3 ways to improve your company’s ESG performance

Keith Ali, Managing Director at Creative ITC. (PHOTO: Creative ITC)

The construction sector has a vital role to play as we work to make a net zero future a reality.

Buildings account for 40% of global energy consumption and a third of greenhouse gas (GHG) emissions. The last two decades have seen emissions from concrete and cement production double, currently constituting 8% of total CO₂ generation worldwide.

The startling statistics have given the industry a renewed focus and impetus to tackle these issues.

In 2022, construction leaders from across Europe launched an EU Policy Roadmap towards climate neutral buildings and construction by 2050.

This bold plan from the World Green Building Council (WorldGBC) was developed with the support of over 35 industry bodies, the first of its kind at European-wide scale to address the whole-life carbon impact of the built environment.

Architects Declare is among the industry groups pushing to accelerate real change and a host of initiatives have sprung up aimed at encouraging best practices to make a tangible difference.

Pressure is growing on construction firms to provide incontestable evidence of the benefits of their environmental, social and governance (ESG) policies.

Carbon offsetting is increasingly criticized as mere greenwashing, an empty promise that will not contribute to achieving net zero targets.

ESG legislation in Europe

Across Europe this year, the Non-Financial Reporting Directive (NFRD) is being expanded with the Corporate Social Responsibility Directive (CSRD) to include stricter reporting to meet new EU sustainability standards.

Likewise, two ESG disclosure laws became mandatory in the UK in 2022, and reporting will become further formalised through new Sustainability Disclosure Requirements. The USA and many other countries are following suit.

These legislative changes fire a warning shot across the bows for construction firms, heralding more stringent requirements to come.

ESG requirements in public tenders are getting stricter and further stipulations are expected to follow, which could impact the bottom lines of non-compliant organisations.

Exclusion from tenders looms unless they can validate their sustainability claims. The implications are clear - fundamental behavioural change is clearly needed.

1. Update legacy IT systems and infrastructure

Despite mindsets changing when it comes to commissioning, designing and constructing projects, working practices within many building firms themselves still lag far behind.

Legacy IT systems have long been acknowledged as an obstacle to transformation, hampering operational efficiency across the industry. What’s less well recognised is that outdated IT infrastructure is a huge generator of CO₂.

Enterprise technology makes up around 1% of global GHG emissions – the same amount generated by the entire UK and equivalent to half of all emissions from aviation and shipping worldwide.

Sustainable IT is not merely about reviewing infrastructure to drive carbon reduction. It’s also about driving new behaviours to transform working practices, operations and solution efficiency.

Unfortunately, many construction companies aren’t practicing what they preach. There’s plenty of industry professionals talking the talk – far fewer walking the walk. It’s still common for architects, designers and engineers to work on bids for eco-friendly projects on power-hungry CAD workstations that don’t maximise the use of renewable energy sources.

Project teams then replicate that behaviour once the project starts. To put that into perspective, 60 traditional CAD workstations running for 12 hours produce around 48,000kg of CO₂eq^[1] - the same amount created by driving a car seven times around the world.

2. Adopt Desktop-as-a-Service 

There are a number of practical steps IT teams can take to make a real difference to their company’s environmental impact.

Adoption of Desktop-as-a-Service (DaaS) is one way to contribute to ESG targets.

VDIPOD, for example, is a purpose-built VDI platform tailored for AEC applications that is hosted from data centres operating on 100% renewable energy. It provides firms with metrics and an audit trail to simplify ESG reporting.

Construction firms using VDIPOD use 81.7% less energy with an 89% renewable power model (one VDI server supporting 60 laptops/thin clients) at source and CO₂eq reduction of up to 43%^[2] compared to traditional CAD workstations.

Since deploying VDIPOD, a multi-award-winning international architecture studio has already achieved a three-fold increase in renewable power use and a 90% reduction in kilowatt hours per person. These benefits will be extended as the platform is rolled out across Asia, Canada and the USA.

3. Transition to Infrastructure-as-a-Service

Transitioning to an Infrastructure-as-a-Service (IaaS) model is another route IT teams can take to reduce their organisation’s environmental impact.

With fully-managed IaaS, infrastructure responsibility moves to the service provider, along with power consumption and carbon footprint.

Without the need to maintain on-premise technology, IT teams can reduce energy consumption, cooling costs and waste from decommissioned equipment. Cloud providers can also improve companies’ sustainability and ESG scores further by using virtual machines and containers to reduce numbers of data centre servers.

When choosing an MSP providing new sustainable technology solutions, firms should scrutinise their ESG credentials and take industry experience into consideration to ensure optimal value and achieve the greatest impact on sustainability goals.

With public cloud hyperscalers increasingly condemned for poor environmental controls and under-utilised resources, smaller cloud providers may be an option.

The benefits of sustainable IT systems

Technology improvements are an often-over-looked strategy that construction firms can deploy to accelerate their journey towards net zero.

By implementing more sustainable working practices, such as adopting fully managed IT solutions like DaaS and IaaS, companies can dramatically reduce their carbon footprint and positively impact ESG scorecards.

Moreover, there is a clear connection between sustainability aims and business value. In addition to contributing to global environmental goals, firms adopting best practices enjoy operational and financial rewards.

With stricter ESG requirements, they’ll have more opportunity to bid for tenders and face fewer regulatory interventions. Sustainable companies outperform competitors on profitability and EBITDA, and enjoy increased productivity, top-line growth and reduced costs.

Publicly owned high achievers are also more likely to see greater equity returns, reduced downside risk and higher credit ratings.

With a key role to play on a global stage, time is running out for the construction industry to drive fundamental behavioural change and make smarter choices now.

As environmental, social, and governmental concerns become increasingly urgent, business and IT leaders should keep these benefits firmly in mind and leave no stone unturned to transform their operations for the better. Future success – for their business and the planet - depends on it.