What is Sustainability in Supply Chains?
Sustainability in supply chains refers to the responsibility businesses have to act ethically and minimise their social and environmental impact. This is both a moral and legal obligation that involves taking steps to reduce harm and, where possible, create positive outcomes. By embracing sustainable practices, businesses can protect their reputation and profitability.
Today, stakeholders—including customers, clients, investors, employees, and communities—expect companies to prioritise sustainability and demonstrate efforts to uphold the “triple bottom line”: profit, people, and the planet.
Sustainability is no longer seen as an extra effort but an essential expectation. Failing to address these concerns can put businesses at risk, whether by limiting their ability to secure contracts or by violating laws on issues like pollution prevention and modern slavery.
The Rising Importance of Sustainability in the Construction Industry
The construction industry, in particular, faces increasing pressure to embed sustainability into supply chain management. Construction operations consume large amounts of energy and materials, produce significant waste, and contribute heavily to carbon dioxide and other greenhouse gas emissions, which are major drivers of climate change.
Supply chains in construction are often complex and span multiple countries, making transparency challenging. Many supply chain partners may be reluctant to share details of their relationships for fear of losing a competitive advantage. This lack of visibility, according to the Chartered Institute of Building (CIOB), creates an environment conducive to exploitation and human rights abuses.
Key Sustainability Concerns in Construction
Environmental Impact:
The construction process has a massive environmental footprint. From manufacturing building materials to actual construction and the energy used throughout the building’s life cycle, all stages contribute to climate change. In the UK, the construction sector accounts for 40-45% of the total carbon footprint, with a quarter stemming from the construction process itself. Additionally, construction generates 32% of landfill waste, and around 13% of materials delivered to construction sites go unused and are discarded, worsening the environmental toll.
Responsible sourcing is another significant factor. For example, certified timber from well-managed forests can minimise deforestation, protect biodiversity, and ensure sustainability. International standards like the Forest Stewardship Council (FSC) and Grown In Britain promote responsible timber use and safeguard environmental and social responsibilities.
Water Usage:
Water is a critical resource in all stages of construction, accounting for about 30% of the UK’s total water consumption. With water shortages and the risk of pollution looming, construction projects must prioritise efficient water use. Without intervention, the UK may face severe water shortages in the next 20-25 years, according to the Environment Agency.
Exploitation and Workers’ Rights:
Beyond environmental responsibility, construction companies must also prioritize social responsibility. Workers should be paid fairly, be provided safe working conditions, and not be subjected to exploitation or forced labor. Despite this, modern slavery is on the rise in the UK, particularly in construction, which ranks fifth in industries most at risk of worker exploitation. With vast and intricate supply chains, it can be difficult to detect these issues, further highlighting the need for better visibility and stronger policies against exploitation.
Legal and Industry Standards
Compliance with sustainability-related laws and standards is not just a moral imperative but a legal one. Regulations such as the Modern Slavery Act 2015 and industry standards like the Common Assessment Standard are designed to ensure businesses meet basic environmental and human rights criteria. The 2019 Environment Bill has further raised the bar, requiring businesses to implement robust waste management strategies, meet air quality targets, and design products with sustainability in mind.
Increasing Client Demand for Sustainability
Clients and stakeholders in the construction sector are increasingly focused on sustainability. They are more aware of the need to protect both the environment and the welfare of people, and they expect construction companies to align with these values. A commitment to sustainability is now integral to maintaining a company’s reputation and securing future contracts.
Business Benefits of Sustainable Supply Chains
There are several key advantages to embracing sustainability in construction supply chains:
Cost Savings: Sustainable practices can reduce costs by improving energy efficiency, cutting waste, and ensuring compliance with regulations, which can help avoid fines and other penalties.
Enhanced Reputation: A strong sustainability record can protect a business from reputational damage, improve customer loyalty, and set the company apart from competitors.
Risk Management: Prioritising sustainability helps businesses identify and mitigate risks in their supply chain, contributing to long-term business continuity.
Employee Satisfaction: Employees are increasingly attracted to companies that demonstrate social and environmental responsibility, leading to better job satisfaction and retention.
Investor Appeal: Investors are placing more value on sustainability, recognising that companies not taking these issues seriously may struggle in the future.
How to Build a Sustainable Construction Supply Chain
Building a sustainable supply chain involves reviewing every aspect of your business processes and evaluating their environmental, social, and economic impacts. This could involve ensuring ethical sourcing, minimising transportation-related environmental impacts, reducing waste, and improving visibility across the supply chain.
By adopting sustainable practices, the construction industry can unlock new business opportunities, support the long-term resilience of your projects, and contribute positively to local communities.
In the end, sustainability is not just about compliance—it’s about building a stronger, more resilient business that benefits the planet and people alike.
