Environmental Sustainability In Construction Projects

Concept of triple bottom line (TBL) and sustainable development

Environmental sustainability is all about using renewable resources and eliminating all the things that induce pollution. Environmental sustainability helps to take measure in depletion of non-renewable resources. In addition, triple bottom line can be defined as the relationship of three pillars in sustainability; these are social, environmental and economic pillars of sustainability. These three ideas or pillars must be sustainable. Among all three pillars, environmental sustainability is most important as rest two is depended on environment. The aim of the report is to highlight the environmental sustainability in light of construction project. In the first part of the report, the concept of sustainable environment will be discussed to sustainable development including economic growth. The construction industry has the close relationship with environmental sustainability as with each step of construction, it erodes a part of environment. In this study, a sustainability report will be produced taking help of Global Reporting Initiative. In order to make a sustainability report, a hypothetical organisation has been chosen, named Royal Construction.

Triple bottom line (TBL) is an accounting framework that expands the traditional framework of n organisation in augmenting its area in social and environmentally friendly way. In this way, phrase was coined by John Elkington in the year 1997. Triple Bottom Line is about three factors that are people, planet and profit that may lead to an organisation to have sustainability. The first part ‘people’ is about social equity. People are the human capital of an organisation and community people (Malhotra, Melville & Watson, 2013). Organisations need to provide benefits to the employees and their need to think about their well-being. The second pillar of the concept is about planet and that means environment. It is the main and most important pillar of sustainability and most of the companies want to reduce the environmental pollution. Organisations do the life cycle assessment in order to measure the environmental sustainability. The last pillar is about ‘profit’ of the organisation and it is about economic value of the organisation. It is about real economic benefits of the organisation through traditional organisational accounting.

In addition, sustainable development is about meeting the organisational objectives with sustaining the ecological system and natural resources. Moreover, the organisations need to develop the idea about economy and society to have desirable outcomes. Using all the resources of the organisations, the firms need to be stable integrating natural and human needs. The target of sustainable development is to acquire economic, social and economic development through protection of all three for benefits of future generations (Wong & Zhou, 2015).

Triple Bottom line can be defined as one of the systems utilises by the firms in acquiring sustainable development. TBL changes the method of using traditional bottom line approaches and it makes the strategies of using profits with sustaining environment and society. The organisations can be socially sustainable if the organisations use human capital correct way. Labours and the community both are important for the organisations and organisations need to make long term sustainability. Employees’ interest and corporate interests are interdependent. It is needed that environmental sustainability should impact less on the organisation and that means the organisation consume less about natural resources. In Australia, per capita, energy consumption is 5.5 Mote/cap (Griggs et al. 2013). It is about sustainable business model and the organisation needs to reduce the waste in all levels of management. It may time-consuming and the process is difficult. Lastly, the economic sustainability is about making the profit and it must impact on economic development of the organisation. Moreover, green growth is equal to the fostering economic acceleration that can produce natural assets to provide environmental services (Savitz, 2013).

Relationship of TBL with sustainable development and its key concepts

Key principles of sustainable development of the organisation are:

• Economic sustainability can promote the innovation
• Environment and economy improvements will capture production process
• Sustainability makes the organisation business friendly with control policies
• There are many capitals of an organisation, including natural, social and human capital
• The organisation needs to measure the long-term sustainability in order to ensure the needs of future generations
• The organisations need to ensure precautionary measures in order to rectify the irreversible damage.

Triple bottom line is important for an organisation to follow as it is amalgamation of balanced scorecard of an organisation. The organisation needs to take the measure whether it is doing any social or environmental harm or not. People and planet both are significant for an organisation as most of the firms should take responsibility for society and environment (Govindan, Khodaverdi & Jafarian, 2013). In previous time, most of the organisations provide most significant on the production of items, however, the organisations have hidden cost like social and environment. In recent time, the cost of the production is getting higher with time in low-cost country like India and China in producing products. Society is now aware of the corporate malpractice and all the organisations are trying to have CSR to create brand image. CSR is a part of the marketing of an organisation that can ensure the sustainable development of the organisation. Organisations are trying to make products in social and environment-friendly way. However, it is difficult to account the benefits of society and environment’s perspective, the third pillar, profit that is economic perspective is clear for the organisation.

If an organisation follows the TBL approach for better future and better organisational perspective, it can spend more on sustainability that will give back benefits of sustainability. TBL is not economic way, hence, process is costly, and however, it will be beneficial for the local people and employees of the organisation. TBL may have the risks in the over-exploitation; however, it may give the organisation the diversity system with economic benefits (Devika, Jafarian & Nourbakhsh, 2014). In manufacturing industry, life cycle process is important with requirement of communication, education and infrastructure, as it can provide benefits of diversification. It may require some of conflict management processes as it can provide advantage of natural services of forest.

