Environmental, Social and Governance-related Challenges in the Construction Industry (CIC 2023)

Abstract

The construction industry is faced with several Environmental, Social and Governance (ESG) challenges and opportunities that include, but are not limited to, a massive carbon footprint, the physical impacts of climate change, green building certifications, supply chain, innovative product design, pollution control, health and safety, diversity and inclusion, community development, business ethics, and biodiversity. With these ESG issues front and centre in daily headlines, investors, shareholders and all other stakeholders are demanding greater transparency in relation to the construction industry's interaction with the environment and the society in which they operate and upon which they depend for long-term business continuity. ESG factors are becoming fundamental nonfinancial information for the long-term valuation of a company, for the investment decision-making process and in determining capital allocations. All the key players in the construction industry, including engineering and construction services firms, manufacturers and distributors of construction materials, buildings products and furnishing companies, real estate developers, and real estate services companies, need to convince stakeholders that they are delivering optimal outcomes when it comes to the triple bottom line of people, planet and profit. In this paper, we will address and discuss the following questions: What are the key ESG challenges and opportunities that construction industry is facing? How are these key ESG challenges identified and acted upon? What are the enablers used by the construction industry to address and manage ESG factors? Among these enablers, we will look in details at the Global Sustainability Assessment System (GSAS) and its capability to satisfy the investors ESG disclosures needs.