Until recently, Environmental Social Governance (ESG) principles have been a tick-box exercise in most developing world economies. In the wake of zoomed globalisation efforts and zapped country-based development agendas due to revolutionary innovations and untenable environmental headwinds, ESG has become a buzzword in Africa.
In October 2005, the United Nations Environmental Program Initiative coined Environmental Social Governance (ESG) in their Freshfields Report. ESG consideration basically has to do with companies looking beyond financial metrics (or profit) in objective setting, strategy, and decision-making. Also, ESG
critically looks at Environmental, Social and Governance as shared goals for sustainable development. These goals are shared at a global level, as well as at national, organisational and community levels.
As we unpack the ESG praxis in the built environment, global research shows that buildings are responsible for up to 50 percent of global energy consumption. Also, almost 30 percent of global water usage, and a cumulative 40 percent of greenhouse gas emissions are attributed to the built environment. These imposing statistics add to the ‘embodied carbon’ emissions associated with the construction and supply chain of the built environment. Emissions from
To add specificity and simplicity to the above claims, the heating, cooling and lighting systems of our buildings generate carbon emissions that have a negative bearing on our environment. From a production perspective, the annual global production of one construction material, cement, estimated at four million tonnes is responsible for 8 percent of global carbon emissions.
These statistics add credence to the spotlight that global environmental watchdogs have put on the built environment. Increasingly, global project financiers and investors are putting more emphasis on sustainability issues before partnering any project. In Zimbabwe, a number of organisations in the
industry and commerce have crossed swords with the Environmental Management Agency (EMA) for failing the environmental sustainability test.
I will share with you some of the Environmental, Social, and Governance (ESG) issues that construction industry players can consider in the pre-construction, construction, and post-construction stages for sustainability.
Conducting an Environmental Impact Assessment (EIA)
It is important to highlight that in Zimbabwe, in terms of the EMA Act (Chapter 20:27) as read with Statutory Instrument 7 of 200, it is a legal requirement that every project must undertake an Environmental Impact Assessment (EIA) and apply for an EIA certificate. An EIA is a tool that is used to define, quantify and evaluate the potential and known impacts of construction activities on ecosystems at the earliest stage of project development. A project owner can engage the services of a consultant to assist in the preparation of a prospectus to be submitted to EMA as well as the conducting of the full EIA and application for the EIA certificate. An EIA will also consider the effects of a construction project on the local community and the consent of society should be sought before a project is allowed to proceed.
Adopting a Project Based Safety-Health-Environmental Management Plan
It is important that project owners or contractors include ESG issues in the project initiation and planning phases of a construction project. Most contractors now set Safety-Health-Environmental (SHE) objectives for each project, prepare a SHE policy and have an onsite She Management Plan and Officer. However, many organisations usually do not implement during the construction period that which they will have documented in their SHE policy or plan as most sites are still generally unsafe for workers and visitors. The role of the SHE Officer is gaining importance in the construction industry with most clients requiring contractors to have this resource to ensure enforcement of the SHE policy and consequently reduction in accidents and potential litigation or penalties.
Utilising Skilled Labour and Prioritising Human Resource Development
A key social issue that the construction industry is under pressure to address is the remuneration and welfare of workers on site. The construction industry requires varied skilled labour and it has to offer attractive remuneration to attract the skills especially in the face of competition for labour from foreign
markets. Construction companies have to consider issues such as safety, health, well-being, staff development and training if the industry is to be an attractive employment destination. Unfortunately, a number of construction projects fail to meet the quality expectations due to labour force shortcomings, and at times, for personal gains. As regulators such as the National Employment Council enforce minimum wages, overtime payments, annual leave and other worker welfare issues and violation of worker rights, which carry heavy penalties for construction companies, the use of skilled and qualified manpower becomes paramount. Increasingly, construction projects that are deemed to violate basic
human rights, underpay workers, and exclude women, youths, and minorities are facing scrutiny from regulators and investors and may fail to get relevant approvals or raise funding.
