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Reporting, Optioneering and the Low Hanging Fruit of Sustainability
The explanation of sustainability which has been widely adopted is to “meet the needs of the present without compromising the ability of future generations to meet their own needs” [1]. Contributing to sustainability is increasingly accepted as good business practice not only as it is the ‘right thing to do’ but as an act of self-preservation and business longevity although usually in direct competition with short-term rewards.
Increasing attention is being made to the long-term financial performance of sustainability-focused companies. This is illustrated by the Dow Jones Sustainability Indexes which have been tracking the financial performance of Corporate Sustainability Assessed companies since 1999 [2]. The FSTE4Good Australia 30 Index is a sustainable investment metric in the FTSE4Good Index family.
Traditional company reporting measures against the bottom line – profit or loss. This practice is well established and measured under strict accounting guidelines. The current best practice of sustainability reporting introduces the triple bottom line which adds environmental and social performance to that of financial [3]. This enables an overarching benefit or success to be considered with respect to profit, people and the planet [4] which would be skewed or missed entirely if reported in money terms only. Furthermore, including environmental and social performance in an integrated annual report creates accountability going forward.
The question of what and how to measure and report is somewhat subjective. Consistency and normalisation is required for year to year comparison and profiling of companies against each other. The most widespread and internationally accepted framework of sustainability reporting is the Global Reporting Initiative (GRI). By adopting the GRI a company will be using a framework that like businesses worldwide also report using.
Sustainability reporting is not mandatory in Australia, but encouragingly as documented by KPMG in its Survey of Sustainability Reporting 2020, 98% of ASX 100 companies do so and 66% of these to GRI Standards [5]. External assurance over scope and sustainability information is used in 56% of ASX100 companies [5] and in all statistics, levels of reporting are trending upward from 2017 but it is also clear that Australia is not leading the world in this area.
A client’s corporate responsibility and external stakeholders’ values are likely to differ in priority to the performance that investors value. For this reason and as applicable to best practice reporting in general, the information provided must be accurate and complete with all relevant information to the company’s core business including disclosure of negative performance.
A designer or construction contractor is operating under a brief or scope of work provided to them by a client. Inherently, the requirement to measure and report on something focuses attention. This and the relationship between owner and designer/builder will drive whether sustainability effort is driven from the top-down and/or from the bottom up. Though priorities amongst stakeholders may not align, what everyone can agree on are the win-win scenarios where social and environmental outcomes result in financial improvement and at the very least acceptable performance on all fronts.
Understanding constraints and targets enable a challenge in the form of a defined problem for which solutions can be optimised and subsequently measured and ranked in terms of success. This is often referred to as ‘Optioneering’ and is a cornerstone of engineering and how engineers are trained to problem solve.
The article “’Optioneering’, new procurement method for projects” on ProjectManager.com.au [6] explains the concept in the context of whole-of-life project requirements and by extension sustainability for the VicRoads M80 Upgrade. The article defines Optioneering as “systematic examination of the performance of alternative products and designs to better meet major construction challenges. It takes into account the impact of each product or design method on a project’s cost, environmental footprint, and safety issues.”
Critical to sustainability optioneering is the ability to define the cradle to grave cost and risk profile associated with an option. Without such, a complete cost-benefit-analysis just isn’t possible. Civil Project Partner’s capability links directly with the process of optioneering and considered decision making. The depth of capability however creates opportunities to measure various effects on the triple bottom line in addition to the total estimated cost.
Being experts in first principal’s estimating techniques it is business as usual for CPP to determine as a basis of an estimate the permanent and temporary material quantities along with expected wastage. Transport of workers, haulage distance of materials and plant is documented for each scenario along with construction water source, usage and cartage. Total fuel usage and plant operating hours are determined based on working hours and fuel burn for specific plant as allocated by construction activity.
On a strategic level construction sequencing and staging is developed to optimise productivity in tandem with ensuring interaction with the environment, workers and the public is safely managed. Through the process of developing a construction program and risk adjusted cost estimate, there is a wealth of data produced for each scoped option to enable comparison and sustainable design and construction choices.
It is the nature of optimising these processes and that the low hanging fruit of sustainability is achieved as a reduction in material; waste; haulage; work hours and fuel plus the increase in productivity results in greater performance of profit; for people and the planet.
K.Sommerfeld
Reference List
[1] World Commission on Environment and Development, Our Common Future, Oxford University Press, Oxford, 1987, p.43.
[2] DJSI Index Family, 2021, accessed 10 March 2021, https://www.spglobal.com/esg/performance/indices/djsi-index-family
[3] ‘Triple bottom line’, Wikipedia, 5 March 2021, accessed 10 March 2021, <http://en.wikipedia.org/wiki/Triple_bottom_line>
[4] ‘Triple Bottom Line (TBL)’, Investopedia, 10 October 2020, accessed 10 March 2021, https://www.investopedia.com/terms/t/triple-bottom-line.asp
[5] ‘The Time Has Come: Australian supplement Global Sustainability Reporting Survey’ 01 December 2020, accessed 10 March 2021, https://assets.kpmg/content/dam/kpmg/au/pdf/2020/sustainability-reporting-survey-2020-au-supplement.pdf
[6] ‘Optioneering’, new procurement method for projects, 26 July 2011, accessed 10 March 2021, https://projectmanager.com.au/optioneering-new-procurement-method-projects