainable best practices
• demonstrate they are willing to protect their profits, their people and the planet.

Sustainability is now mandatory.

Declining to address sustainability issues may put your business in jeopardy. You will be losing your competitive edge as you will be:

• reducing your ability to win new projects,
• breaking laws on issues like pollution prevention or modern slavery.

Supply chain management

Putting sustainability at the forefront of your supply chain management is not negotiable anymore because the construction industry is creating high quantities of waste. We generate carbon dioxide emissions and other greenhouse gases, negatively impacting climate change all while consuming large amounts of energy, not just on site, but also to manufacture the products used in building.

Your partners

Managing sustainability with your partners is difficult as they are:

• reluctant to reveal their relationships
• protecting their commercial advantage
• injecting uncertainty in the supply chain due to a lack of clarity
• augmenting risks for exploitation of human rights and corruption.

Your responsibilities

To be a responsible, sustainable company you should:

• follow the laws and regulations regarding human rights, exploitation, the environment, and the industry standards such as the Common Assessment Standard to boost sustainability in the construction industry
• reduce the negative environmental and social impacts that your business and supply chain relationships can inflict on the planet
• construct assets that are resilient and efficient
• support communities by choosing to use locally-based supply chain partners
• introduce the protection of the environment in your supply chain policies to reduce the negative impact your organization may have on employees, local communities, and wider society.

The Amsterdam examples

In 2020, the municipality of Amsterdam had to adopt a new strategy to recover from the pandemic crisis. They used the concept of the “Doughnut Economy” and adapted it to the size of a city, with the help of the British economist Kate Raworth, who developed the model.

The purpose of the model was to come up with strategies to deliver a good life to the Amsterdam citizens, without damaging the planet. The model is now used in many other cities.

Why is sustainability in the supply chain increasing in the construction industry?

All construction types have, during their life cycle, a negative impact on the environment.

So, the construction industry should be leading the way, globally, to fight issues related to climate change and protect the planet.

Materials used in construction

In the UK alone:

Buildings and other assets use a lot of energy over their lifetime:

• 40-45% of the total carbon footprint is produced by the construction, operation, and maintenance of the built environment
• 25% comes from the process
• The industry produces a lot of landfill waste
  • 32% of the total landfill waste comes from construction and demolition projects
  • 13% of materials delivered to construction sites are not used and binned, generating carbon dioxide and other greenhouse gases.

Sourcing materials irresponsibly could damage the environment and biodiversity.

For instance, you should only buy certified timber from responsible arboriculture organizations applying environmental and social responsibility policies to their processes to protect the planet.

International standards like FSC can help you support the use of responsibly produced timber in the United Kingdom.

Construction projects use a lot of water. For example, in the UK, construction accounts for approximately 30% of total water use. A lot of United Kingdom regions experience water shortages aggravated by climate change. Unless actions are taken the country may not be able to meet water requirements in 20 to 25 years

Materials manufactured offshore may use water and could generate pollution.

Exploitation of Construction and Supply Chain Workers

Sustainability includes social responsibilities. This means that, throughout your supply chain, you ensure that:

• workers are adequately remunerated
• human rights are respected
• health and safety policies are in place and applied to all laborers
• unreasonable, long hours should be the exception, not the rule

Modern slavery

Unfortunately, modern slavery is growing worldwide. It is hard to identify where and if exploitation takes place in the supply chain in construction, as it lacks clarity and visibility. It involves:

• many organizations contributing to it
• large and complex processes
• many subcontractors and labor agencies.

“Trafficking in persons”, “human trafficking” and “modern slavery” are used as umbrella terms to refer to both sex trafficking and compelled labor.

In the USA, The Trafficking Victims Protection Act of 2000 punishes trafficking in persons, especially women, and children.

The United Nations Convention against Transnational Organized Crime (the Palermo Protocol) uses other terms to describe modern slavery like:

• involuntary servitude
• slavery or practices similar to slavery
• debt bondage
• forced labor.

Traffickers use various bullying and ambiguous practices to deprive their victims. Workers may be considered trafficking victims regardless of whether they:

• were born into a state of servitude
• were exploited in their home town
• were transported to an exploitative situation
• had previously consented to work for a trafficker
• had participated in a crime as a direct result of being trafficked.