Embracing Green Building Standards
Architects and engineers have a role to play in fostering sustainability through designing buildings that have minimal negative effects on the environment. Also, they must promote the construction of buildings that are environmentally friendly. This can be achieved through embracing green building standards in
the built environment. Green building standards are aimed at reducing GHG emissions at the same time reducing the vulnerability and risks generated by climate change in the built environment. Building should be designed to promote energy saving, make use of renewable energy sources, properly
manage waste, incorporate vegetation and integration of non-fuel transport such as bicycles. As an active member of the World Green Building Council, the Green Buildings Council of Zimbabwe, in collaboration with the Ministry of Environment and Climate Change and other development partners are spearheading the adoption of green, sustainable or bioclimatic investments in Zimbabwe’s built environment. This is a great opportunity for players in Zimbabwe’s built environment to play an active role in reducing carbon
emissions from our daily construction efforts by embracing green building standards.
Simple green building interventions implemented at grand scale will make a huge impact. For example, if a new community is being developed in an area that endures water availability challenges, all the buildings in that community should be designed for efficient water use, water reduction or water treatment for reuse.
Investing in the Diversity of the Building
Sustainable construction designs must also consider the diversity of people that will make use of the building to ensure that they can all be happily accommodated, and find the building functional. Imagine constructing a four-storey building with no elevators only to establish that the majority of its users
are elderly people who require aided assistance to manoeuvre. This has been the case with a number of building entrances that are not wheelchair accessible – a challenge created at the design stages. Again, the positioning of ablution facilities for easy access by less capacitated persons is also key in building
designs. Also, the use of braille signage for the visually impaired is an important design consideration, to mention just a few. To avoid future costs and premature property abandonments, make it a pre-requisite to extensively identify all the key users to a building (actual and potential) during the planning stage, and to develop a stakeholder management plan that will guide the construction company to address the issues affecting key building users, and communicate appropriately.
Developing Green Procurement Policies
During the construction phase it is critical that construction companies develop green procurement policies to ensure that they procure materials that are not harmful to the environment and whose production process is environmentally friendly. Construction companies should manage their supply chain to ensure there are no environmental or social issues. It must be in your procurement policy to procure from a supplier whose products and efforts promote a green environment. Again, is it sustainable to procure material from a supplier that abuses its workers?
Consideration should be given to the procurement of material that is ethically produced, of high quality, durable, reusable and whose waste will not harm the environment.
Further, construction companies must adopt construction practices that reduce energy consumption, waste, emissions and water usage. As alluded to before, global environmental watchdogs and regulators are fixated on the construction industry for its documented carbon sins and weak labour practices. Lowering the cost of construction becomes a priority for the industry as it adopts ESG practices for growth and sustainability. To achieve these cost advantages, practices that ensure efficiency such as prefabrication and premixing, or designbuild construction management should be considered for adoption in the built environment.
Implementing Training and Awareness Campaigns
Post construction, there is a need for the industry and its regulators to invest in viable ways of training building users, whether owners or tenants, on issues such as energy efficiency, water and waste management and the measurement of energy and consumption. Construction companies must attend to all the issues raised during the defect liability period and ensure quality outcome of the project as per client specifications. Regulators must consider running regular campaigns to educate building users on the efficient use of energy and water in the built environment for sustainability.
For the nation and its body corporate, ESG can be a source of risk or opportunity for investors. Nowadays, many investors are seriously considering a project’s environmental and social impact when making investment decisions. Further, ESG factors provide deep insights into an organisation’s leadership quality and the quality of the organisation stakeholder management strategy. In adopting ESG, there are three critical questions that regulators, construction companies and property owners must collectively focus on, namely;
a) What is to be built?
b) How will it be built?
The above questions will bring out the characteristics of the buildings in as far as climate mitigation and climate adaptation are concerned. Also, they put the construction company to task on the adoption of sustainability principles in the entire construction value chain.
In conclusion, and as argued above, the adoption of ESG principles in the built environment has vast advantages for the industry and its stakeholders. I therefore challenge construction companies to identify ESG factors relevant to their projects and propose measures to minimize, mitigate, and where residual
impacts remain, to compensate/offset/remedy for risks and impacts to project workers, affected communities, and the environment. Developers must also establish effective grievance mechanisms for use by affected communities and workers to receive and facilitate the resolution of concerns and grievances about the Project’s environmental and social performance. The global adoption of ESG principles is a game changer to the character and flow of global investment. Considering the long-term investment nature of infrastructure projects, Zimbabwe’s construction industry must urgently adopt ESG to comply with regulations and also attract the much-needed funding.
Wallesa Nyawo is the Head of Sustainable Real Estate Projects at Integrated Projects. The views expressed in this article are his own and in no way reflect those of Integrated Properties. Wallesa can be contacted at email@example.com or 0778765564