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In several communities across California, a growing number of residents and leaders are pushing back against sprawling industrial/commercial infrastructure, protesting warehouse construction and passing ordinances to thwart development.

With commercial construction booming in the state, people are expressing their concerns about projects’ impact on pollution, congestion and other environmental issues. The debate is fierce, and it’s emblematic of the growing importance of environmental, social and governance (ESG) efforts in the commercial construction industry.

The emphasis is warranted. The construction industry has a heavy footprint, especially when it comes to the environment. The sector is responsible for more than one-third of global energy-related CO2 emissions, a startling statistic for an industry expected to grow by 42% in the next decade. Collectively, the construction industry accounts for 25% of global water consumption and consumes one-third of the world’s natural resources.

While the commercial construction industry has traditionally evaluated ESG based on building properties like product quality, longevity, health impact and other post-construction properties, there is a growing emphasis among company leaders, investors and government regulators to improve and enhance sustainability at every part of the design chain, from project conception to finished product.

In other words, for contractors, developers and designers, reporting ESG metrics is quickly becoming an industry standard and expectation. Here are three ways commercial construction project leaders can begin that process today.

1. Identify the Right Metrics

 Commercial builders have a wide range of ESG metrics that they can collect and report. However, without a widespread industry standard, this process can quickly become excessively expensive, overburdening those tasks with collecting and aggregating data without producing the desired outcomes.

Commercial builders can start by measuring project impact, like resource consumption, personnel impact and workplace safety. To support this process, turn to proven ESG standards guiding other industries, including:

In addition, the Carbon Leadership Forum’s EC3 calculator can help builders more accurately calculate their climate impacts, quantifying an otherwise difficult-to-measure ESG category.

Equipped with the right metrics, all stakeholders can benchmark progress over time, demonstrating their commitment to ESG and making progressive improvement more possible.

2. Appoint a Leader to Enact Change

There are many reasons why commercial builders should prioritize ESG initiatives. Not only do ESG-oriented companies have an opportunity to construct facilities that are purposeful today, but they are also reorienting commercial infrastructure around sustainability.

In addition, these facilities are sought more by potential buyers and future tenants looking to support sustainable practices and more efficient, cost-effective facilities.

Despite these benefits, there is a glaring chasm between ambition and action. Ultimately, converting ESG commitments and aspirations into real outcomes is an exercise in change management. This requires a proven leader to identify needed changes and implement impactful solutions.

Perhaps most importantly, this leader can help companies navigate conflicting priorities as ESG aspirations conflict with short-term financial impact.

For example, 84% of business leaders say their shareholders and stakeholders are concerned about ESG metrics. At the same time, a nearly identical number say that short-term economic uncertainty is hindering their ability to fulfill their ESG commitments.

A designated ESG leader is best positioned to select the best metrics, choose the optimal measurement mechanisms and cut through multifaceted opposition to enact meaningful change.

3. Recognize and Reward ESG Outcomes

Implementing change in commercial construction requires everyone to contribute and participate. Builders, developers and designers can encourage these outcomes by developing systems that recognize and reward ESG outcomes.

Make sustainability metrics a part of employee, contractor and executive evaluations and performance reports. This most directly connects all stakeholders to the process, ensuring everyone is moving together toward a worthy goal.

An Opportunity to Define the Industry of the Future

The commercial construction industry is projected to grow substantially in the next decade. More effectively measuring, aggregating and responding to ESG metrics is a win-win-win for builders, buyers and communities.

Stakeholders are uniquely invested in ESG priorities. Commercial construction and real estate partners should work to address these challenges now, creating commercial infrastructure that helps companies and communities thrive today, tomorrow and in the future.


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