ESG (Environmental, Socal, and Governance) is a corporate social responsibility, which can be defined as the company’s commitment to social and environmental sustainability. ESG should not only focus on the environment but also on society and how it influences both its stakeholders and investors.
ESG is now synonymous with many benefits for companies such as higher customer loyalty, increased employee engagement, improved operational efficiency and productivity, lower costs due to less waste generation etc.
ESG is about more than just minimizing negative environmental impacts; ESG means taking care of people too because they are important stakeholders in our world today. It’s crucial that we make all voices matter in order for us to work together towards a better future with sustainable living practices.
Today we identify each element of the ESG triangle s the Build to Rent industry can take to surpass the requirements of governing bodies and the expectations of the customers.
Environment
The industry as a whole has been aware for decades now that construction has a significant environmental impact. The production of building materials and the use of heavy machinery can result in air and water pollution, as well as the depletion of natural resources. In order to mitigate these impacts, construction companies must adopt more sustainable practices as we move towards a net 0 carbon economy. This is achieved in the three following steps;
- Identify – know where you’re starting from, know what your companies carbon output is.
- Analysis – Understand how this output occurs and what areas can be improved upon in the short term and what are those to be improved upon in the medium to long term.
- Mitigate – Start to chip away at your negative contribution to the climate crisis. Aiming to decrease your carbon output by even 1% every year is better than not decreasing it at all. Start where you can and go from there.
Social
The social impact of the construction industry is often overlooked. The industry has the potential to improve the lives of people in a number a plethora of ways, both during and after construction.
During construction, the industry can provide jobs for local people, which can help to improve their standard of living. Construction also requires a lot of materials, which can be sourced from local suppliers, helping to support the local economy.
After construction, the industry can help to improve the quality of life for local people by providing them with access to a continually expanding and evolving community ethos.
Developments such as a Build to Rent can be used as the bedrock of a community for a wider area as the area grows to attract multiple demographics from surrounding areas.
Governance
The governance needs to assist the construction industry in order to achieve more sustainable practices. Development has a significant environmental impact, and the governing bodies can help to mitigate these impacts by providing incentives for companies to adopt more sustainable practices. Through continued enhancement and improvement, the industry can repeatedly achieve carbon-negative developments that contribute to the wider community around them.
Final thoughts
ESG for construction and property development is no longer an option, ESG has become a necessity. Investors, Developers, Consultants, and Constructers also need to think about how their decisions will affect people in the community around them through job opportunities during and after construction.
Subscribe
Every Friday we send an email with that weeks published posts. Subscribe to our weekly newsletter to make sure you don’t miss a thing.