In the ever-evolving landscape of construction, the integration of Environmental, Social, and Governance (ESG) principles has transitioned from being a mere trend to an essential framework that shapes the industry’s future. The incorporation of ESG criteria presents both challenges and opportunities, demanding a comprehensive understanding and strategic approach. Recently, I had the opportunity to engage with Cressida Curtis, the Group Sustainability Director at Wates, a prominent figure in the construction sector, to delve into how ESG is transforming industry practices.
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Wates, a company with a legacy exceeding 127 years, stands at the forefront of this transformation. The appointment of Cressida Curtis marks a significant shift towards a dedicated focus on sustainability, underscoring the company’s commitment to aligning purpose with profit. Curtis remarked on the increasing expectations from clients and stakeholders, “Our customers, ranging from public to private sectors, are increasingly prioritising environmental and social outcomes.” This shift reflects a broader trend where corporate responsibility transcends mere compliance, becoming a fundamental business strategy.
One of the primary challenges in implementing ESG principles within construction lies in striking a balance between reducing environmental impact and enhancing social value. Curtis highlighted the construction industry’s dual role as both a significant contributor to carbon emissions and a potential leader in sustainability. She emphasised the need for a holistic review of operations, noting, “We must minimise environmental harm while maximising the social value generated through our activities.” This requires meticulous organisation, with Wates identifying 265 legal obligations across their projects to ensure compliance and improve environmental performance. Curtis stressed the importance of equipping the workforce with the necessary skills and knowledge to tackle these challenges, advocating for a collaborative approach.
Innovation and collaboration emerge as vital components in the successful integration of ESG within the construction industry. Curtis believes that engaging with suppliers, clients, and even competitors is crucial to advancing the industry’s capabilities. “We can’t do this alone. It requires humility and a willingness to work together across the industry,” she stated. This collaborative spirit is evident in Wates’s approach to construction projects, where there is a growing emphasis on retaining and retrofitting existing structures. This strategy not only conserves the embodied carbon within buildings but also aligns with evolving regulatory landscapes and client expectations.
The momentum towards ESG integration is not just driven internally but is significantly influenced by client demands. Curtis noted that a substantial portion of Wates’s project pipeline mandates high BREEAM certification, a recognised standard for sustainable building practices. “It’s not just a nice-to-have; it’s a contractual requirement,” she explained, highlighting the changing market dynamics where ESG compliance is becoming the norm. Additionally, the inclusion of social value commitments in contracts is becoming increasingly prevalent. Curtis revealed that 22 out of 24 major residential projects at Wates incorporate contractual social obligations, illustrating a broader industry trend towards embedding social impact into construction contracts.
As the construction industry looks ahead, it faces a landscape rich with both challenges and opportunities in the sphere of ESG. Curtis conveyed a sense of optimism regarding the industry’s potential to lead in sustainability, while acknowledging the necessity for systemic change. “We need to shift from incremental improvements to transformative change,” she asserted. This sentiment was echoed by other experts in the field, including Ben Stansfield from Gowling WLG, who emphasised the need for a comprehensive approach to ESG, and Shah Begum, who highlighted the importance of social value in fostering positive community outcomes.
The journey towards integrating ESG into construction is intricate yet promising. Companies like Wates are pioneering this path by embracing collaboration, innovation, and a client-driven focus, setting the stage for a more sustainable and socially responsible industry. For those involved in construction, the imperative is clear: ESG is not merely a regulatory obligation, but a significant opportunity to redefine the future of building.
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