Supply chains in the construction sector have always been fragmented, opaque and difficult to manage, but increased environmental scrutiny is giving new urgency to the issue.
Improving transparency and reducing the environmental impact of the supply chain, no matter how difficult, is now a major reputational issue and should be elevated to a boardroom discussion.
Sustainability is no longer a topic for corporate social responsibility campaigns – it has become essential practice for all ethically sound businesses. Protecting the environment is now a matter of protecting and enhancing reputation, avoiding fines and helping a company to grow.
When it comes to sustainability, the issue that faces construction is the difficulty of monitoring and proving the environmental impact of suppliers. Not an easy task with 50 to 70 suppliers and subcontractors.
Where your environmental impact is really coming from
With supply chains of this size, a risk of greenwashing arises, where claims about the scale of sustainability benefits are inflated. Assembling a true picture requires proof points and regular auditing by third parties, to ensure no measurements are misrepresented. This can require a lot of time and effort, but with as much as 90 per cent of a company’s environmental impact coming through its supply chain, government and consumers are taking note. Boardroom leaders must do the same.
“By being thorough and analysing their supply chain, they have an opportunity to reap rewards through improved reputation as well as a greater chance of winning a wealth of contracts”
But, it’s not all about protection.
As a supplier playing a significant role in corporate supply chains, we know accurate monitoring and improvement of supply chain sustainability can bring growth.
Since the Social Value Act of 2012 was enacted, 5 to 10 per cent of government tenders have been scored on economic, social and environmental wellbeing. With government contracts worth hundreds of billions of pounds being tendered over the next few years, the payoff from social value could be huge.
We have seen carbon reductions that we have achieved, measured and reported contributing to the social value scores of our clients in major tenders.
Effective solutions
Not all beneficial changes need to be major or expensive. For example, switching the type of paper used at head office can be significant. One of our clients moved from traditional to sustainably sourced eucalyptus paper and reduced tonnage of paper used in a year by 12.5 per cent, from 450 tonnes to 394 tonnes.
Another low-cost but effective method is consolidating deliveries. Delivering the same items in fewer consignments can lead to significant reductions in carbon emissions.
These kinds of improvements depend on collaboration – from investigating the existing supply chain and finding where improvements can be made, to demonstrating the benefits through monitoring and analysis.
As environmental scrutiny continues to squeeze the industry, construction companies and boardrooms that don’t spend time examining their supply chains and collaborate with their suppliers are leaving themselves open to the risk of fines and reputational damage.
But, by being thorough, and analysing and auditing their supply chain, they have an opportunity not just to protect themselves, but reap rewards through improved reputation as well as a greater chance of winning a wealth of government contracts.
Peter Hradisky is managing director for the UK and Ireland at workplace equipment supplier Lyreco
