This article is part of a blog series on supply chain issues. The impact of COVID-19 on the supply chain in the construction industry, as well as the wars in Ukraine and the Middle East, is still felt in 2025. Inflation is down, but at risk of getting up again if the US cannot negotiate its tariffs, and peace is not agreed upon, the industry will experience fewer resources, both in labor and materials. The construction supply chain (CSC) involves stakeholders such as the owner or client, the architect, and several types of engineers who deliver goods, materials, and trade services to the construction site to ensure the success of building and construction projects. All stakeholders play a key role in sustainability. Every project requires money. A comparative analysis of the Value for Money (VfM) framework should be conducted to achieve sustainability in the delivery of your projects. It is a concept assessing if costs are effective and return on investment is efficient for the best possible outcome of resources used The sustainable development goals (SDGs) were adopted by the United Nations member states in 2015. The aims are to end poverty, protect the planet, and ensure that all people enjoy peace and prosperity by 2030. The 17 SDGs goals are interdependent, ensuring that when you take an action, you do not negatively affect another area. Any construction project should balance social, economic, and environmental factors.
Sustainability means you have a duty, both moral and legal, to act ethically and responsibly, to reduce the negative social and environmental impacts of your operations on the climate. You also agree to protect your reputation and your profitability.
All stakeholders, clients, investors, employees, and communities expect construction companies to implement sustainable best practices, demonstrating they are willing to protect their profits, their people, and the planet.
Failing to address sustainability issues may put your business at risk. You could lose your competitive edge as your ability to win new projects reduces. You may break laws like pollution prevention or modern slavery.
Putting sustainability at the forefront of your supply chain management is not negotiable. The construction industry is creating high quantities of waste, generating carbon dioxide emissions and other greenhouse gases, negatively impacting climate change. The sector consumes energy, not just on-site, but also manufactures the products used in building.
Managing sustainability with your partners is difficult, as they may be reluctant to disclose their relationships to protect their commercial advantage. This is injecting uncertainty into the supply chain due to a lack of clarity and augmenting risks for the exploitation of human rights and corruption.
To be a responsible sustainable company, you must follow laws and regulations regarding human rights exploitation, environment, and industry standards such as the Common Assessment Standard in the UK, to boost sustainability in the construction industry.
Reducing the negative environmental and social impacts that your business and supply chain relationships inflict on the planet is possible if you construct resilient and efficient assets and support communities by choosing to use locally based supply chain partners. Introducing environmental protection into your supply chain policies will reduce the negative impact your organization may have on employees, local communities, and wider society.
In 2020, the municipality of Amsterdam had to adopt a new strategy to recover from the pandemic crisis. They used the concept of the “Doughnut Economy.” They adapted it to the size of a city, with British economist Kate Raworth, who developed the model. The purpose of the model was to produce strategies to deliver a good life to the Amsterdam citizens, without damaging the planet. It has been such a success that the model is now used in many other cities.
All construction types have, in their life cycle, a negative impact on the environment. So, it is the responsibility of the construction industry to lead the way, globally, to fight issues related to climate change and protect the planet.
Some statistics from the United Kingdom show that buildings and other assets use a lot of energy over their lifetime:
Sourcing materials irresponsibly could damage the environment and biodiversity. For instance, you should only buy certified timber from responsible arboriculture organizations. Applying environmental and social responsibility policies to their processes to protect the planet. FSC, a global forest certification system established for forests and forest products, can help you support the use of responsibly produced timber.
Construction projects consume water. For example, in the United States, the construction industry represents 15% of the total public water supply. According to the World Green Building Council, water recycling systems in buildings may save up to 50% of water usage. Many regions experience water shortages aggravated by climate change. Actions are required in these regions to meet water consumption in 20 to 25 years. You should be aware that materials manufactured offshore may use water and could generate pollution.
