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UK Construction Week (UKCW) is the largest event in UK Construction and Barbour ABI are proud to be their official data provider and partner. Throughout the event, which took place on the 3rd-5th May, Barbour ABI had the privilege of exhibiting and attending some of the insightful talks.
The theme for this event was culture change. Sticking with this theme, our May content calendar will report back to you some of the key messaging taken from UKCW around this topic.
On Tuesday 4th May, our very own Chief Economist, Tom Hall chaired the ‘ESG & the real meaning of value’ talk. ESG stands for Environmental, Social and Governance and is a term which is being increasingly used within the industry to group together a wide spectrum of opportunities to positively change construction.
Alongside Tom was a panel of experts, which comprised of; Ann Bentley, Global Board Director at Rider Levett Bucknall, Simon Rawlinson, Partner and Head of Strategic Research and Insight Team at Arcadis and Brian Green, Independent Commentator, Analyst and Author at Brickonomics.
During the talk, each speaker took to the stage one by one to deliver their keynotes on the topic at hand, starting with Brian Green.
Brian kicked off his keynote by stressing the importance of ESG in construction and how it can help reduce risk. Risk is one of the biggest factors in construction and Brian believes ESG can restructure the industry, through the reduction of risk.
He highlights that currently those who are getting involved in ESG are at the deeper contractor or investor level. He adds that the supply chain is unaware of what is going on in terms on ESG, but stresses a business is only as ESG positive as their supply chain.
Brian dug deeper into this topic by discussing some of the key finds within the report he wrote for AMA Research ‘How ESG will change the culture of construction’. Part of the report was a look into annual reports over the last 10 years and the frequency of words associated with ESG. Brian told the audience that the term ESG is growing quickly, supported by a statistic within the report which shows that in the latest annual reports ESG was used 55% of the time, but the report before that was just 17%.
After Brian delivered his keynote, the stage was then passed to Ann Bentley. Ann states that the biggest construction client in the UK is the UK Government and their expenditure on construction is not just about buying assets, it is now about how to build communities, improve the quality of life and hit the net zero targets.
According to Ann, organisations need to be looking at their assets and what they contribute to the ESG agenda, rather than what the construction process does. Businesses are a tiny contributor to ESG and Ann stresses that it ESG is all about the building/asset itself. Ann then ended her speech by stating that in the future, businesses need to look at how they can positively affect the outcome of their work, through innovation and collaboration.
The final keynote was delivered by Simon Rawlinson, his speech centres around the investment side of ESG. Simon starts by stating that ESG is a universe of investment and it is a license to trade, which is crucial to many businesses.
Analysing the last quarter, Simon reveals it was poor for ESG investment as it has somewhat stalled. This is because ESG is under challenge, Simon states, as it has resulted in a misallocation of capital. A huge amount of money has been put into companies that are labelled as ‘good’ but this money is just sat in organisations and isn’t contributing to the cause.
Simon ends with a piece of advice; money needs to be invested into things that are going to generate better outcomes for cities, people and channel money in a productive way, as productive delivery is the key to getting those investments.
To end the talk, Tom opens the floor to any questions to give the audience the opportunity to seek advice from the professionals. One of the questions asked was, where do you start with ESG?
The answer to this question was that organisations should tackle ESG by first reading up about it and understand what the scope of it is and how that relates to their business. Collaboration is also a good place to start, look at other companies who have done it and learn from them. ESG is such a wide topic, at first it can seem overwhelming so it is important to research and collaborate as much as you can.
Ann Bentley suggested to conduct a basic audit, as many companies will be better at ESG than they think. So businesses should write out what they are doing, conduct a bit of research, then complete an audit where they can set targets and identify the gaps and their plan to fill them.
Finally, organisations must identify where the risk is, whether that be in the workforce, GDPR or the supply chain. This is good practice which will get organisations into the habit of knowing how to properly manage their business and collect high level metrics.