Clients are welcoming more Environmental and Social Sustainability

Clients and their stakeholders use sustainability to enhance their reputations. They now introduce clauses in their contracts aiming to:

• protect the environment
• enhance the welfare of people
• implement sustainable business practices.

Green sustainability is growing in the construction supply chain and if you want to succeed you should prioritize it to:

• fuel your growth and expansion
• comply with international laws on sex trafficking
• put clear policies, processes, and guidance in place to eradicate exploitation.

Green construction supply chain features

Improving your business’s sustainability is an opportunity for your organization to make a real difference.

Benefits of a sustainable business

In the United Kingdom 520 construction contracts for a total value of $4.2bn and ranging from $15,000 to $150m, were analyzed to find how much social value The United Kingdom produces. The findings show that:

• ROI is up by more than 10% compared with 19.55% last year
• the construction industry invests in community changes that impact people’s lives.

Suppressing the negative impact your business imposes on the planet, and concentrating on the positive societal and environmental aspects of your operations will generate a lot of benefits that will help your organization to:

Reduce your costs - Minimizing your carbon footprint and reducing the number of potential accidents in your organization will lower your insurance fees. You will also avoid fines and compensation payouts. By obeying the sustainability legislation you’ll eliminate waste and lower your cost of non-compliance.

_ Increase reputation and revenue_ - Protecting your business from reputational damages and boosting your professional status are key factors that will win you more projects, gain customers’ trust and loyalty, and help you to market your business to new customers.

Mitigate risks - By introducing risk management systems in your organization you will avoid potential threats to people and the environment, increasing your chances of success and opportunities.

Improve employee attraction, satisfaction, and retention - Your employees will be proud, happy and satisfied to work for a sustainable organization that will improve productivity as well as employee satisfaction and retention.

Attract investors - To secure funding, adopting sustainable practices and minimizing your environmental and social impact will appeal to investors.

How to implement a Sustainable Construction Supply Chain

It is challenging to introduce environmentally and socially responsible policies in your supply chain processes.

First, you should identify in the various stages of your operations, the impacts they have on the environment, be they social or economic.

Then you plan your implementation with all your supply chain stakeholders including your clients, to make sure you will respond to their requirements. Your steps should include:

• introducing ethical sourcing practices throughout your entire supply chain
• streamlining supply chain processes
• reducing the environmental impact of transportation
• eliminating waste by introducing a good planning system like Plannerly.
• increasing visibility and clarity by automating your supply chain processes

In Conclusion

Implementation of supply chain management in the construction industry is still lacking momentum.

The necessary sustainability components are:

• environmental
• social
• financial.

Many challenges are still to be surmounted:

• inefficiencies in the logistics system
• shortage of funding
• environmental issues in demolition procedures
• difficulties in applying sustainability measures due to high skill, data, and time requirements.

Potentials for improving the current situation in the construction industry are:

• increasing investment in energy conservation
• adopting emission reduction technologies to drive sustainable development
• establishing strong green supply chain relationships
• forming a financial support group for small construction companies.

The long-term relationships between construction companies, suppliers, and customers require implementing best practices and new smart technologies to simplify and streamline the supply chain process.

The following steps can help you build a sustainable supply chain:

• analyze sustainability issues within the supply chain
• lessen raw materials usage
• decrease waste materials
• reduce fuel consumption by reducing unnecessary mileage
• establish long-term trusting relationships with suppliers
• implement social and environmental responsibility policies
• spend money wisely in a responsible manner.

Most firms intend to establish their best practices, but work gets in the way and they are never created. £220 million are wasted per year in the UK. As a result, there are people solving problems that others have already solved.

Driving Vision's BIM expertise diagnostic looks at how you can eliminate waste (time and material), and improve your margins and the quality of the information provided at the design and construction phases.

A Driving Vision expert will conduct the interviews online and will issue a report and discuss with you our findings. Together we will decide the best way to implement the solutions at your pace and according to your budget.

Implementing BIM can be daunting, but Driving Vision is here to help you at the pace you are comfortable with. Get started by getting in touch now