Sustainability includes social responsibilities. This means that, throughout your supply chain, you should ensure that workers are adequately remunerated, human rights are respected, health and safety policies are in place and applied to all laborers, and that unreasonably long hours are the exception, not the rule.
Unfortunately, modern slavery is growing worldwide. It is difficult to identify where and if exploitation occurs in the construction supply chain, as it lacks clarity and visibility. It involves organizations, large and complex processes, subcontractors, and labor agencies.
“Trafficking in persons,” “human trafficking,” and “modern slavery” are used as umbrella terms to refer to both sex trafficking and compelled labor. In the USA, the Trafficking Victims Protection Act of 2000 punishes trafficking in persons, especially women and children. The United Nations Convention against Transnational Organized Crime (the Palermo Protocol) uses other terms to describe modern slavery, like involuntary servitude, slavery, or practices like slavery, debt bondage, and forced labor.
Traffickers use various bullying and ambiguous practices to deprive their victims. Workers may be considered trafficking victims regardless of whether they were born into a state of servitude, were exploited in their hometown, were transported to an exploitative situation, had previously consented to work for a trafficker, or had participated in a crime as a direct result of being trafficked.
Clients and their stakeholders use sustainability to enhance their reputations. They now introduce clauses in their contracts to protect the environment, enhance the welfare of people, and implement sustainable business practices.
Green sustainability is growing in the construction supply chain. If you want to succeed, you should prioritize it to fuel your growth and expansion by complying with international laws on sex trafficking and putting clear policies, processes, and guidance in place to eradicate exploitation.
Improving your business’s sustainability is an opportunity for your organization to make a real difference. Let us see how it can improve your work.
In the United Kingdom, in 2022, 520 construction contracts, with a total value of $4.2 billion, ranging from $15,000 to $150 million, were analyzed to determine the social value the country produces. The findings show that the construction industry invested in community changes that impacted people’s lives. The return on investment was more than 10% higher than the previous year.
By addressing the negative environmental impacts of business operations and focusing on positive social practices, organizations can reduce costs, decrease their carbon footprint, and potentially lower the number of workplace accidents, which may result in reduced insurance fees. You will eliminate waste, which will lower your cost of non-compliance, helping you to avoid fines and compensation payouts by adopting sustainability legislation.
Your reputation and revenue will increase, boosting your professional stature and winning you more projects, gaining customers’ trust and loyalty, and helping you to market your business to new customers. Introducing risk management systems in your organization minimizes potential threats to people and the environment, increasing your chances of success and opportunities. Your employees will be proud, happy, and satisfied to work for a sustainable organization. It will improve your employee attraction, satisfaction, and retention and boost your productivity.
To secure funding, adopting sustainable practices and minimizing your environmental and social impact will appeal to investors.
It is challenging to introduce environmentally and socially responsible policies in your supply chain processes. You must identify, in all stages of your operations, the impacts they have on the environment, either social or economic. You then plan your implementation, including all your supply chain stakeholders. Do not forget to ensure you can respond to the clients’ requirements.
In your workflow, you must introduce ethical sourcing practices throughout your entire supply chain, streamline your processes, reduce the environmental impact of transportation, eliminate waste, introduce a good planning system like Plannerly, and increase your visibility and clarity by automating your processes
Implementing supply chain management in the construction industry is lacking momentum. The necessary sustainability components are environmental, social, and financial.
Many challenges must be surmounted, like inefficiencies in the logistics system, shortage of funding, environmental issues in demolition procedures, and difficulties in applying sustainability measures due to high skill, data, and time requirements. The potential to improve the current situation in the construction industry is enormous, such as increasing investment in energy conservation, adopting emission reduction technologies to drive sustainable development, establishing strong green supply chain relationships, and forming a financial support group for small construction companies.
The long-term relationships between construction companies, suppliers, and customers require best practices and new smart technologies to simplify and streamline the supply chain process. The following steps can help you build a sustainable supply chain by:
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