There is increasing importance being placed on ethical sourcing on the part of clients and commissioners of construction projects. In response, the industry and the various bodies and organisations that have been established to monitor and regulate the transition of ethical practices into mainstream construction processes have become more sophisticated.
Ethical sourcing places a responsibility on contractors to ensure materials they use are supplied by markets or companies that have minimum standards of labour practices, as laid out by the Ethical Trading Initiative’s Ethical Sourcing Base Code. These include ensuring the right to collective bargaining, that working conditions are safe and hygienic, that workers receive a living wage and that child labour isn’t being used. Ethical sourcing becomes more important with complex supply chains that extend beyond the UK and outside of the EU. By sourcing ethically and responsibly we are not only effectively acting as a driver for those rights, welfare and freedoms being in place, we can highlight where they are missing or being abused.
In addition to long-held requirements for environmental sustainability, project commissioners are now demanding adherence to these additional requirements as set out by the ETI. Following on the from the Olympics, for example, the Crossrail project demanded that suppliers adhere the requirements laid down by the Greater London Authority for ethical sourcing for their timber, stone, cement, steel and PPE and set up a working group to ensure this was strictly observed.
Responsible sourcing
In 2008, the UK government/industry Strategy for Sustainable Construction called for at least 25% of products to adhere to schemes recognised for responsible sourcing by 2012. This placed an institutional pressure on businesses to ensure their products met these standards. Importantly for businesses, the reputational risks inherent in using products or suppliers that have unethical connections can have significant impacts on a business’s reputation, bottom line and level of consumer trust and so proving ethical sourcing within their supply chain is imperative.
Ethical sourcing is proving to be a challenging and emotive area for the construction industry. While there is a raft of guidance and standards, codes of practice and organisations dedicated to embedding ethical sourcing within supply chains, much of it isn’t product specific. A number of standards and codes have been developed towards building in the necessary comfort and assurance that certain products comply with ETI. Certifications such as the Programme for the Endorsement of Forest Certification (PEFC) and the Forest Stewardship Council (FSC) provide assurance that timber and timber-related products have been ethically sourced. There is a growing convention for timber being used on construction projects to be sourced via these certification standards only. The UK Contractors Group issued an agreed statement requiring its members to ensure that all timber products purchased for either temporary or permanent inclusion in the works to be certified as legally and sustainably sourced, as defined by the UK government’s Central Point of Expertise on Timber (CPET).
There are currently two UK routes for responsible sourcing of construction products:
BES6001 Responsible Sourcing of Construction Products: This standard, originally launched in 2008, provides a framework for construction product manufacturers to ensure and then prove that their products have been made with constituent materials that have been responsibly sourced. To date more than 40 construction product manufacturers have been certified.
The BSI issued BS8902 in 2009 which describes a framework for the organisational governance, supply chain management and environmental and social aspects that must be addressed by a sector specific scheme.
What is clear is that the real progress will be where the industry, clients and these wider organisations work collaboratively – and we are already seeing this happen, for example on Crossrail, as mentioned above.
This is a fascinating time for the industry taking on the challenge of working ethical sourcing into their business processes and a great example of how industries that are notoriously set in their ways are moving with the rapidly changing tides.
At Contrasol, we are committed to ethical sourcing of our solar shading products and have a fully traceable supply chain. For example, we are members of the Sustainable Forestry Initiative, ensuring that we only supply timber from sustainable forests.
For other non-timber construction products the dominant scheme is BES6001. Many UK construction materials ranging from radiators to PVC products, including 92% of concrete and 83% of steel reinforcement in 2011 sold through UK fabricators, are responsibly sourced to BES6001.
Main contractors and subcontractors must make responsible sourcing an inherent part of the procurement process to drive the market demand in the right direction and provide the benefit to suppliers who have invested in obtaining these standards. To achieve responsible sourcing certification across the board is challenging largely due to the fact that 30-40% of materials come from overseas and there is currently no European or International standard for the responsible sourcing of construction products outside of the UK. Their provenance might not be easily traceable and laws are not always in place or enforced to protect against abuses such as child labour.
Many construction materials such as steel, copper, aluminium and glass are part of a global market and require the full support of many international stakeholders. Materials that are sourced from outside the EU should have an appropriate risk assessment to demonstrate due diligence in monitoring compliance with standards.
Education and technology are both key components in creating ethical sourcing processes within companies. Ensuring businesses stay proactively up to date with the latest regulations and requirements is essential. Technology can help organisations more efficiently implement these processes, by using blockchain to track all supply chain transactions, through to digitisation of key data linked to performance management.
There is a long way to go but these provisions have raised the standard in the construction industry and there are a number of benefits to businesses in adopting ethical sourcing practices. Aside from avoiding winding up in Court (or the papers), the World Economic Forum estimates that sustainable and ethical sourcing processes can reduce costs in the supply chain by up to 16%. These lower costs come because of the reduction of overheads, creating value through competitive advantage, reducing supply chain risk through compliance with regulations and maintaining your organisational brand value.
