You’ve probably come across the term ESG – Environmental, Social, and Corporate Governance – which has become the buzzword in today’s business landscape, permeating organisational agendas globally. Governments have also recognised its significance, integrating ESG into legislation and procurement policies. Take, for instance, the recent mandate by the UK Government requiring a minimum 10% weighting of ESG objectives in all government tenders, with severe penalties for companies found misrepresenting their ESG credentials.
Research by Nutral Ethical Workforce Services uncovered some surprising facts: while 75% of tier 2 subcontractors within a project’s supply chain have social sustainability strategies in place, a staggering 58% fail to measure or record the impact of these initiatives. Similarly, while all companies claim to have Equal Opportunities, Diversity, and Inclusion (EDI) policies, only a third are actively measuring diversity within their organisations.
This discrepancy underscores the need for refined supply chain practices to provide tangible evidence of driving social sustainability throughout all tiers of the supply chain. The market’s increasing emphasis on Social Sustainability as a criterion for winning contracts is evident, with housing association Peabody now weighting Social Value at 20% in their evaluations.
What’s particularly encouraging is the involvement of small and medium-sized enterprises (SMEs) within these supply chains, comprising 82% of tier 2 subcontractors. Despite their size, 75% of these SMEs are actively measuring their carbon footprint, showcasing their ability to adapt to the evolving demands of today’s world.
However, it’s evident that Environmental Sustainability has received more attention compared to its social counterpart, with established measurement tools and criteria readily available. But as the world’s focus on ESG intensifies, so does the spotlight on social sustainability. Beyond the desire to enhance communities and livelihoods, the prospect of winning contracts and gaining project approvals serves as a powerful incentive for businesses to prioritize it.
For developers and principal contractors, robust evidence of strong social sustainability practices is no longer just a checkbox; it’s a prerequisite to satisfy stakeholders, including investors, local authorities, and increasingly, consumers. The supply chain serves as the primary source of data and evidence crucial for securing funding and approvals for construction projects, making it imperative for all tiers to embrace and implement policies that promote social sustainability.
While industries are making proactive strides towards social sustainability, there remain skeptics who hesitate to embrace change. The term ‘Greenwashing’ or “Social Washing” has emerged to call out organizations whose sustainability claims are merely lip service. Hence, the imperative for sustainability applies to all businesses, including the UK construction industry.
Think of supply chains as the legs paddling beneath a swan; often overlooked but essential for propelling the entire operation forward. As scrutiny over social sustainability intensifies, it’s the practices within the supply chain that will ultimately demonstrate the value of sustainability commitments.
And that’s where Nutral steps in, ensuring transparency and ethical treatment across the entire supply chain, instilling confidence that all individuals involved are treated fairly and without discrimination.
At Nutral, our commitment lies in driving social sustainability across all tiers of the value chain, fostering a better construction industry for all stakeholders. Our partnership with Veriforce CHAS helps us to achieve this, working together we will be helping construction companies to start asking the right questions and assessing responses to lay the groundwork for improvement.
Veriforce CHAS and Nutral are your partners in seamlessly integrating sustainability into your operations by connecting you with a network of contractors who adhere to stringent sustainability regulations and best practices, paving the way towards achieving net zero. Find out about CHAS Social Sustainability here or reach out to our award-winning team at 0345 521 9111 to get started.