The construction industry can impact on environment, society and economy as it has significance on the building environment. The new concept of green building has come to news that can provide benefits to the organisation with implication. It is not only about the process of construction however, it is related to the development, producing, designing and planning of the construction. The whole requirement needs to be accurate with manufacturing materials of building. The construction project is a deliverable that should be sustainable from two sides, the client and the occupiers (Holden, Linnerud & Banister, 2017). In construction project, the sustainable development is about making social progress that would recognise the objectives of all. With this, maintenance of stable economic benefits is needed with protecting the environment. With this, the construction company should use natural resources in a wise way and they should not damage the nature.

In construction project, a construction company needs to follow some basic concepts;

The construction project needs regeneration of particular housing complex or revitalising town. In addition, construction project needs planning communities that decreases the car use.  Moreover, the project must use the energy in an efficient way with minimising mineral collection. In this way, in protecting environment, the countryside needs to be protected. In this light, green construction and green building project refer to make the structure and process of building in such a way that must be environmentally resourced sufficient and responsible (Barkemeyer et al. 2014). Moreover, construction operation should be sustainable and the market of green construction is now an emerging market.

Significance of TBL in sustainable development

Sustainability report can be described as the practice of measuring and calculating the internal and external stakeholders of the organisation and their performance in sustainability (Castelo, 2013). GRI reporting can disclose results and outcomes of an organisation’s commitment to sustainability.

Royal Construction is a famous name in the field of construction in Australia; however, this organisation is working in Asian countries and Africa too. The headquarter of the organisation is situated in Melbourne Australia and it was established in the year 1990. Since the establishment, the organisation’s focus has been on the sustainability. Business focus of the organisation is construction projects, materials transportation from one place to another and sending hired labourers to construction sites. The organisation claims that it has completed almost 1200 projects in Australia and Asian countries. It has made many landmark buildings and corporate offices in Australia. Royal construction’s most important work is Queensland’s Cairns airport premises as the place was not so developed.

In recent time, the organisations in construction project are facing issues in rapidly changing scenario of economic, social and environmental factors. The construction projects are facing the problems in global economic crisis and economic recession that make the crisis acute. These can pose long-term threat to the sustainability in achieving stability. Moreover, another crisis can be more dangerous for construction projects is impact of the sustainability. Royal Construction needs to be transparent and the organisation is trying to make an active participation from stakeholders. Some of stakeholders may step back from the initiative, however, new stakeholders like government and other investors start to take active participation in sustainability reporting. During crisis, the organisations want that sustainability report mist is to push forward with clearer perspectives, more policies and recommendations by giving examples. In Australia, the government has advisory group and government plays an important part in inviting the leaders of the construction projects. Moreover, the government wants transparency in advocating and reporting to comply with the sustainable policies to promote and disclose governance issues.

Royal construction always commits and evolves global sustainability that has reporting framework. The efforts will provide the continuous improvements that must provide significant development in sustainability. In Royal Construction, sustainability can impact in three different ways, Secretariat, Network and GRI products and outputs. GRI Secretariat in the organisation analysed the work plan that is made by the Network, Board of Directors and financial departments. GRI mainly target the network to increase the diversity among the network and this would work maintaining organisational policies.

Name of the organisation:

Royal Construction

Primary brands or products:

Royal Construction sets the mission is to achieve the sustainable development using the corporate social responsibility. The organisation is developing and expanding the framework of sustainable development. The organisation works in contract wise with the agents and provides delivery of materials, labourers and planning of any building and projects.

Operational structure:

For an organisation of construction project, the organisation is committed to having the positive outcome in fulfilling the sustainable development objective. Royal Construction does work in hierarchical structure and subordinates must listen to the upper. Royal Construction provides the support of Sustainability Reporting Framework with a few areas, the Guidelines, Sector Supplements and National Annexes. The framework has been developed within the organisation through systematic process by labour, civil society and taking global perspectives.

Concept of sustainable construction and significance of TBL in sustainable construction

Location of organisation’s headquartering:

It is in Melbourne.

A number of countries where it is operated:

The organisation is currently working in 12 countries. It is working in Australia, New Zealand, Asian countries like India, China, Bangladesh and African countries like Namibia and South Africa.

Nature of ownership:

The organisation is in partnership form. At first, it was working as a sole-proprietorship, however, with the advancement of time, the organisation started working in partnership.

Market served:

The organisation serves in Australia and its adjacent islands, Asian countries and African countries. The organisation is having the customers like large corporate tycoons and it has government projects also.

The scale of the reporting organisation:

Royal Construction has 43,000 employees worldwide with a large number of hired labourers.

The organisation has one headquarters and 7 large offices in other countries. Net revenue in 2016 was $45 million. Total assets of the organisation were $40 million.

Table 1: Sales Reporting

Significant changes during reporting:

The organisation has been going through the changes in terms of renovation of the organisation. The organisation is having headquarter in Melbourne and Royal Construction is trying to make another office in Sydney. The new facility of website help has been started recently where any agent can apply for help or order.

Reporting period:

GRI report period of Royal Construction is three months in each fiscal. Moreover, the organisation does sustainability reporting in every three years.

Date of most recent previous report:

Royal Construction did last reporting in the year 2014.

Reporting cycle:

Reporting cycle of the organisation is annual as the organisation asks the sustainability report in each year from the stakeholders. Then, the governing body merges the report and publish it in every three years.

Contact point:

In case any question arises from the stakeholders, they need to contact with HR of the organisation. Before that, they need to take permission from the secretariat of the organisation in sustainable report.

Process for defining report content:

The materials of the report in Royal Construction are valid and reliable as the source of the content is valid and the management takes valid sources only. The main topic of the sustainable report of the organisation is based on TBL as the organisation is currently working in Green Building production. The society, environment and profit of the organisation are most significant sectors of data and information. The main stakeholders of the organisation in this report are employees, management, government, community, labourers and board of directors. However, making a GRI report is not easy as the organisation is multinational organisation having projects in more than 12 countries. The information needs to gather from 12 different countries. Moreover, the organisation needs to calculate the full resources used in economic, social and environmental and their impact.

In earlier report in 2014, the organisation mostly provided their focus on economic sustainability as that time Royal Construction was going through loss of profit. However, Royal Construction took the acquisition of Ramco Construction that fiscal year and that gave the economic stability. Measurement of data is done through the qualitative and quantitative analysis with the help of the statistical method.

Specific limitation:

Limitation of the report is mainly on the collection of data about sustainability as it is difficult to take data from various stakeholders. Another limitation of the report is the analysis techniques as the organisation uses only technological ways.

The governance structure of the organisation is hierarchical as the subordinates have to listen to the upper bodies. Communication flows of the organisation are up-down approach. Highest governing body is board-of-director and they set the specific tasks for the organisation. In the organisation, 23% employees are females as it is in construction project. Highest governing body is governed mainly by CEO of the organisation. In Board of Directors, there are 7 members; however, there are 2 members are females.

In expressing the opinion, the shareholders of the organisation can provide their opinion. The organisation provides highest compensation to the CEO and remuneration is based on the hierarchy.  In avoiding the conflict within the organisation, the board of director takes the last decision. Royal Construction follows the equal opportunity for organisation’s employees. The organisation has set of codes and conducts that need to follow. The mission statement of the organisation is to follow the sustainable development and in order to achieve this organisation follows principles and regulations. The key assessment policies of sustainable development of the organisation are assessed by e-tool certification system. Moreover, the organisation does assessment using LCA software.

Performance indicators of the organisation are set by the organisation, sustainability performance indicators are related to the environment, economic and social categories. In relation to this, social indicators can be defined as human rights, society, labours and product responsibility. Each of the categories is ruled by management approach of the organisation. Disclosure of management approach is related to the performance information and overall structure.

The reporting information should be based on the period that is one year with following protocol. The Economic condition of the sustainability is based on the economic system in local or national levels. Economic sustainability is related to the organisational performance in measuring the larger financial system. Royal Construction has market presence in Australia with more than 11% that can impact both on indirect economical aspect. Goals and performance of an organisation are set by the economic aspects.

In recent time, providing sustainability report is an integral part of an organisation that keeps record of corporate accountability (Madurwar, Ralegaonkar & Mandavgane, 2013). Moreover, governance, reporting and integration of information of sustainability are easy task; however, value of correct information cannot be denied.

The first challenge is to describe the firm’s approach in performing the sustainability issues like governance, environment and societal perspectives. For instance, a multinational firm, the organisation will not be able to collect the data from different sources with a large number of employees. An Australian firm named, Telstra takes accounts of the performance as well as issues in sustainability, and however, it gets difficult when the organisation needs to amalgamate the reports from 1 million stakeholders all over the world.

Sustainability report of an organisation can impact the performance of an organisation as it is needed that while making the report, it should acquire reliable data, not fragmented data. The end result may not get compliance with the company’s objectives and best practice frameworks. In compiling the report of sustainability, it is needed to have organisational commitment at all levels.

Moreover, in making the merit framework, one of them is Global Reporting Initiative, the report is very long and for most of the stakeholders; it gets inaccessible. It is needed to make sure that no stakeholder gets left during the process. Organisations should make responsible strategies and they should make stakeholder relationships (Kilbert, 2016). Stakeholders of an organisation should be aware of sustainable development and report. Stakeholders may have diverse interests; however, the report needs to comprehensive and balanced.

Conclusion: 

This study has encompassed all aspects of the sustainability with sustainable development with triple bottom line approach. However, the sustainable construction process is the main focus making the report of sustainable process of construction. Local regulation and international process of construction through sustainability have been the focus. The process of sustainability appreciates the change in climate change, however, it can affect the energy uses of construction project and greenhouse gas. Triple bottom line approach provides the significance of the three pillars social, environmental and economical. The organisations can apply the sustainable tools in order to have the sustainability.

Reference:

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Malhotra, A., Melville, N. P., & Watson, R. T. (2013). Spurring impactful research on information systems for environmental sustainability. MIS Quarterly, 37(4), 1265-1274.

Savitz, A. (2013). The triple bottom line: how today’s best-run companies are achieving economic, social and environmental success-and how you can too. New Jersey: John Wiley & Sons.

Wong, J. K. W., & Zhou, J. (2015). Enhancing environmental sustainability over building life cycles through green BIM: A review. Automation in Construction, 57, 156-165.

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